After multiple attempts over the years, Delaware’s approach to school referenda could get an overhaul.
Senator Pro Tem Dave Sokola (D-Newark) introduced a bill that revises when school districts would have to ask its tax base for a bump in funding.
“It's deja vu all over again,” Sokola said. Lawmakers had pitched referendrum reform before. Sokola co-sponsored legislation in previous sessions with now retired legislators Daryl Scott and Earl Jaques, but these didn’t make it through the General Assembly.
Right now, to increase property taxes for operational funds, a district’s tax base must sign off on the increase via referendum. Operational funds cover expenses like staff salaries, classroom supplies, utilities, building maintenance, and transportation.
“It took a lawsuit, unfortunately, to get a lot of people interested in doing what I thought for a long time, should be done,” Sokola said.
Sokola’s referring to a 2018 lawsuit brought by Delawareans for Educational Opportunity and the NAACP Delaware State conference that ultimately led to the state's funding systen being ruled unconstitutional by the Court of Channcery. That decision led to Delaware's first property reassessments in decades.
Under the bill, districts would be allowed to increase tax rates by 2% annually as long as a district’s revenue is not more than 10 times what it has in operational reserves.
It would also repeal the up to 10% increase in school property tax for operations a district can currently take following property reassessment. If a district does not meet reserves criteria or seeks more than a 2% increase, it would need a referendum. Capital projects would still require a referendum.
Sokola said SB 322 allows schools flexibility to absorb a portion of inflationary increases, while including “guardrails” to protect for taxpayers from sticker shock from significant tax increases or unfair hikes.
If approved, the new process would not take effect until 2031, after the next round of reassessments.
At Wednesday’s Senate Education Committee meeting, Delaware Association of School Administrator's Susan Brown said the measure will not fix “every financial strain that districts face. ”But it is a tool for fiscal stability.
The measure has sponsorship from General Assembly Democratic leadership now. It follows in the steps of education funding reforms born from the Public Education Finance Committee and sponsored for State Senator Laura Sturgeon (D-Woodbrook).
Sturgeon expressed interest in legislation on referendum reform and said she plans to support SB 322 when the time comes to sign on.
Senator Eric Buckson (R-Dover South) said he’d “like to support the bill.”
He’s the Senate sponsor for a House bill that also suggests eliminating the up to 10% post-reassessment increase . But that bill on to has more hurdles before a district could enact a 2% tax rate increase, asking that it prove financial loss without the boost.
