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General Assembly reverses course on plan to take bigger cut of realty transfer tax

Delaware Public Media

State lawmakers are backing down from a plan to take a greater share of realty transfer tax revenue to deal with budget issues.

The budget writing Joint Finance Committee will reconvene Tuesday - the final legislative day of the year - to strike its plan to raise just over 20 million dollars by increasing the state’s take of the three percent tax assessed when homes are sold.  The revenue is currently split 50-50.  The plan called for the state to get two percent and send one percent to local governments.

Initially, the committee eyed making the change July 1st to close a gap in the 2016 budget, but eventually voted hold off until next July.  The state faces a potential shortfall of about $160 million dollars in 2017.

Resistance to the plan from counties and cities around the state was swift and vocal.  Among those chiming in was Wilmington Mayor Dennis Williams.

“I used to chair Joint Finance and I think one of the things they did was they let the budget go too long," said Williams.  "And a lot of times when you know you are running out of time, the panic sets in andm I think some things are proposed and placed on the table that weren’t well thought out.”

But Williams adds says he’s pleased lawmakers in Dover changed their minds

“I do believe that the General Assembly with the leadership of (JFC co-chairs) Harris McDowell and Melanie George Smith, stepped back and took a look at this.  And the leadership, (House Speaker) Pete Schwartzkopf, (House Majority Leader) Valerie Longhurst and (Senate President Pro Tem) Patti Blevins and (House Minority Whip) Margaret Rose Henry – the leadership all came to some conclusion that this wasn’t the right thing to do and they realized they could write a budget without doing this and I really appreciate it,” said Williams.

In a statement, JFC co-chair Rep. Melanie George Smith said even though the plan would not affect this year’s budgets – it had become a “distraction,” She added lawmakers look forward to working with local governments over the next year to find “fair solutions that help us address the budgetary challenges we are facing.” 

Tom Byrne has been a fixture covering news in Delaware for three decades. He joined Delaware Public Media in 2010 as our first news director and has guided the news team ever since. When he's not covering the news, he can be found reading history or pursuing his love of all things athletic.
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