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New Castle Co. Council introduces budget proposal with one-time tax credit

New Castle County Council introduced last night an alternative budget proposal for next fiscal year, replacing the County Executive’s proposal that was shot down last week.


The County Executive’s original proposal was based around a 15 percent property tax increase, which most councilmembers called too high. The council also voted down a floor amendment that lowered the tax increase to 12.5 percent.

But the version introduced Tuesday effectively phases in a 15 percent increase over two years - by giving tax payers a one-time credit to offset half of the hike in FY 2019.

Council Finance Committee co-chair George Smiley says the new budget plan introduced Tuesday is balanced, despite the tax credit it proposes. He says that’s possible thanks to an amendment passed last week allowing the county to budget more of the Real Estate Transfer Tax it collects.

“When you lower the amount coming in you lower the amount you have to put in the reserves and other entities. Also, we passed a bill that increased the amount of RTT that had to be set aside from ten percent to five percent. That added another $1.5 to 1.7 million into this year’s budget,” he said.

County Executive Meyer has released a statement in support of this proposal.

“It’s a deal that, while non-optimal, it will ultimately get us where we need to be,” he said.

But Meyer says it’s unclear whether this plan would cause the County to dip into tax stabilization reserves next year.   

“It’s called a tax stabilization reserve. It’s not a tax withdrawal reserve that you just draw down every year like we’ve done the last five years,” he said. “When years are good, you add to it. And when years are rough, you take from it.”

Meyer feels that the budget plan introduced last night would restore this balance to the reserves.

Councilmember Tim Sheldon expressed hesitance about the new proposal, questioning why the long-term tax increase it proposes is 15 percent, rather than the 12.5 percent proposed by a floor amendment introduced last week.

According to county officials, the 12.5 percent tax increase proposal already reflected the revenue freed up by the Real Estate Transfer Tax changes.

Council will likely vote on the revised plan June 12. The county needs to approve a budget by June 30th.


Sophia Schmidt is a Delaware native. She comes to Delaware Public Media from NPR’s Weekend Edition in Washington, DC, where she produced arts, politics, science and culture interviews. She previously wrote about education and environment for The Berkshire Eagle in Pittsfield, MA. She graduated from Williams College, where she studied environmental policy and biology, and covered environmental events and local renewable energy for the college paper.
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