Newark City Council passes a resolution that could lead to the city charging the University of Delaware $50 per student per semester.
Council voted unanimously Monday night in favor of the resolution to amend its charter to levy the tax. It now heads to the General Assembly for approval.
Several dozen UD students showed up at the council meeting to oppose the move, arguing the university would likely pass the fee directly to students. Some council members conceded that is likely.
A few residents also spoke in person and several dozen more wrote to council, some in favor of the university paying their “fair share,” others arguing it’s not the way to solve the city’s budget issues.
Councilwoman Dwendolyn Creecy emphasized council’s intention is not to reach directly into students’ pockets – noting misconceptions that the tax would do just that.
“It is a fee that would be going to the University of Delaware, and then they would decide how it is paid,” she says. “It is not us putting a tax on you.”
UD’s Chief Operating Officer John Long argued the university’s economic impact already helps the city by raising revenue and attracting jobs and businesses.
“I know you recognize the impact of our students on Newark because you previously acknowledged to my colleagues how difficult it was on the city when the students went home for lengthy stretches during the worst pandemic,” Long says.
Long touts STAR campus as an economic driver, noting more people are working there than when the Crysler Plant was in operation. He also suggests large events that the university hosts such as alumni weekend, homecoming, and Ag Day “fill [the city’s] hotels and pay [the city’s] hotel tax.”
UD Director of Government Relations Caitlin Olsen adds the university offers direct access to community health clinics through their nurse management primary care or physical therapy center and the New Directions Early Head Start program that offers services for pregnant people or those in the first few years of parenthood.
“Using our students as a vehicle for tax increases is an affront to all that our relationship stands for,” she says. “We ask that you reconsider this hasty and unnecessary measure and instead consider our important relationship and shared value in the brighter future for Newark, it’s resources, and it’s people.”
Newark Mayor Jerry Clifton says, however, that the money doesn’t equal out.
“We don’t have a sales tax, we don’t have a gross receipts tax,” Clifton says. “So it’s great that they’re supporting the businesses, the students and the university employees, but the bottom line is we’re hemorrhaging money.”
Clifton echoed previous sentiments that an additional $100 a year for students wouldn't be a dealbreaker in terms of financials, but says Newark can no longer kick the can down the road – the alternative is raising property taxes again, and all council members agreed they cannot burden the residents more after a 7.5 percent hike last year, 5 percent for FY2023, and 2.5 percent for FY2022.
Councilman Travis McDermott questions the dynamic between the university and the city, calling for more “shared responsibility” in taking care of the city and providing services to constituents and UD students.
“When you look at the university, they’re a public organization when they want to be public and they’re private when they want to be private,” he says. “You look at the $6 million to raise the [football] division to another level, you look at the president’s salary, $1.5 million, a $1.7 billion endowment… The entire city’s budget is $100 million. So when you look at what is reasonable, this is not an attack on students.”
Creecy adds until there is more affordable housing for students, built by UD, the new tax “seems to be a fair assessment.”
Councilwoman Corinth Ford also says UD has "washed their hands of the responsibility" to provide students with affordable housing. Once having housed around 65 percent of their students, fall 2023 enrollment data shows about 6700 students are living on campus — now just 37 percent of the undergraduate student population — which Ford argues puts more burden on the city to provide utilities.
Councilman Jason Lawhorn notes the city does not receive any official PILOT (Payment In Lieu Of Taxes) funds from UD. He adds if university property were taxable, it would generate around $8 million annually for the city – whereas the student fee would only bring in around $2 million.
Undergraduate Student Body President Julia Hatoum says while she is disappointed with the results of the council vote, the students will continue to push back.
“I also think that maybe an alternative can be found with the state legislators, especially since they do have the power to provide PILOT funding if the conversation shifts there, so we will be there asking for that alternative as well,” Hatoum says.
Questions were also posed about those who have a permanent resident status but are also a student. A large number of graduate students who spoke in opposition also noted it is too expensive to live within city limits, instead settling in Bear, Glasgow, or Elkton, Maryland, and therefore claim they should not have to pay fees to pay for Newark services.
