The Brandywine School Board changed its tax rates at its Monday meeting to address significant increases on residents' tax bills following reassessment.
State lawmakers gave New Castle County districts the ability to reset tax rates and use different rates for residential and non-residential property during a special session Aug. 12.
Brandywine School Board members voted to shift the tax burden from residential to commercial properties – resetting the split to what it was before reassessment – about 67 percent coming from residential and 33 percent from commercial.
The district’s chief financial officer Daniel McCoy said post-reassessment, the residential burden jumped to 79 percent.
“Commercial before reassessment was 21 [percent],” McCoy said. “After reassessment was 13 percent. So those are pretty large percentages… Then we have to figure out what tax rates will put us back at those tax burdens that existed prior to the reassessment.”
The changes made mean the district's 32 thousand residential parcels will see their bills drop 15.8 percent, easing reassessment spikes. About 1,300 commercial parcels will face increases. The overall process will remain revenue neutral.
Board president Jason Heller was a small business owner in the past and said his concern lies with local businesses.
“But the same time, I think our overall obligation is to do the most good for the most amount of people,” Heller said. “And I believe the 1.8 split makes sense.”
Board member Ralph Ackerman said he’s pleased to see the tax burden shift.
“I applaud the Senate for passing a resolution to look into this process because it's fundamentally flawed,” Ackerman said. “I'm hoping that there's some way to fix it moving forward. I'm glad that we're doing the things that we're doing. I support the recommendation, but Tyler Technologies did a really bad job with this assessment, in my opinion.”
Non-residential rates – which cover apartments (or anything with for or more units), commercial, industrial and utilities – now sit at 1.85 times higher than residential. Legislators in Dover set the cap at two times higher.
Apartments valued at $20 million or more will have an average tax increase of $137 thousand. Three of the most valuable properties’ owners have appealed their assessed values.
“I think the point of this was to show that [...] it's not ideal to put taxes back on anyone, but it is likely the larger properties that are seeing the tax increase,” McCoy said. “So we would hope that those are the properties that can more easily take on the tax increase.”
The deadline to appeal for this year’s tax bill has passed. Folks can still appeal for next year’s taxes.
The original tax rate was going to be 0.6661 per $100 of assessed value. It is now 0.5609 per $100 of assessed value for residential properties and 1.0382 per $100 of assessed value for non-residential properties.
Districts statewide could also raise tax rates by up to 10 percent after reassessment. Board members originally approved the hike to offset a loss of $1.2 million in federal funding.
“Of course, almost immediately after the board approved that, the federal government said ‘you can have your federal funds that we were withholding,’” McCoy said. “So with this process, we have the ability to remove that 1.7% increase from our tax rate.”
Other New Castle County school boards meet later this week to address their taxes.
