The Colonial School District Board of Education eases the burden on residential tax rates at Tuesday’s meeting – but only partially.
Colonial residential property owners saw their share of the tax burden increase by more than 10 percent post-reassessment – an $8.7 million increase for homeowners.
Board members approved a shift with a 4-1 vote and one abstention to put a split tax rate in place. That will cut into the increase and keep the tax burden at its pre-reassessment share of 52.6 percent.
The new separate rates for residential and commercial properties are now allowed by state law. House Bill 242 passed at a special session in Dover earlier this month and gives school districts that power but caps the difference between commercial and residential rates at a 2 to 1 ratio.
Colonial chief operating officer Emily Falcon said using split tax rates to offer residents relief doesn’t come without consequences.
“I am comfortable restoring the tax burden even though that does increase the revenue that's at risk with the commercial appeals…” Falcon said. “I do believe that it's a subjective process, and I think facing a higher tax burden or a higher tax rate, commercial properties are more likely to get more of what they're asking for.”
Colonial has the highest reassessment appeal rate among New Castle County districts at 10 percent - and many appeals are from commercial properties.
Falcon added successful commercial property appeals could cost the district more revenue than the 7 percent tax rate increase will bring in. That’s one reason the district is keeping the 7 percent hike in place.
Uncertainty with federal funding and state legislative changes have also left the district with potential gaps to fill.
Falcon said the split the district is putting in place reflects the methodologies used by New Castle County officials.
“They included properties classified as farmland on the residential side of the split,” Falcon said. “So farmland and residential properties are considered residential, and all of the other categories, which includes apartments, industrial, utilities and commercial are all on the commercial or non residential side.”
School districts are allowed to impose tax rate increases of up to ten percent during reassessment years.
