Delaware’s Court of Chancery upholds property tax rates created in New Council County to address post-reassessment concerns.
Vice Chancellor Lori Will rejected all arguments made by a coalition of landlords and property associations.That coalition argued the authority state lawmakers gave New Castle school districts to set split rates for residential and non-residential properties resulted in a misplaced tax burden.
In her decision, Will said state lawmakers have the power to classify property for rate-setting purposes once a uniform assessment methodology is in place - and their action was neither unreasonable nor arbitrary.
Will also notes any errors in the process were not “systemic or pervasive, but correctable,” adding the error rate of 0.66% suggests administrative difficulties.
She also ruled the state and county are providing remedies that are constitutionally sufficient for any correction of property tax classifications.
Democratic leadership in the State Senate and House issued a joint statement thanking Chancert Court for
"As legislative leaders, it is our obligation to work swiftly on behalf of the people of Delaware — but even in doing so, we believed that the legislative solutions we put forward during the August 12 special session were sound, responsive, and ultimately going to provide the greatest immediate relief to the households that were disproportionately burdened by a shift in valuations from non-residential to residential properties," said Democratic leadership in its statement.
They added they plan to quickly announce the next set of hearings of the bipartisan Special Property Reassessment Committees looking into the reassessment process. Lawmakers paused that committee's work after two hearings to wait for the court ruling in this case before moving ahead.
A pair of Republican State Reps. Kevin Hensley (R-Townsend, Odessa, Port Penn) and Mike Smith (R-Pike Creek Valley) who sit on the that special committee responded to the Chancery Court ruling by calling New Castle County to redo their reassessment
“Regardless of whether we have a one-tier or two-tier system of tax rates is kind of beside the point,” Hensley said in statement. “The property valuations on which those taxes are based are badly flawed. For instance, at the first committee meeting, we learned that there was no differentiation between preserved farmland and farmland not in the preservation program, even though there is a huge difference between the two.”
The only relief Will ordered is that New Castle County must include in its tax bills a notice of any reclassification and a description of its new policy for disputing reclassifications.
County officials say they are happy with the quick victory and they are preparing to send out bill with the new split rates approved by school districts.
"We are pleased that the Court agreed with the County’s position and found in its favor. Our team is working diligently to determine how quickly new bills can be sent to property owners," said County Director of Strategic Communications Natalie Criscenzo in a statement. "A notice will be included providing taxpayers notice of any reclassification and a description of the new policy for disputing reclassifications. Our focus remains on ensuring a fair, transparent, and equitable property tax system that serves all County residents."
The county previously said the expect to have payments on the tax bills due by Nov. 30th.
