Two bills adding checks to property tax assessment head to the House after passing Delaware's Senate this week.
Senator Cruce’s SB 228
During discussion on the bills Thursday, State Senator Dan Cruce (D-Bellefonte) said he sponsored Senate Bill 228 to address issues from 2024's property value reassessment, which shifted a disproportionate tax burden from businesses to homeowners.
Senate Bill 228 gives New Castle County’s Office of Finance power to review the reassessed value of nonresidential property. Under the bill the office can review nonresidential properties under these circumstances:
- A property evaluated at $300,000 and up, but that had decreased in value compared to its last assessment
- If a nonresidential property’s value assessed at $300,000 (or more) increasedby more than fifty percent of the county’s median increase
- A property sold in the last five years for 25 percent more than the reassessment’s value
It gives the County Office of Finance power to correct a property’s assessment when it finds an issue. If the General Assembly passes the bill, it will expire in 2027. Cruce added that the review process is limited to only property reassessment purposes only.
The bill cleared committee Tuesday, then passed Thursday in the Senate with 17 yes votes and four absent. It prompted push back from Republican lawmakers on the legislation’s speed. Senate Minority Whip Brian Pettyjohn asked if the bill accounted for tax burden businesses face, such as wage and income taxes.
Cruce said yes, and many of the concerns he received came from small business owners, who wanted fast action to correct issues from the assessment.
Pettyjohn wanted to know more about New Castle County’s capacity to handle the reviews and estimated cost.
Cruce said Pettyjohn’s concerns are part of why the bill needs to pass quickly. He pointed out the General Assembly won’t hear bills in February, while it recesses for budget hearings.
If legislation doesn’t pass until early or mid-March, Cruce said, it gives the county less runway to prepare and implement a plan.
If SB 228 makes it out of the House next week, Cruce said he’s confident Governor Matt Meyer will sign it into law.
Senator Spiros Mantzavinos’s SB 230
The next bill considered on the senate floor, Senate Bill 230, aims to address reassessment issues in all three of Delaware’s counties.
Sponsored by Senator Spiros Mantzavinos, it mandates that businesses share financial information if a county uses income a property generates to assess its fair market value.
Mantzavinos said counties don't have to use the bill or the power it would grant.
“It's just one more tool that the counties would have in their toolbox as we move forward with property tax assessment and ensuring that properties are fairly assessed,” he said.
If passed, the bill says counties could subpoena a business–meaning compel it to provide information to Delaware’s Superior Court.
David Del Grande, the chief financial officer for New Castle County spoke on the Senate floor Thursday in favor of the bill. As it stands, Del Grande said it’s hard to get credible information to assess market value of commercial properties.
New Castle County has approximately ten thousand nonresidential parcels, he said. About one percent of those responded to a questionnaire when assessment information, “was first asked to be provided.”
He said Senate Bill 230 offers the county “more leverage with these businesses.”
Without the legal teeth SB 230 offers, Del Grande said the county uses algorithms and market value from comparable properties.
Senator Pettyjohn had concerns about this assessment bill’s implications too:
“Are we going to go ahead and go in and subpoena the books of a company for real estate purposes?” he said. “I just I have a problem with a governmental entity coming in and inspecting books.”
Pettyjohn sees potential issues with basing a property’s value on the business itself.
The State Senate passed the bill 15 to 1, with five absent or not voting.
Background
Between 2023 to 2024, all three of Delaware’s counties conducted property reassessments for the first time in 30 to 40 years. The delayeventually led to a Delaware judge ruling in 2020 that reassessments must be completed.
The long wait for reassessment created issues for counties working from outdated data and shifting a disproportionate tax burden to homeowners.
