House Concurrent Resolution 78
Sponsored by Madinah Wilson-Anton (D- Newark), the resolution directs the Public Education Funding Commission to study and make recommendations on equitable collection and distribution of property tax revenue for schools.
The General Assembly created the PEFC to look into how to make the First State's education funding formula more equitable after a lawsuit was filed in 2018 by the Delawareans for Education Opportunity and the NAACP Delaware State Conference of Branches.
Anton told the committee she's adding an amendment that directs county consultation on issues of property assessment. And a deadline for questions on property reassessment can be added.
The PEFC set recommendations on reshaping the state's school funding formula. Anton said as part of that work, her resolution asks the commission to, "also look into having a county-wide school tax collection process with locally governed schools."
She added, "There's a lot of confusion, a lot of disparities within districts. So that's personally the most interesting question that I'd like the commission to weigh in on."
House bills 245 and 246
The committee met two Republican-led bills with skepticism, which both aim to end a 10% tax increase districts can initiate post-property reassessment.
Since Delaware’s first reassessment in forty years multiple districts, including Appoquinimink, Christina, Capital, and Indian River, opted for a full 10 percent increase. Colonial implemented a seven-percent hike.
State Rep. Bryan Shupe (R-Milford) said his version is meant to prevent tax payers from being hit with a tax increase after reassessments conducted every five years, and a hike in school taxes immediately after.
"There has got to be some sort of measure every five years when we come back, to show that the schools cannot put a 10% increase on top of reassessment, because people can't afford it," he said.
Shupe's HB 246 eliminates the 10% increase, but would allow districts to increase revenue by two percent per year between property assessment periods, if they can prove they’d see revenue loss without it.
Committee chair Kim Williams said Shupe needs input from New Castle County, given complications with reassessment in the northern part of the state.
Colonial School district CFO Emily Falcon, president of the Delaware Association of School Administrators, warned the bill would remove state requirements that districts reset tax rates after a reassessment. And taking a revenue-neutral approach prevents schools from adjusting for inflation.
Falcon said removing the 10% increase for schools doesn't protect tax payers.
"There is still not a stopgap in our laws that would prevent wild swings for an individual taxpayer after a reassessment," she said.
Falcon said she understands the intent of Shupe’s bill, and sees the potential in the idea . Shupe said he’s willing to rework the legislation with school CFOs.
The committee also tabled Rep. Mike Smith’s (R-Pike Creek) similar measure, which proposed eliminating the 10 % tax increase completely.
