Dover City Council endorse a new fee on tax exempt properties to help boost revenues, but questions loom on its legality.
Dover’s last budget made sweeping cuts to cover a seven-million-dollar shortfall, and sparked questions about how the city could avoid future budget challenges.
A new measure, introduced by Councilmen Roy Sudler and Brian Lewis, would impose fees of $1 per square-foot of building space on tax-exempt properties larger than 50,000 square feet.
Sudler says the move is in line with Dover’s overarching strategies.
“The Capital Area Municipality Sustainability Act directly coincides with Policy Mandate 1, which specifies that the city will strive to maintain a broad and diversified revenue base that will equitably distribute the burden of city services and protect the city from short term fluctuations.” he said.
Sudler adds those properties use city resources like stormwater and roadways, arguing they should have to pay a “fair share” for them.
“No matter how massive the tax-exempt footprint grows, or how much market value their building commands, their property tax bill remains exactly zero.” he said.
Properties affected would include places like Delaware State University, Bayhealth Medical Center, and Legislative Hall. Each would be required to pay the city millions of dollars every year if the measure passes.
Enacting the fees would require a City charter change approved by the General Assembly, something Dover State Senator Trey Paradee told Spotlight Delaware is "politically impossible” and raises constitutional questions
The City’s Legislative and Finance Committee voted unanimously to back the plan.
