New Castle County has agreed to reassess all properties for tax purposes by July 2023 — after decades of not doing so. It’s the latest development in the educational equity lawsuit filed by civil rights advocates.
A Chancery Court Judge approved a settlement between New Castle County and the plaintiffs in the suit—the NAACP State Conference of Branches and Delawareans for Educational Opportunity—last week.
In it, the County agrees to reassess all real property for use in tax bills by July 2023. It’ll be forty years since the last time the County did this—in 1983.
"It has taken decades to get into this problem, and we are committed to fix it," said New Castle County Executive Matt Meyer in a statement Monday.
The plaintiffs praised the agreement in a news release sent out by the ACLU of Delaware Monday.
“Tax reassessment is critical as we work to give Delaware’s children a more equitable education,” said Jea Street Sr., on behalf of Delawareans for Educational Opportunity, in the statement. “The quality of a student’s education should never be determined by their zip code.”
Officials with the ACLU of Delaware, which helped represent the plaintiffs, say the resolution will modernize the County’s property tax system and set the stage for regular reassessments moving forward. But the agreement does not require the County to do regular reassessments in the future.
“It’s sort of like exercising. … You don’t want to just run a marathon and not have done any training ahead of time,” said Mike Brickner, executive director of the ACLU of Delaware. “ So doing these property tax assessments over the next few years, it’s going to make it easier then in 5 or 10 years when the county wants to do reassessment, for them to do it, so it’s not such a laborious process.”
Brickner says the plaintiffs had hoped the County would agree to regular reassessments in the future.
“It’s certainly something we wanted and think is an important thing in the school funding realm,” he said.
The settlement does not specify how the county will do the reassessment.
"The goal is to make sure working people, hard-working homeowners are treated fairly,” Meyer said. “Let me be clear, we will not use this court ruling to raise county tax revenue. We will continue to work tirelessly to ensure fairness and equality for all taxpayers in New Castle County. New Castle County have followed Kent and Sussex County in submitting a request for proposals for reassessment vendors."
School districts get the opportunity to increase their property tax revenues by up to 10 percent the year the reassessment occurs. The 10 percent applies only to the average of 33 percent of district revenues that come from the property tax, so it’s actually only a 3 percent hike in a district’s overall revenues. Counties, on the other hand, must roll back their tax rates to come out of the reassessment revenue-neutral.
The original suit filed in 2018 claimed inequities in the property tax system and the way the state funds education further harms already disadvantaged students.
The Chancery Court judge ruled last spring that the counties’ tax assessment systems were indeed unconstitutional.
Vice Chancellor J. Travis Laster decided that the property assessment values resulting from the counties’ current systems “have no correlation with present fair market value.”
"By continuing to use the decades-old valuations when preparing their assessment rolls, the counties treat owners of similar properties differently," Laster wrote.
Last November, Laster set a trial date of March 29-30 of this year for the case after lawyers representing disadvantaged students and Delaware’s three counties failed to negotiate a settlement then.
During a hearing at that time, Laster said he thought the counties were “manufacturing excuses” to delay a resolution to the suit.
The state settled the education portion of the lawsuit last fall, with promises by Gov. John Carney to seek legislative approval for permanent temporary weighted funding for English Language Learners and low-income students, more funding for teacher recruitment and retention in high-needs schools, more funding for preschool programs for low-income families, and more funding for early elementary special education students.
The Governor did not include funding to help counties do the reassessments in his proposed FY2022 budget last week, due to the unresolved legal issues. But he said he considered including such funding.
“We do a lot of things to incentivize activity that’s good for our state, and that would be in that category,” Carney told reporters Wednesday when discussing his budget plan.
He noted around two-thirds of property tax revenue statewide goes to fund school districts, but said property assessment is “clearly a county function.”
Kent and Sussex Counties have yet to resolve the legal disputes over their tax assessment systems. They will go to trial in March if they don’t settle with plaintiffs before then.
Last week’s settlement allows New Castle County the option of appealing the May 2020 property tax ruling, according to Karen Lantz, a lawyer with the ACLU of Delaware working on the lawsuit.
This story has been updated.