Delaware Public Media

Newark may cash in on tax-exempt property next year

Jan 3, 2016

Rep. Paul Baumbach (D-Newark) is reviving a bill to bring an extra $400,000 in annual cash to the city he represents.

 

He argues it’s a matter of fairness, as Wilmington, Dover and Georgetown split $3 million each year from the state in return for the large amount of tax-exempt property within their borders.

46 percent of property in Newark is tax-exempt – mostly from University of Delaware, compared to 36 percent of Wilmington, 29 percent of Dover and 25 percent of Georgetown.

UD and Delaware State University have been left out of this payment calculation so far, but the bill would change that.

Baumbach says it's a parity issue.

“It comes down to what extent the residents of a city need to subsidize the tax-exempt entities in their city and in Newark, they have to do it at a much greater extent than in Wilmington and Georgetown and Dover,” he said.

The bill would raise the payment cap to $3.5 million annually, which means Wilmington, Dover and Georgetown get extra cash if it’s passed.

If passed, the extra money would make up just one percent of Newark’s 2015 operating budget.

Even with the most recent state revenue forecast projecting little to no deficit next year, he says it still might be a tough sell.

“There’s a large, pent up list of requests for things that have gotten held because there haven’t been new dollars, so I think it’s tough to get anything tough to get through even when there’s breathing room.”

Baumbach introduced a similar bill in 2013 that never made it out of a committee.