As litigation over Delaware’s school funding system proceeds in the state’s Court of Chancery, an interesting side battle has emerged – between the City of Wilmington and New Castle County.
City officials, who have been outspoken in recent years in claiming that the fragmented school management structure in Wilmington has impaired learning opportunities for low-income children, have requested permission to jump into this case, but the issue they’ve raised has more to do with tax assessments than with school funding.
In its motion to intervene, the city argues that the county’s failure to reassess properties since 1984 directly harms the city’s ability to “effectively and fairly administer its own property tax system.” The county’s actions on assessment appeals filed by owners of large commercial properties has reduced assessed values by more than $64 million, costing the city $1.28 million a year in property tax revenues, the motion states.
Wilmington Mayor Mike Purzycki first offered that criticism of the county’s handling of assessment appeals in his March 2018 budget address,
The city’s request to enter the case triggered a war of words between Purzycki and New Castle County Executive Matt Meyer.
"It is simply unacceptable that the county government has failed for nearly four decades to carry out a reassessment of property values," Purzycki said.
"There is no need to waste taxpayer money by litigating this issue in court," Meyer responded. "If the city wants to reassess property, it has the power to do so under state law, just as Dover and Rehoboth do on a regular basis."
Properties in Dover, in Kent County, and Rehoboth Beach, in Sussex, are subject to differing assessments. Property owners pay county taxes based on their county assessments and local taxes based on the separate Dover and Rehoboth assessments.
However, in its motion to intervene, Wilmington asserts that it is required by law to use the county’s assessment figures.
In an interview this week, Meyer said that, if a reassessment is conducted, it is not clear whether the outcome would be beneficial to the city.
He also said the county would oppose the city’s motion to intervene. “I don’t think the court is the right place to resolve this issue,” he said.
However, Ryan Tack-Hooper, legal director for ACLU Delaware, lead attorney for the plaintiffs in the case, Delawareans for Educational Opportunity and the NAACP Delaware State Conference of Branches, says the city does have a legitimate interest in the matter because it, like the school districts, would be affected by any court ruling involving property assessments. Tack-Hooper said the plaintiffs do not intend to take a position on the city’s motion.
Although not a factor in the school funding lawsuit, another piece of legislation pending in the General Assembly could be impacted by the reassessment portion of the case.
Senate Bill 50 calls for establishing a statewide property tax of up to 6.5 cents per $100 of assessed value that would be used to finance construction and repairs to buildings on the four campuses of Delaware Technical Community College.
The proposed legislation, as currently written, calls for the same tax rate to be levied in each county, but the last assessments were undertaken at different times – Sussex County in 1974, New Castle County in 1983 and Kent County in 1987. Since property values almost always increase from year to year, and that was generally true from 1974 to 1987, that would mean that, if Senate Bill 50 becomes law, the base on which Sussex County property owners would be paying this new tax would be a decade older, and therefore significantly lower, than that base on which Kent and New Castle county property owners would be paying.
But the bill's chances of being considered seem uncertain. This week, Delaware Tech President Mark Brainard sent a memo to bill sponsor, State Sen. Harris McDowell, and other lawmakers asking that the legislation temporarily be put on hold.
