UPDATED: DE General Assembly to Meet Tuesday in Special Session to Deal with Aftermath of Reassessment

UPDATED – 08/11/25 – The Delaware General Assembly will meet in special session Tuesday to address concerns after the recent statewide property reassessment. Both chambers are scheduled to go into session around 2pm – the House after newly-elected District 20 Representative Alonna Berry is sworn into office. Multiple bills have been introduced in advance of the special session. Another measure has recently been introduced – Senate Bill 204 – a bipartisan measure sponsored by Senate Republican Whip Brian Pettyjohn and House Republican Leader Tim Dukes which would enable local governments the ability to establish reasonable property classifications – like residential and non-residential – and apply uniform tax rates within each classification.

Additional information from the Senate Republican Caucus:

The measure would eliminate the need for separate legislative action to amend individual municipal charters to allow this flexibility, streamlining the process for local governments and avoiding legal uncertainty. The City of Wilmington already uses this system, and last year, the City of New Castle’s charter was updated to do the same.

“Local governments know their communities best,” said Senator Brian Pettyjohn. “By putting this into state law, we are giving them the clarity and flexibility they need to make property tax decisions that are fair, reasonable, and tailored to their unique needs.”

Because the legislation amends provisions related to municipal charters, it will require the support of two-thirds of the members in both the House and Senate to pass.

SB 204 is on the Senate agenda for tomorrow’s special session.

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UPDATED – 08/01/25 – House Speaker Melissa Minor-Brown and Senate President Pro Tempore David Sokola Friday issued a joint statement regarding the upcoming special legislative session scheduled for Tuesday, August 12^th at 2pm. This will focus on targeted measures to address concerns after the recent statewide property reassessment.  

While county officials in each county have kept taxes revenue neutral, the school districts had an option to a 10% increase in the school portion of the tax bill – in Sussex County that is about 90% of your tax bill. The only school district in Sussex County that remained revenue neutral is Cape Henlopen.

It’s been decades since reassessment has been done in Delaware. The last reassessment in Kent and New Castle Counties was in the 1980s, but Sussex County has not had property values assessed since 1974! The reassessment process was done over a 4 year period and ended this past spring. According to the current legislation – reassessment will be done every 5 years, which means Delaware will basically be in a permanent state of reassessment from now on – unless the reassessment schedule in the legislation is amended.

Additional information from the Joint Statement from DE House & Senate:

“Over the last two weeks, it has become clear that the reassessment process – despite its goal of promoting a fairer and more equitable tax system – has resulted in unexpected and significant financial strain for many Delawareans in parts of New Castle County.  In particular, we’ve seen a sharp and unforeseen shift in school tax burden from commercial to residential properties.

“Reassessment and tax implementation fall under the authority of our counties and school districts, and we were not made aware in advance of the degree to which residential tax bills would be impacted. We have since confirmed that the General Assembly can take immediate steps to ensure New Castle County residents do not face disproportionate tax swings compared to other parts of the state.

 “We want to be clear that the measures under consideration for this special session represent an initial response to the way reassessment has unfolded across Delaware. In conversations with county leaders, school districts, and stakeholders, we’ve worked to identify responsible, practical solutions that can deliver real relief for residents while making sure the measures we put in place are realistic and workable. While these proposals won’t address every kink in the reassessment process, they are a critical first step toward the broader reforms we know are needed to make sure future reassessments do not involve extreme swings or unfair tax burdens on Delawareans.

“First and foremost, we believe giving school districts the ability to set separate tax rates for residential and non-residential properties will help distribute the tax burden more fairly between residents and businesses.  Several districts in New Castle County have already requested this change as an immediate priority.

“Beyond that, we anticipate the following policies will also be considered during special session:

• Allowing eligible residents to enter into payment plans with no penalty or interest for school taxes. 

• Decreasing New Castle County’s late payment fees for those not enrolled in or eligible for payment plans to 1%. The current structure includes a 5% penalty plus 1% monthly interest. 

• Allowing New Castle County residents who successfully appeal their property values to be eligible for direct cash refunds if they have overpaid their tax bills.

“In addition to these immediate actions, the Legislature will also begin a deeper review of the reassessment process itself so that we can better understand how the New Castle County process led to a dramatic increase in so many residents’ school taxes and recommend additional changes to address any deficiencies and inequities in how the underlying value of properties are determined and the tax burden shared in all areas of Delaware.  We want that review to involve collaboration from all counties and school districts, and lead to legislation in early 2026 to take effect for the next tax year beginning July 1, 2026.

“As we get closer to the special session, we will continue to share updates and details with the public.”

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ORIGINAL STORY – 07/25/25 – House and Senate Republicans in Delaware are proposing action – and urging General Assembly leadership to consider returning to Dover to moderate the fallout from the court-ordered reassessment of all residential and commercial properties in each county. Many of the school districts throughout the state have taken the allowed revenue gain of up to 10% following the reassessment. Legislation drafted by Representative Michael Smith would help to level the playing field – and cap increases at 10%. This measure would also make the bill retroactive to July 1, 2025 and applicable to all public school tax rates after July 1, 2025. Representative Smith’s bill has not yet been filed.

Additional information from the Republican Caucus:  

The genesis of the current issues began in early 2021, when Delaware’s three county governments agreed to reassess all residential and commercial properties in their jurisdictions. The actions settled a lawsuit against the counties, in which the plaintiffs — Delawareans for  Educational Opportunity and the Delaware NAACP — had alleged that an outdated model for valuing property shortchanged Delaware students and public schools.

State law requires that property tax assessments be based on the actual value of the property. The counties are charged with adjusting valuations, but nothing in the Code established how often this expensive and controversial process had to be done, making county officials reluctant to move ahead on their own initiative. Before the lawsuit settlement, decades had passed since property values in any of the counties had last been assessed. Sussex County conducted its previous assessment in 1974, while New Castle County and Kent County last completed theirs in 1983 and 1987, respectively.

Under state law, reassessment is supposed to be conducted in a relatively revenue-neutral manner, with tax rates reset in tandem with the new valuations so that the same approximate total revenue is generated after the process. However, on an individual taxpayer basis, the process is not homogeneous. Depending on multiple factors, some property owners may experience a tax cut, while others remain status quo or face significant increases.

One aspect of the law allows school districts to realize a total revenue gain of up to 10% following reassessment (Title 14, Chapter 19, § 1916). That’s especially significant because, while county governments collect property taxes, they retain a relatively small percentage for their own use. The lion’s share of the proceeds flows to the school districts.

Citing a previously undetected accounting error that placed the district in financial jeopardy, the Appoquinimink School Board surprised residents and lawmakers earlier this month by approving a plan to adjust tax rates to take advantage of the 10% total revenue bump allowed by law.  Had Delaware lawmakers enacted a bill twice proposed by State Rep. Mike Smith (R-Pike Creek Valley), that option would not have been available.

Introduced as House Bill 389 during the 151st General Assembly (2022) and again as House Bill 42 in the 152nd General Assembly (2023), the measure would have required that school districts collect the same total revenue after reassessment.

“The intent of reassessment is to level the playing field and restore equity in property values and the taxes paid by property owners,” said Rep. Smith, discussing his bill two years ago. “I have young children and I support getting schools all the funding required to do everything they need to do,” Rep. Smith said. “At the same time, we have a system in this state that requires the schools to get citizen approval to raise taxes. The current reassessment law allows a significant tax hike to be imposed on Delawareans, subverting the referendum process.”

Both incarnations of the bill failed to gain enough support among House Democrats to advance to the chamber floor for consideration.  The latest version of Rep. Smith’s proposal, which has been drafted but not yet filed, includes two additional caveats.

“I added a provision that allows districts to increase revenue after a reassessment, but limited solely to situations where they would be facing a projected deficit and only to the extent needed to balance the budget,” he said. “Any potential increase would be capped at 10%. This addition will provide some protection for schools, but they’d have to justify the increase with hard, verifiable data. It’s not a Get Out of Jail Free card.”

The second new aspect of the bill makes it retroactive to July 1, 2025, which would set aside the controversial July 8th decision by the  Appoquinimink School District to initiate a 10% tax revenue increase.

“To be clear, this would not usurp Appoquinimink’s authority,” Rep. Smith said. “The board would still be able to increase revenue under this bill, but only to the degree that it keeps the budget out of the red, and they would need to provide specifics backing up their claims,” Rep. Smith said.

Another bill that might help reduce the uncertainties created by reassessment is House Bill 109, which has been held in the House Elections & Government Affairs Committee without a hearing since early April, in violation of House Rules.

Two years ago, the legislature passed a measure that was signed into law, requiring reassessments to be conducted at least once every five years. The prime sponsor of House Bill 109, State Rep. Kevin Hensley (R-Townsend, Odessa, Port Penn), says that while the new law is well-intentioned, it was an overcorrection. His proposal would require reassessment to occur every 10 years.

“Having no deadline on reassessment didn’t work well, but setting it to take place every five years basically means we’ll be in constant reassessment mode,” Rep. Hensley said.  Moderating to 10-year intervals will save millions of taxpayer dollars, reduce stress on citizens, and still provide timely valuations. Just as importantly, if the legislation to eliminate the option the schools have to boost their total revenue every reassessment is not enacted, my bill will halve the opportunity for surprises from twice a decade to once.”

State House Republican Leader Tim Dukes (R-Laurel), State House Republican Whip Jeff Spiegelman (R-Townsend, Smyrna, Clayton), State Senate Republican Leader Gerald Hocker (R-Ocean View), and State Senate Republican Whip Brian Pettyjohn (R- Georgetown) added that they think the Speaker of the House and the president Pro Tem of the Senate should consider bringing legislators back into session to deal with the fallout from the reassessment process.

“Property reassessment was always going to be a complicated process, but the way it’s been handled has left many Delawareans blindsided by sharp tax increases,” Sen. Hocker said. “This is a statewide issue, but it’s being amplified by the concerns we’re hearing from residents in New Castle County facing particularly large increases. If leadership reconvened the legislature, we could start working immediately on common-sense measures that protect both taxpayers and schools, while restoring public confidence in the process.”

“There are a lot of people struggling to make ends meet that are now getting hit with large, unexpected tax increases as a result of this process,” said Rep. Dukes. “This is especially true in New Castle County, which last reassessed during the Reagan administration. If we set a hard date to return to Dover, it would provide the sense of urgency this situation deserves and give us a firm target to speed discussions. We are willing to work with our colleagues across the aisle to explore options that might help curtail these impacts and reduce the pain reassessment is causing.”