School Tax Hike Without A Referendum? Del. Legislation Addresses That Possibility

Delawareans could face increases in their school property taxes without a referendum being held, but legislation to be introduced in the General Assembly would address that scenario.
The state’s three counties have been reassessing their properties in compliance with terms of a lawsuit settlement over the fairness of Delaware’s school funding formula. In Sussex County, there had not been a reassessment in more than 40 years.

State law requires that a reassessment be revenue-neutral, with tax rates established so the same approximate total revenue is generated at the end of the process. The law allows school districts to realize up to a 10% total revenue gain following reassessment.

“The intent of reassessment is to level the playing field and restore equity in property values and the taxes paid by property owners,” Representative Mike Smith, R.- Pike Creek Valley said. Smith is prime sponsor of a bill that would eliminate the possibility that reassessment could produce a school revenue bonus.   

“I have young children and I support getting schools all the funding required to do everything they need to do,” Smith added.  “At the same time, we have a referendum process in this state, with schools needing citizen approval to raise taxes.  The loophole in the current reassessment law essentially allows a significant tax hike to be imposed on Delawareans without their knowledge or consent, subverting the referendum process.”

County governments collect property taxes on behalf of government services as well as public school districts. In Sussex County about 90% of the property tax bill is for the local share of operating public schools.