Sussex County Settles Reassessment Lawsuit – Reassessment to Begin Later this Year
Sussex County will settle with litigants in a years-long legal debate over real estate assessments used by Delaware’s counties to calculate annual tax bills, paving the way for a new valuation of all properties to occur in the county by mid-2024.
County Council, at its weekly meeting Tuesday, April 13, 2021, voted to enter into a settlement agreement with plaintiffs in the education funding lawsuit brought against Sussex, as well as the State and its other counties in the Court of Chancery in 2018, alleging an inadequate and outdated model for valuing property shortchanges Delaware students and public schools. Despite the County’s challenge to the litigants’ claims, the court ruled in favor of the plaintiffs last year, then ordered all parties to work toward a remedy.
Council’s action brings to a close the legal wrangling over the issue, and lays the groundwork for the County to move forward on a general reassessment of all properties, to be completed in time for tax bills to be issued in the latter half of 2024. Sussex County has joined Kent and New Castle counties, as well as the State, in settling their respective portions of the litigation.
“This is not a decision today that we take lightly, nor is it one that we frankly welcome. This will have real implications for every property owner in Sussex County and across the state,” County Council President Michael H. Vincent said. “Unfortunately, the court did not rule in our favor, and while we may disagree with the outcome that now ties our collective hands, the reality is our options moving forward were limited. We believe settling this case today will avoid any further costly legal battles, and that this step is ultimately in the best interest of the taxpayers we serve.”
The settlement will be finalized with the litigants, and filed with the court, in the coming days, according to County Administrator Todd F. Lawson. Once complete, the County will begin the evaluation of vendors to perform its first general reassessment since 1974. County officials expect to select a vendor later this spring from proposals submitted last month.
Under terms of the settlement, the process – expected to cost an estimated $9 million, with funding coming from County reserves – will begin later this year, and conclude by mid-2024. All properties, whether undeveloped or with improvements, will be evaluated and re-calculated based on current industry-accepted methodologies to produce new assessments that will reflect their true value in money, a requirement under Delaware law cited by the court in its decision.
Assessments, combined with a governing jurisdiction’s property tax rate, are part of the formula used to determine individual tax bills that property owners receive each year. Bills include taxes for both County and local independent school districts. Delaware law requires Sussex County to bill property owners for school taxes on behalf of the local districts, with those funds then turned over to the State. Approximately 10 percent of the typical residential tax bill in Sussex County is for County property taxes; the remaining 90 percent is for local schools.
County officials will provide additional updates as the reassessment process commences later this year. Information will be posted via the County’s website at www.sussexcountyde.gov/assessment.