‘Outrageous’: Delaware lawmakers schedule special session to address anger over higher property tax bills

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Delaware lawmakers plan to go into a special session in August to address the frustration that’s been mounting as residents across the state receive their first tax bills since historic property reassessments.

Legislators are expected to return to Dover on Aug. 12 to consider legislation aimed at trying to ease the cost of higher property values which resulted in hundreds or thousands more dollars owed for some home and business owners. At issue is school taxes and the residential tax burden.

The history of assessments

Delaware’s three counties went decades without conducting property value assessments. New Castle County went 41 years without doing one. Kent County did it in 1987, and the last one in Sussex was in 1974.

The reassessments were prompted by a lawsuit brought by civil rights groups that argued that the lack of current property assessments contributed to inequities in how schools were funded. A Chancery Court judge agreed in 2020 that all property should be taxed equitably and at fair market value.

Special session purpose

House and Senate Republicans called for a special session last week. Gov. Matt Meyer said he supports the move to address what he calls “outrageous tax bills.” Meyer was New Castle County executive when the assessments, conducted by third-party vendor Tyler Technologies, began.

New Castle County Councilman Dave Carter said property owners, such as homeowners, condo owners and land owners, all saw their properties shoot up in value, while commercial and other properties saw increases at a slower rate over the past 40 years.

The county’s chief financial officer, Jill Floore, told the county finance committee earlier this month that residents are seeing their share of the tax burden swell from 67% to about 76%.

New Castle County for the first time did separate rates for residential and commercial properties. Officials promised that the overall impact of the reassessments will be revenue-neutral for the county, but individual property owners have seen their property taxes rise, fall or stay about the same.

Wilmington Mayor John Carney told a town hall in April that his administration believed that Tyler was off in assessing certain neighborhoods within the city, with assessed values and market values at odds. His office did not respond to a request for comment. Wilmington also did separate rates for commercial and residential properties.

In response to questions from Councilman Kevin Caneco during a county finance committee meeting, Michael McFarlane, manager of Southern Appraisal Region & Consulting Services with Tyler Technologies, said the much higher percentage of vacant commercial properties is one reason those properties went down in value.

“It does not mean the process is wrong,” Caneco said. “You might fundamentally disagree with the assessment, but it does not mean that the numbers were wrong or the counting was wrong. It means that, unfortunately, we have a changing market.”

School districts raising rates

Property owners and state lawmakers are also pointing the blame at some school districts, such as the Christina and Appoquinimink school districts, for taking advantage of state law, which allows them to take a 10% windfall in tax receipts following a property reassessment. Appoquinimink said it was exercising the clause provided to districts because of accounting errors, sparking the auditor of accounts to open an audit of the district’s books.

Gov. Meyer said he believed the issue was on the school tax side, not the county side.

“We are a low property tax jurisdiction,” he said. “That’s very important to Delaware and I think it’s something that needs to be addressed and needs to be fixed.”

Christina School Board President Monica Moriak said they were also affected by the drop in commercial property values in New Castle County, but districts were unable by law to break out the difference in rates between residential and commercial rates like the county did.

She said that the district would support lawmakers giving them that ability.

“We as a school district are trying to work with the legislators so that we can significantly lessen the tax burden on our taxpayers,” Moriak said. “And also figure out how we help people who are already being hit by this increase.”

State Sen. Spiros Mantzavinos, D-Newport, said the special session is needed because there were a lot of surprises in the process that people didn’t expect. But he said any relief lawmakers provide won’t be in the form of checks to taxpayers.

“There’s got to be some ways that can provide some meaningful relief to people in the short term,” he said. “Maybe then we’ll take a look later on, some of the more longer-term or bigger issues around reassessment. So I would hope we come away with something that provides some immediate relief to those folks.”

This story was supported by a statehouse coverage grant from the Corporation for Public Broadcasting.