June 6, 2003

Legislators will be asked to approve most of the elements of a plan to shore up Wilmington government's revenue structure before they call it a session and go home at the end of June. House majority leader Wayne Smith said there is about an 80% chance that will happen.

Governor Ruth Ann Minner said in a press statement issued on June 5 that she is having legislation drafted to implement four of  five recommendations from a taskforce she appointed to come up with possible solutions to what Mayor James Baker and other city officials have described as 'structural defects' in the municipal income stream. A sixth recommendation does not require General Assembly action.

The taskforce described those recommendations as "near-term action" and asked to be allowed to explore ideas with "potential longer-term benefit."  Minner acceded to that request, announcing that she is extending the life of the panel, which was created by gubernatorial executive order in late March.

Smith, a Republican, told Delaforum on June 6 that he supports endowing the city with power "to make revenue decisions to deal with the structural problems." He explained that would involve a legislative package different from what Minner and the taskforce are proposing. He indicated that might include some additional ideas and be sufficient to address the entire problem now.

"We're not talking about a massive handout, but [about] giving them the tools they need to deal with their situation," he said, adding that he has confidence in the ability of Baker and his administration to follow through.

Minner's press statement said she will ask the Assembly to enable the city to obtain a better return on its investment in Hoopes Dam and Reservoir, the primary backup for northern New Castle County's potable water supply.

Asked by Delaforum if that indicates she endorses the taskforce's potentially controversial proposal to levy a $1-a-month charge on all water customers as  compensation for the city's providing a quantity of stored water to tide the area over in the event of another serious drought, Gregory Patterson, Minner's press secretary, replied that the measure that will be submitted to the legislature "is being reworked [and] may be a little different" from what the taskforce recommended. He would not elaborate.

In the taskforce's scenario, the 'water availability charge' would be accompanied by increases in rates charged customers of the city's water service. The new rates would still be considerably lower than those charged by the area's two profit-making water utility companies and the Newark municipal system. The Wilmington system serves both city residents and businesses and those in several nearby suburbs.

The other taskforce recommendation that would generate a significant amount of  new revenue is imposing a 'hosting fee' to compensate the city for providing a location for the Cherry Island waste-disposal landfill. Different ways of charging the fee are offered as suggestions in the taskforce's report, but they also would amount to the equivalent of a $1-a-month charge on residential customers throughout the county.

Patterson said Minner considers that "a matter to be worked out between the city and the [Delaware] Solid Waste Authority."

The press statement said she also intends to propose that the Assembly authorize the city to levy a sliding-scale admissions tax on tickets to sports and entertainment events and a 2% surtax on top of the state's 6% lodging tax to be paid by patrons of hotels in the city. The franchise tax which Conectiv Power is charged on its sales of electricity would be extended to include sales of natural gas. The company considers that tax to be a cost of doing business included in its rate base and thereby paid by all its customers.

Another proposal is to increase the fee the Wilmington Parking Authority pays in lieu of taxes. That amount is set by a contractual agreement and does not require legislation.

Patterson said the legislation will be submitted soon in the form of separate pieces of proposed legislation rather than a stand-or-fall package. It has not yet been determined who will sponsor the bills, he said.

Pressed for specifics, Smith said he agrees with using city assets to leverage income. He added that he supports a city lodging tax but is opposed to taxing tickets costing less than $10, such as admission to Wilmington Blue Rocks baseball games. Asked for an example of a possible revenue source beyond those in the taskforce report, Smith cited capitation taxes levied by some townships in Pennsylvania but stopped short of saying he will advocate that.

Patterson would not link the apparent improvement in the national and regional economies to the revenue plan. He did describe it as "an entirely separate matter" from consideration of revenue measures, now pending in the Assembly, to deal with the state's financial problems.

Before making her intentions known on June 5, Minner conferred with Baker. She pledged to continue to be supportive as the taskforce takes up the longer-range issues.

"There is no question that the economic health of the city relies heavily on the economic health of the city of Wilmington," the press statement quoted her as saying.

2003. All rights reserved.

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