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June 30,  2006

 For all intents and purposes, it was the kind of uncontroversial measure which passes through County Council -- or, for that matter, most legislative bodies -- to a unanimous vote with little discussion. But Councilman Timothy Sheldon decided the other night not to put proposed Ordinance 06-073 before Council for, as the parliamentary formula goes, its consideration and adoption. Most of his colleagues were not inclined at the moment to approve it, but it was the kind of legislation that politicians do not want to be on the public record as opposing.

Proposed Ordinance 06-073 would give senior citizens and disabled persons who miss the June 1 deadline for filing to take advantage of the county's partial property tax exemption until Jan. 1 to qualify for the companion reduction in the fee for sanitary sewer service. Property tax is due on Sept. 30; the sewer fee is payable in February with the option of deferring half of it until June.

As the measure's preamble points out, existing county code makes late filers eligible for partial abatement of property tax, at one-fourth increments, if they apply for the exemption by Oct. 1, Jan. 1, or Apr. 1. Council, in fact, that same evening used its 'consent calendar' procedure -- no dissent; no debate -- to approve two resolutions granting such abatements to listed property owners.

Discussion at a finance committee meeting earlier in the day demonstrated how two things which appear similar in principle are different and indicated that the taskforce being assembled to consider ways to boost county revenue is likely to take a critical look at a variety of tax breaks -- up to and including the exception that nonprofit organizations enjoy when it comes to paying them.

In short, Council members and the county administration, faced long-term with what has been described as structural defects in the revenue system, are about to look into some heretofore sacrosanct corners to see if they should be swept. And it is not nickels and dimes that they're dealing with.

The finance committee --- which, like all its standing committees, includes all 13 Council members -- was told that real estate tax exemptions 'cost' the county $17 million a year in terms of revenue not collected. By far the largest portion of that, $13 million, is the tax that nonprofits do not pay.

The debate over that exclusion has been ebbing and flowing for well beyond the memory of anyone now participating in it.

Nonprofit organizations receive many of the same public services that everyone else gets. The big one in New Castle County is police protection, which accounts for nearly half of the county budget. To be sure, a nonprofit corporation as such cannot take a stroll in a park although it could benefit from a borrowed library book. There happens to be ample  precedent for dealing with that mix. The county property tax rate is now proportioned in incorporated municipalities depending upon services provided. The same thing could work for nonprofits by requiring them to pay at a proportioned rate.

Justification for taxing them lies in the fact that property tax is based on assets, not income. The argument that a nonprofit entity should be exempt from corporate income tax levied on profits may be valid for those that do not engage in semantics by calling what otherwise would be a profit a surplus or something else. Most nonprofits, however, do own property assets and, in some cases, they are considerable.

The counter argument is that nonprofits do contribute the the commonweal through their employees. That is certainly true in New Castle County with such entities as the University of Delaware and Christiana Care being prime examples. It is also arguable that, by the nature of what many of them do, nonprofits provide the public with services -- social services, in particular -- which otherwise would not be available.

The seniors' tax break is the second most costly at $13 million. Late-filer abatements have been rising -- to nearly $118,000 this fiscal year from $64,000 two years ago.

The argument there boils down to whether seniors with relatively high incomes should benefit. That is something of a judgment call in that the exemption applies to the tax on the first $50,000 of assessed value of a primary residence and is available only if annual household income is less than $50,000.

However, as Councilmen George Smiley and Jea Street pointed out, the real question is whether the over-65 crowd is any more deserving of a break than younger families in comparable circumstances. At a time when encouraging home ownership is public policy, a young family with entry-level salaries is charged the full rate. If there is to be an exemption, the question comes down to whether it should be age-based or needs-based.

In a not unrelated discussion, members of the finance committee discussed the equity involved in allocating county economic development money. It ended up approving budget transfers to provide grants of $75,000 to the Economic Development Council; $50,000 to First State Innovations, a venture capital organization for technology-based business; and $30,000 to Claymont Renaissance Development Corp. Redevelopment director Karl Kalbacher said the grants are intended to offset "a significant loss of jobs" which threatens to erode the area's economy and tax base. "It is important that we continue to look to technology to grow our economy," he said. "We're getting an enormous amount of bang for our buck."

He indicated, for instance, that efforts are underway to attract an ethanol producer to the largely idle General Chemical plant in Claymont, which  would "employ a couple hundred people." He did not elaborate at the meeting nor reply to a later Delaforum inquiry seeking details.

Councilman William Tansey questioned why the Claymont area is the recipient of county financial support while he "has been two years trying [unsuccessfully] to get money for Hockessin." Council president Paul Clark said that county grants are intended as 'seed money' to encourage jobs-related development. "This is to prime the pump; it's not a steady stream," Clark said.

Councilman Penrose Hollins said what is lacking is "a clear process" for determining what gets financed on a consistent basis. "There should be set criteria" and generally available information about "how other communities get to apply," he said.

Tansey agreed. "There has to be a process and we all have to participate in it," he said. "That hasn't been the case in the past."

 A University of Utah study on the use of cellular telephones while driving should be required reading for everyone in the General Assembly. Its conclusion: That is as dangerous and as potential lethal as driving while

under the influence of alcohol or other drug. What's particularly significant is that the cell phoners are more prolific than the drinkers.

State Representative Joseph Miro a few years ago tried to get Delaware to join the ranks of states which ban at least the hand-held variety. He failed when opponents produced a study which showed police infrequently reporting cell phones to be the cause or a contributing factor in accidents. As it happens, these is not one of the listed options on the standard police report and would not show up except in the unlikely event  the responsible driver voluntarily admitted that he or she was using a phone at the time.

The argument that listening to the radio is just as distracting does not hold up. That is obviously a background thing and very few

people give it the same degree of attention that they give to a telephone conversation. Likewise, enforcement is not much of a problem. Casual observation is all it would take to spot violators. Enforcing a ban on drivers using cell phones would be even easier than enforcing the requirement that front-seat occupants use seat belts.  CLICK HERE to read the Salt Lake City Tribune article about the study.

2006. All rights reserved.

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