of the proposed $230.2 million county budget and a 5% increase
in the property tax rate to partly finance it is a virtual
certainty. County Council also will most likely enact the $58.3
million capital budget and approve a $75 million bond issue to
help finance it. There also will be a modest 2.4% upward
adjustment of sanitary sewer service rates.
Although the package of
legislation to be enacted at Council's next session, on May 23,
will be unchanged from what was proposed in March by County
Executive Christopher Coons, it would be completely wrong to
characterize Council's expected action as rubber-stamping. On
the contrary, the series of budget hearings which ended on May
15 were anything but replicas of the perfunctory
'dog-and-pony' shows that took place in recent past years.
Administration officials were required to present detailed
information about the specifics of what they want to spend in
the coming fiscal year, the number of employees it will take,
the goals they seek to accomplish and the challenges they expect
along the way. Council members, sitting as a committee of the
whole, asked several pointed questions and not always agreed
with the answers.
The only logical conclusion to be
drawn from observing both process and content is that the Coons
administration has fully justified what has to be considered a
politically unpopular position.
Although Council members are
reluctant to go on the record at this stage with definitive
responses, there is strong evidence of general support. Most
significantly, no one has come forward with any proposed
amendments to the budget, according to Councilwoman Karen
Venezky, chair of the finance committee, and Michael Strine, the
county's chief financial officer, through whom any changes would
have to be administratively processed.
Less clear is the prospective
vote on the tax increase, but observers at this writing are
agreed that it has comfortably more than the seven votes
required to enact the ordinance to effect it.
Only the two Republicans on the
13-member Council responded to a recent attempt by Delaforum to
poll members on their views. "The proposed budget has structural
problems which must be addressed to balance the budget without a
tax increase. The budget process is satisfactory, the results
are not," said William Tansey. "It
is intuitive that ultimately there will have to be some
adjustment in tax rates given the rate of inflation. When
aggressive cost cutting measures are coupled with aggressive
efforts to seek approval from the state to authorize new revenue
streams, I am not opposed in principle to modest tax-rate
increases tied to the rate of inflation," Robert Weiner said.
George Smiley, vice chair of the finance committee, and David
Tackett would say only that they were undecided.
There hasn't been an increase in
the property tax rate for 11 years, during which time the
previous Gordon administration -- rightly or wrongly --
accumulated large reserves to a great extent as the result of
getting a larger share of the state real estate transfer tax
coincident with a real estate boom. About $80 million of that
reserve still exists, exclusive of the so-called 'rainy day
fund' to deal with unexpected emergencies.
That raises two logical
questions: Why increase taxes while there is still enough money
available to fully cover the difference between planned spending
and anticipated revenue? How can it be claimed that there is a
looming fiscal crisis when the professionals who rate county
bonds say New Castle County is in better financial condition
than all but a relative handful of counties across the nation?
The administration's response to
both is the same: For several years, the reserves -- frequently
referred to erroneously as surpluses -- have been presented to
the public in a manner which has masked the real situation. The
county's limited tax structure and ability to collect fees for
certain services has limited revenue growth while the cost of
government has increased at a far greater rate.
Unless something is done now to
moderate the imbalance, the reserves will run out during fiscal
2009 and, the argument goes, a massive tax increase or drastic
reduction in county services or, more likely, both will be
necessary to make up for the years when there were not more
gradual increases. The example of Delmarva Power's electricity
rates is cited as illustrative of the point.
The Coons administration is
relying on the relatively modest proportions of the proposed
rate increase to bolster it's case. An additional $16 a year on
the average-value residential property -- $5 if the owner
qualifies for the senior discount -- is a small amount to pay
for commonly appreciated police, emergency medical services,
libraries and parks. Expressed another way, ratepayers receive
$1.26 worth of county service for every dollar they pay in
taxes. And, besides, the property tax burden in Delaware ranks
48th among the 50 states.