Executive Christopher Coons asked County Council for
a 5% increase in the basic property tax rate while
promising to cut "millions of dollars in costs
without affecting vital services," curb spending and
seek financial help from state and federal
Coons presented Council with
a proposed $230.25 million consolidated budget for the
fiscal year which begins July 1. That would be up 7.35% from
the $214.49 million budget it approved a year ago.
The fiscal 2007 plan includes
spending $165.07 million on government operations and $60.2
million for sanitary sewer service. Comparable fiscal 2006
figures in the originally approved fiscal 2006 budget are
not included in the budget document, but the most recent
'snapshot' report on the county's financial situation
projected actual spending in those categories this fiscal
year to be $122.6 million and $56.2 million, respectively.
Coons also proposed a further
increase in sewer-service fees, which he said would amount
to an additional $9.36 on the average residential bill. That
increase, he said, is needed to cover a 117% increase in the
cost of electricity to operate pumping stations on the sewer
Coons also handed Council a
proposed $58.37 million capital spending plan, which would
be up from projected expenditures of $42.3 million this
fiscal year. The county has delayed going to the bond market
to borrow for capital projects, but officials have said that
it will be necessary to do so soon. Debt service on bonds is
paid from the operating budget.
Council is expected to
scrutinize proposed departmental budgets more thoroughly
this year than in the past. A series of public hearings has
been scheduled before it acts on the entire budget package
in late May. In recent past years, approved budgets went
through virtually unchanged from the executive's proposal.
Council members are
particularly wary of voting a tax increase. Six of the 13
seats are up for election in November.
Council president Paul Clark
said after Coons's address on Mar. 21 that he wants "to work
the numbers" before committing one way or the other on a tax
increase. "I want to work with Chis on this ... to see what
serves the citizens of New Castle County the best," he said.
Councilwoman Karen Venezky,
who chairs Council's finance committee, said Council "owes
it to the taxpayers to see if we can cut costs" to a greater
extent than Coons proposed "before we talk about a tax
increase." Venezky, whose term expires this year, has
declared that she will not seek re-election.
Coons presented the proposed
tax increase as being the equivalent of "a modest $16 a year
... for the average homeowner." The average bill, due at the
end of September, would increase from $326 to $342, he said.
For owners who qualify for the senior-citizen discount, the
average would go from $100 to $105.
The proposed new rate in
unincorporated areas of the county is 47.78¢ for each $100
of assessed property value. That would be scaled down in
municipalities to 16.59¢ in Newark and Wilmington. Those
lower rates are based on the amount of county services which
residents of the municipalities do not receive. The current
basic rate is 45.5¢.
Coons detailed an extensive
array of county services paid for primarily by property and
real estate transfer taxes. The largest portion of county
spending -- 48% -- goes for public safety. Other categories
are: libraries, 14%; parks, 13%; land use and code
enforcement, 8%; and sports, recreation and community
programs, 6%. Administrative overhead, he said, accounts for
6% of the general fund spending.
Although Coons listed several
cost-cutting measures to be imposed during the coming fiscal
year, he declared that "cutting costs alone is not enough"
to meet the county's structural financial problems.
"While I do not lightly
propose this property-tax increase, it is the most fiscally
responsible thing we can do given our situation," he said.
Even if the tax increase is
enacted, Coons said it will require using $10 million from
the county's budget reserve -- which he likened to a
family's savings account -- to balance the budget. There is
no intention to use the so-called 'rainy day fund', a
reserve apart from the budget reserve maintained to meet
genuine emergency situations.
He said that, on top of cuts
during the current fiscal year, his proposed budget foresees
"zero growth" in the size of the county workforce. There are
about 1,650 county employees. Adding 10 additional police
officers will be offset, Coons said, by eliminating 18
unfilled positions in operating and administrative
departments. Overtime, seasonal employment, travel and
training will all be reduced, he said.
He said there will be no
significant program initiatives and that $4 million has been
cut from existing programs . Another $4.5 million in
additional financing requests from department managers have
been denied, he said.
Coons spoke in vague terms
about seeking federal financial assistance. He said the
county absorbed a 15% reduction in federal financing but is
"not in a position to replace additional funding cuts."
He said he will ask the state
legislature to increase the county's share of the real
estate transfer tax by eliminating the exemption for first-time home buyers, irrespective of their
incomes, as it applied to that portion of the tax. According
to Michael Strine, the county's chief financial officer, the
exemption amounted to $3.5 million last year. Some of the
increased revenue would be used to support 'affordable'
housing and home-ownership initiatives, he said.
Coons reiterated the previously
reported contention that incremental tax increases beginning
this year will eliminate the necessity to go for a massive
increase or impose draconian cuts in county services
two or three years hence.