all likelihood County Executive Christopher Coons
will seek an increase in the county property tax
rate when he presents his proposed budget for the
coming fiscal year to County Council. There
similarly is little doubt that, if he does, Council
will enact one.
"I haven't made that decision
yet," he told Delaforum.
He said that, however, just
after remarks to the monthly meeting of the leaders of areawide civic associations left no doubt that he is leaning
strongly -- probably irrevocably -- in that direction.
Earlier, in a speech before the Hockessin Rotary Club
reported in Community News, he said the question is not
whether taxes will be increased but when they will be
He told the civic leaders on
Feb. 2 that he intends between now and Mar. 21, when he is
scheduled to deliver the budget message, to put the idea
before the public in both personal appearances and media
publicity and seek reaction.
The message he wants to get
across: Take your pick -- a gradual elevation of the rate,
probably in successive years, or a massive hit in 2009.
The hit, he said, would be on
the order of 60%. That is double the order of magnitude
projected last year when the Coons administration began
talking about an eventual tax hike.
He told Delaforum that simply
dividing the ultimate increase into equal installments
during the next three years "wouldn't work out
mathematically," but that more palatable annual increments
can be devised.
Property owners in
unincorporated areas of the county currently are taxed at
the rate of 45½¢
for each $100 of assessed value. That is scaled down in
municipalities based on the amount of county services
received, but those property owners also pay a local tax.
County rates have not gone up during the past nine years.
Assessments, which haven't been changed in more than a
generation, are well below real estate market values.
"It would better serve my
political interests to run out the clock" on the absolute
need for a tax rate increase, Coons said. "I could wait
[until 2009] and leave it for whoever comes next." That is
probably more rhetoric than reality because, barring some
major change in circumstances, no one expects Coons not to
seek re-election to a second four-year term in 2008.
If Coons's presentation to
the civic leaders is any indication, the question he is
putting before the public is hardly rhetorical.
Council president Paul Clark
was even more direct. If the little-at-a-time approach is
not taken now, what will happen come 2009 "will surely shock
you," he said.
As Delaforum has previously
reported, the prospect of a tax increase is raised by the
steady consumption of the budget reserve used to finance
The recent mid-fiscal year
projection by chief financial officer Michael Strine was for
reserves to drop from $86.8 million at the end of fiscal
2005 to $80.8 million next June 30. He is looking for
reserves to be down to $4.4 million on June 30, 2009, and be
overdrawn by $27.2 million in fiscal 2010. An overdraw is
theoretical because county government is required by law to
operate on a balanced budget. The reserve is exclusive of
the $28.5 million currently set aside as a 'rainy day' fund
to meet genuine emergencies.
Coons told the civil leaders
that simple arithmetic explains what is happening to the
Thanks largely to the real
estate boom and population growth which boosted the county's
share of the state reality transfer tax, "a fair amount of
money was salted away" during the administration of his
predecessor, Tom Gordon. However, Coons charged, the reserve
as not managed well. "Some [of it] was not budgeted
properly" and county government went on a spending spree in
fiscal 2004, he said. Coons was president of County Council
Overall, he said,
property-tax revenue is increasing between 1% and 2% a year
while the transfer tax and fees are going up around 3%. On
the other hand, personnel costs -- largely health insurance
and other employee benefits -- are climbing at an annual
pace of 7%. Personnel costs are by far the largest category
of governmental expense.
Currently, Coons added, the
county also is being buffeted by the sharply escalating cost
of energy. Energy costs are now projected to come in some
$500,000 over budget this fiscal year with the full effect
of the planned Delmarva Power increase to be felt in fiscal
'07. He did say the county is looking to consolidate the
costs to heat and light its 54 buildings so it "can
negotiate [rates] as a unitary buyer" and exploring the
possibility of finding an alternative supplier if the higher
rates spur competition.
Since taking office a year
ago, Coons said, he has been "cracking down on the cost of
county government." But, he added, costs-cutting can go only
Along with seeking a tax
increase, if that is the course to be followed, he added,
his administration will continue to keep control of the
purse by "prudent fiscal management, ... controlling the
growth of government and managing [delivery of] services."
He hinted that, when it can
demonstrate that its finances are under control, county
government will seek from the state General Assembly
additional sources of revenue. He was not specific on what
they might be.
In deciding how to proceed,
the proverbial bottom line is to balance fiscal reality with
the public's expectations regarding government services,
During a series of 'listening
sessions' he, Clark and the respective Council member held
in each of the 12 Council districts, "we heard people say,
'We like what we have [in the way of services] and we want
more of them, but we have no bright new ideas about how
you're going to pay for them'," Coons said.