With tax hike
in hand, county
finance issue heads to Dover
facetiously after Council enacted the $228.5 million operating
budget he proposed and a 17.5% increase in the property tax to
finance it if he had decided how large an increase he'll seek
next year, County Executive Christopher Coons replied seriously,
He stopped well short of couching
that as an election-year pledge, adding that it depends upon
several things -- the economy, how effective the spending
cutbacks he and his administration have made prove to be, how
much discipline the administration and Council display in
adhering to the spending plan, and the state legislature's
receptivity to the request for fiscal assistance it is soon to
The latter clearly is the
immediate key factor.
Coons told Delaforum that his
staff is completing work on drafts of a five-item package of
proposed state legislation soon to be introduced into the
General Assembly. It includes extending the tax on land-line
telephones to cellular telephones; a 2% add-on to the tax on
hotel and motel rooms; limiting the exemption from the real
estate-transfer tax for first-time homebuyers to the first
$200,000 of the property's purchase price; increasing the state
subsidy for paramedics services or permitting the county to
charge for them; and a cable-television tax.
None of those will be an easy
sell. Lobbyists reportedly are already at work in Dover on
behalf of the affected commercial interests in anticipation of
county government's efforts.
Coons declined to predict the
outcome of the shift in emphasis in dealing with what he and
chief financial officer Michael Strine have been saying for more
than a year is a financial crisis waiting to happen. "My hope is
that members of the General Assembly will respond to the
difficult choices we've made," Coons said.
Council on May 22 enacted the
budget, essentially unchanged from what Coons submitted in
March, by an eight-to-five vote. Council president Paul Clark
and members John Cartier, Penrose Hollins,
Stephanie McClellan, Joseph Reda, George Smiley, Jea Street and David
Tackett voted to enact both the budget and the tax hike. Voting against them were Councilmen
Bill Bell, William Powers, Timothy Sheldon, William Tansey and Robert
one modification came in an amendment to the enacting
ordinance which passed unanimously. It had the effect of
singling out a Council employee, assistant counsel Leonard
Collins, as the first person to feel a direct effect from the
new budget and so far the only county employee to loose a job as
a result of belt-tightening. Elimination of the only occupied
position among several eliminated in the budget will reduce the
county workforce to 1,615 from 1,616 and cut Council's
authorized spending by $133,104 to $3,380,689.
The budget, which also is an
appropriations measure, takes effect with the arrival of the new
fiscal year on July 1. Property tax calculated at the new rate
will be due on Sept. 28, the last workday of that month.
The new rate in unincorporated
areas of the county is 56.14¢ for each $100 of assessed property
up from the present
47.78¢. The rate is scaled down in municipalities depending upon
the extent of county services their residents receive. The
lowest new rate is 19.49¢
in Newark and Wilmington.
voted on the budget, tax increase and four other fiscal measures
-- which were enacted unanimously -- and at a finance committee
meeting earlier in the day, Smiley, who chairs the committee,
said that the fact the measures went through the way they were
originally submitted should not taken to mean that Council was
not an active participant in the process.
"The [fiscal] '08
budget process did not begin on Apr. 2 (when Council began
budget hearings). We've all been looking at ways to generate
additional revenue and cut expenses for over a year," he said.
"This is the most scrutinized budget we've had. ... This entire
Council has been involved. There's no one at this [committee]
table who did not make suggestions."
"We have lifted
every stone and looked under it. We've been responsible. ... The
alternative to raising taxes is cutting government," said
Clark said that he
searched for an alternative to a large tax increase, but could
find none. "I wish somebody could show me an option for [a] 9.9%
[increase]. ... I can't do [that] unless I lay off half of the
police force," he said. "You can't run a government in 2007 with
Tansey praise Coons
and the administration for cost-cutting measures, but said he
was voting against the tax increase "because they could have
pared the budget down more."
Bell said his
negative vote was being cast because "it's difficult to support
a double-digit tax increase [in light of] the level of services
to my constituents." Residents of area south of the
Chesapeake & Delaware Canal whom he represents "do not enjoy the
same level of services that they do in other parts of the
county," he added.
Sheldon said he
"can vote against this with my head held up high" after having
made several cost-cutting and revenue-enhancing suggestions
which have not been accepted.
Street took his
colleagues and predecessor Councils to task for what he said was
excessive generosity "when we thought we were rolling in dough."
He said he was voting reluctantly for the tax increase and
budget because "you have to step forward and do what you have to
do to provide [essential] services," but added, "We've come [to
the present situation] from a whole lot of fiscal
measures included a $11.6 million capital budget for fiscal
2008, a long-range capital program through 2013, an
authorization of sell bonds, and setting sanitary sewer-service
rates unchanged from the present fiscal year.
Council on May 22
also approved a set of pay plans for non-union employees which
extend automatic merit-system raises based on length of service
to 19 years from the present 10 years, while cutting the size of
each of the increases from about 5% to about 2.5%. Present
employees will be positioned on the new scales at the step which
provides the same pay they are now receiving.
ordinances were approved in a package by a 10-to-three vote with
Bell, Smiley and Street in opposition.
The approval came
after officials of three of the unions which represent county
employees charged that the move would subvert the collective
bargaining process. One contract is now being negotiated and the
others are up for renewal early in 2008.
Past practice has
been for employees who do not belong to a union to receive pay
and benefits matching what is decided upon in union contracts.
Setting the non-union scales before negotiations, the union
officials said, appears to be an effort to pressure union
negotiators to agree to the same scales.
Bell took the same
position in comments before Council voted, calling the move
arbitrary and premature. Cartier responded, "Given the fiscal
imbalance in this county it is necessary for us to at least show
a direction forward."
When Street argued
that the measures seemed to set a course for 19 years, which he
said was too far into the future to have an understanding of the
implications, Clark replied that it is intended that the new
scales will be revised long before then. Meanwhile, he said,
they are "the best compromise that could be worked out."
Delaforum that the Financial Future Taskforce, which he chairs,
will reconvene soon to look at various recommendations for
overhauling county government's pay and benefits programs.
Personnel costs account for about three-quarters of the budget.
Also on the
taskforce's agenda, he said, will be consideration of how large
a 'rainy day' emergency fund needs to be maintained. The fund is
currently pegged at 20% of both the operating and sewer-service
While dealing with
finances on a relatively marco level, a discussion of a
mini-level item sparked an unusual display of intramural
acrimony during the finance committee meeting. When Tansey
requested approval of a $440 travel-expense request to attend a
conference in Richmond, Va., Weiner objected on grounds that
Tansey did not report on results of a previous trip as required
by Council rules.
After the exchange
between the two -- who happen to be the only Republicans on the
13-member Council -- became intensely personal, Street
figuratively exploded. Chiding his colleagues for bickering
about a trivial amount in the midst of having to deal with multi-million dollar issues affecting the entire county, he
said, "Either we're committed and dedicated or we're not. We
have to stop playing games."
While other Council
members sat in stunned silence, Tansey withdrew his request.