Delaforum

News

May 15, 2007

County tax increase
not yet a done deal

No one seriously doubts that County Council will approve County Executive Christopher Coons's proposed $164 million operating budget, $60.6 sanitary-sewer budget and $11.6 million capital-spending budget, but his request for a 17.5% increase in the property-tax rate could be a different story.

Councilman George Smiley, chairman of the finance committee, told Delaforum that he is looking for a split decision which will be at least as close as the nine-to-four approval of a more modest increase last year and possibly even closer.

There has been no indication so far that any member of Council is ready to bring forth a substitute budget or offer any substantive amendments to any of the five ordinances in the legislative package setting county government's fiscal course for the year beginning July 1 which will be voted upon on May 22.

That means that, in the still unlikely event that Council were to reject the tax increase, it would be necessary for the Coons administration to dip more deeply into the operating reserve and further slash what it already terms a bare-bones spending plan.

Chief financial officer Michael Strine estimates that the reserve will total about $68 million on June 30. That would be sufficient to support current spending until November, 2008. If the proposed budget, including the tax increase, is approved, he said the reserve will not run out until early in the 2010-11 fiscal year.

Except for Smiley, who said he personally favors enactment of the fiscal package, and Council president Paul Clark, who told Delaforum he is "leaning toward supporting" it, Council members were coy when discussing their intentions or ignored an e.mail request from Delaforum posing  specific questions in that regard.

William Powers, who represents the western half of the area south of the Chesapeake & Delaware Canal, would not give a direct response, but noted that "there are a lot less [county] services in my district than you have [in Brandywine Hundred]." Bill Bell, whose district covers the southeastern portion of the county, did not attend the last in a series of budget hearings on May 14 nor did he respond to the e.mail.

William Tansey, co-chairman of the finance committee, who also was not present at the hearing, has previously expressed opposition to a tax increase, and Timothy Sheldon has indicated he would like to see more cost-cutting measures than Coons has proposed or put into effect. Robert Weiner told Delaforum he wants to further "consider the opinions of my constituents" before finally deciding how he'll vote.

Last year, Sheldon, Tansey, Weiner and former Councilwoman Patty Powell, who was Powers' predecessor, voted against a 5% tax increase. That was the first in 11 years and the maximum the executive could propose under a county law which has since been repealed. Tansey cast the sole vote against approving the 2006-07 budget.

The proposed increase would bring the rate in unincorporated areas to 56.14 for each $100 of assessed property value, up from the present 47.78. The rate is scaled down in municipalities depending on the extent of county services their residents receive.

Although the county tax is generally considered to be relatively modest, compared to property taxes in nearby Pennsylvania, New Jersey and Maryland, two of the five public school districts in the New Castle County are proposing heftier increases, also levied on the value of real estate. Residents of the Red Clay district will vote at a referendum on May 17 and Brandywine residents will go to the polls for that district's second try on June 4.

At the May 14 budget hearing, Strine told the finance committee that the proposed capital budget is intended to finance only projects currently underway. Major items included in it are: replacement acquisitions for the motor vehicle fleet, $3.9 million; Glasgow regional park, $1.9 million; information systems, $1.7 million; and expansion of the Bear branch library, $1 million. Included in $23.7 million to be spend on sewer projects are $4.4 million for rehabilitation of the system in southern Brandywine Hundred and $2.9 million in northern Brandywine Hundred.

Planned spending of $34.2 million, he said, will be partly offset by removing $21.4 million in previously authorized capital spending from the program and not renewing  $1.2 million in authorizations due to expire at the end of this fiscal year.

Although the county debt is currently at 1% of assessed taxable property value, which is well below the 3% ceiling, Strine said that the amount of planned bond sales is limited because "we don't have the money to pay the mortgage (debt service) on new borrowing." Three bond sales currently are planned. The first will seek to raise $50 million and the subsequent ones $25 million each.

The package of ordinances on which Council will vote includes the operating budget, the sewer fund budget; setting the county  property tax rates for unincorporated areas and municipalities; setting the sewer-service rate; and authorizing the sale of bonds. No change is proposed in the sewer-service rate.

Get more information about this topic

Go to the budget summary on the New Castle County webpage

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