September  12,  2007

Tax exemption ordinance
to return for a second round

Property-tax exemptions for seniors and disabled persons have been given a reprieve, but County Council members indicated they'll be receptive to a revised proposal to significantly reduce the benefits and tighten eligibility to receive them.

"I'll be back shortly with another piece of legislation. ... Sooner or later this Council is going to have to put up or shut up," George Smiley told his colleagues. "Sooner or later we have to make the tough decisions to bring this county to fiscal responsibility."

"This isn't gone," Council president Paul Clark said of the idea of restricting exemptions. "We don't have to do it now, but it's going to happen eventually."

Smiley, who chairs Council's finance committee, sponsored the measure which, among other things, would have reduced seniors' exemption from the first $50,000 of assessed residential property value to $32,000 and the ceiling on income to qualify for the exemption from $50,000 to $22,500 for single applicants and $27,500 for married couples who jointly own a house.

Smiley announced at a finance committee meeting several hours before the proposed ordinance was to have come to a vote at Council's semi-monthly plenary session that he was withdrawing it.

Other than to say that he intended to "rework" the measure to include some suggestions he has received, he did not give a reason for pulling it. It appeared to observers, however, that he did not have the seven votes required for passage and that he felt constituent pressure was the reason.

His surprise announcement touched off a lively discussion at the committee meeting -- during which it would seem that the idea of restricting tax exemptions in light of what has been called a looming county government financial crisis has nearly unanimous support. All 13 Council members are on all standing committees and all were present for the finance committee meeting.

Only two Council members -- Stephanie McClellan and Robert Weiner -- raised specific objections saying that, if enacted, Smiley's ordinance faced a challenge based on the constitutional principle of equal protection. It would have treated differently present recipients of benefits, future recipients and applicants whose house is assessed for more than $125,000.

They and almost every other member praised Smiley for taking leadership on the issue. There were several references by different Council members during the conversation to making proverbial tough decisions, but no one advocated doing so right away.

In sharp contrast to what happened at the afternoon committee meeting on Sept. 11, there was no discussion after Smiley made the withdrawal announcement which counted at the evening plenary session. The latter, however, did not draw a crowd, as had been expected after the proposed ordinance received media publicity. Committee meetings also are open to the public.

On the other hand, the proposal did attract considerable telephone and e.mail response directed at the Council members. One aide said the volume came close to matching what was generated most recently by the highly controversial accessory dwelling unit legislation, which eventually was enacted by a one-vote margin.

Smiley said the public response clearly illustrated that "the majority of residents of New Castle County have no idea how this government functions ... people don't understand what we're doing."

He said conversations he held with callers demonstrated that residents do not understand such basic things as the differences between county and state law, what services county government provides and the limitations imposed by state law on how to raise money to pay for them.

He and Clark said many of the messages they received were abusive. Smiley said he was willing to take abuse "as long as I know what I'm doing is right."

Penrose Hollins, the longest-serving member of Council and co-sponsor of  the proposed ordinance, chided his colleagues for taking a political approach to significant issues instead of viewing them objectively.

"We can't always wave a flag and see how the wind is blowing," he said. While voting to provide politically popular tax exemptions and increasing them "is easy to do," a time comes to take unpopular positions in order "to steer New Castle County on the right course."

He said "no other county [in the nation] has an exemption program as liberal as ours," adding that it "has gone far beyond anything that is reasonable."

"Folks from other states come here to retire because of the significant difference in taxes," Jea Street said.

"Target the benefit to give it to people who need it," John Cartier said. "A lot of seniors aren't exactly needy."

Smiley did not say how soon he intends to introduce a new version of the proposed ordinance. The one he withdrew would have applied to exemptions for the fiscal year beginning July 1, 2008. Eligibility is determined as of June 1. A like provision in the new measure would mean that only those now receiving exemptions under present law would be 'grandfathered' to continue doing so.

In a separate matter, William Tansey introduced a proposed ordinance that would require a three-fourths majority vote in order to enact any increase in the property-tax rate. A three-fourths majority is 10 affirmative votes. He previously withdrew a version of the measure that would have modified Council rules to that effect in favor of one incorporating it as a provision in the county law code.

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