back in play as
county budget takes shape
Executive Christopher Coons will propose "bare bones" operating
and capital-spending budgets for the coming fiscal year and
acknowledged that the possibility of a third consecutive
increase in the property-tax rate is back on the table.
recently as the turn of the year, Coons was talking about not
only holding the line next year but also hoping to avoid a hike
in fiscal 2010.
after he and chief financial officer Michael Strine painted the
gloomiest picture yet of county government's fiscal situation at
the bimonthly meeting of officers of areawide civic
organizations if a tax increase was now in the offing, Coons
told Delaforum, "We are looking hard at all our options."
said at the meeting that "if we do [nothing more than] what
we're doing now," spending in the year beginning July 1 will be
about 7% higher than this year. The administration, he added, is
trying to squeeze that prospect into a budget that will grow by
no more than 5%.
scheduled to present his budget request to Council at a special
session on Mar. 18. Council must enact a budget before the end
of May. The approval process this year will be conducted as
Coons's job and seven of the 13 Council seats, including the
presidency, are up for election in November.
event, Strine said, the budget reserve,
exclusive of the 'rainy day' emergency reserve, on which the
Coons administration has been living since taking office three
years ago is projected to run out some time in late calendar
'09. "We're about back to where we were before" the current
property-tax rate was set last May.
A 17.5% rate increase brought it to 56.14¢ for each $100 of
assessed property value in unincorporated areas. There was a 5%
increase in fiscal 2007.
Strine again primarily
blamed this year's lower-than-anticipated revenue on a fall-off
in collections from the county's share of the real estate
transfer tax as a result of the slump in the residential housing
market and the reduction in short-term interest on invested
funds as a result of the Federal Reserve Board's efforts to
stimulate a recession-bent economy by several cuts in its
benchmark interest rate.
Also, since January,
the county has come out on the short end of the consequences of
court-related activity. The civic meeting on Mar. 6 followed on
the heels of published reports that former chief administrative
officer Sherry Freebery is seeking reimbursement of $3.7 million
of legal fees incurred in defending against federal corruption
charges. All but a token count, to which she pleaded guilty,
president Paul Clark said the reimbursement policy was put into
place to protect police officers, code inspectors and county
officials from liability in court actions related to their
duties as county employees. He said Council already has hired an
outside attorney to advise it concerning Freebery's claim. "This
is being taken very seriously," he said. "You can bet we're
going to be looking closely at every cent."
Coons said that, "on
advice of counsel," he would not comment on the claim. The
county is a party to a civil suit challenging the reimbursement
policy. With apparent reference to Freebery's claim, he added,
"Odds are there will be a lawsuit brought."
Coons and Strine both
said the long-term solution to the county's fiscal woes is
relief from the state legislature. The General Assembly failed
to act last year on measures requested in that regard.
Strine said that
efforts will be renewed this year to get authorization for an
increase in the lodging tax from 8% to 10%. That would match
what Wilmington government collects and would be "in keeping
with that great Delaware tradition of getting tax revenue from
people who don't live in Delaware," he said. People who come
here on business would be the largest source. Visitors, he
pointed out, benefit from taxpayer-supported public services
The county also is seeking the ability to levy a tax
on cellular telephone bills comparable to what it receives from
taxing landlines telephone service.
Clark said it is difficult to explain to the public
that county government doesn't have the authority "to tax all
sorts of things without permission from the state."
Strine said there has been an increase in the number
of sheriff sales and recording of mortgage satisfactions
resulting from refinancings, but so far no indication that New
Castle County residents are abandoning properties which are
worth less than the debt on them. Instances of that are
increasing elsewhere in the nation. Also, he said, although the
inventory of listed but unsold houses is up, there has as yet
been no significant drop in prices of those that are being sold.
Coons said it is not likely that the General Assembly
will authorize -- and pay for -- a total reassessment of
properties, much less approve setting up a system of 'rolling
assessments' that would tie assessment to increases in property
values. That would result in property-tax revenue increasing
roughly in step with increases in the cost of providing
services. The downside, however, is that when property values
decline, so does revenue.
"If we had that since 1997, we'd be in good shape
today," Clark said. The real estate boom was largely credited
for allowing property owners in the county to go 10 years
without a tax increase.
From a politician's point of view, he added,
reassessment is a 'no-win' proposition: The third of property
owners whose taxes increase don't like you; the third whose
taxes don't change "don't like you anyhow" and the third whose
taxes go down "soon forget what you did for them."