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January  22,  2008

Coons and Clark say no
tax increase this year
County Executive Christopher Coons said unequivocally that he will not seek an increase in the property-tax rate when he submits his proposed budget for the coming fiscal year. Council president Paul Clark said he wouldn't vote to enact one anyway.

"It is my very real hope that we'll get through this year's budget and next year's" without an increase, Coons said. "I would like to get through to 2012, [although] that is highly unlikely."

He said the outcome of labor negotiations now under way with unions representing most of county government's workforce "is going to be the primary determinant."

The comments from the county's two top officials came in response to questions from the audience at a well-attended 'town meeting' sponsored by the Greater Hockessin Area Development Association on Jan. 21. They apparently put a lid on widespread expectations that property owners are in line for a third consecutive year of higher taxes.

Clark did not dissent from the executive's comments indicating his administration is taking a tough line in the talks, but did say he is concerned that government's ability to attract and retain good employees would be jeopardized if the gap between what they make working for the county and could make in the private sector is widened. Clark specified lawyers and engineers just coming out of college who, he said, can command higher salaries than more experienced counterparts on the public payroll.

"We have a very good labor force. It is well respected," he said. "They need to have a wage they can live on in the county."

Coons had pointed out that employees he appoints outside the county's civil service 'merit' system did not receive pay raises this year. He contrasted that to personnel costs still increasing annually by about 6% -- down, he said, from 8% when he took office three years ago -- well above the rate at which county revenue is growing. Personnel costs account for about 70% of county government spending.

He said there are about 100 fewer county workers than when he took office. The reduction was accomplished through attrition. He also said his administration is responsible for some $30 million worth of budget cuts and enhanced revenue during the past 18 months. "We're doing more with less," he said.

Adhering to a policy of keeping details of contract negotiations secret, Coons did not specify what the administration is offering in the way of pay and benefits. But he did remark pointedly with reference to any increase, "My folks got zero."

He also hinted strongly, without providing any details, that major structural changes in the contracts also are at issue. "There are provisions in our contracts that have to be revised," he said. "We are not going to have an easy year in labor relations."

Contracts covering a large majority of county employees expire in April. As Delaforum previously reported, one which expired last April has gone to binding arbitration -- the first time that has ever happened with a county-government labor contract.

According to a report just provided to County Council, spending during the first half of the current fiscal year was running $3.3 million, or 2%, lower than budgeted. Revenue was off $300,000.

The county finance department is now projecting that spending this fiscal year will exceed revenue by $4.9 million. That does not include three extraordinary obligations -- a $7.5 million judgment in a lawsuit over the still unopened hotel off Interstate 95 near Basin Road; $700,000 in 'lost' revenue as a result of a reduced tax assessment for Verizon Corp.; and the $430,000 state-mandated cost for taking responsibility for dog control. The first two are being appealed.

The report, which is based on an assumption that current fiscal policies will continue, now estimates that budget reserves will run out some time in the fiscal year which begins on July 1, 2010. The report issued last month said that was expected a year later.

Coons said that the budget he proposes in March will include some significant modifications of previous practices. That could include capping spending at 98% of anticipated revenue plus reserves, as state government does. Also possible would be limiting the amount of 'windfall' revenue, such as was produced in past years as a result of the real estate boom, that could be spent on current operations. "We're changing the rules of budgeting as we go forward," he said.

Before the start of the current fiscal year on July 1, Council raised the property-tax rate 17.5% to 56.14 for each $100 of assessed property value in unincorporated areas. It was increased 5% from 45.5 to 47.78 the previous year. The rate is scaled down in municipalities depending upon the extent of county services their residents receive.

Councilman William Tansey, who represents the Christiana Hundred area the 'umbrella' Hockessin association serves, described himself as "an anti-tax person" and said he favors spending cuts over tax increases. "We have to be more diligent about how we're spending money," he said. He did not offer any specifics.

Tansey was one of five members of the 13-member Council who voted against approving Coons's budget request, which included the 17.5% tax increase, this year. He was the only Council member who voted 'no' on the 5% fiscal 2007 increase.

With or without a further increase, Clark said, "at a buck a day ... county government is still the best deal out there." He was referring to the $354 average tax bill for residential property.

Although it collects the total bill, county government does not levy the much larger school and school crossing guard taxes and collects no more than the actual cost of street lighting in communities where developers or residents elect to have lights.

Clark said many residents want increased services without considering that they are directly tied to how much they are willing to pay to finance them. "What we do in the future depends on what you tell us you want us to do," he said.

In response to a questioner who said he or she had never seen a county police officer patrolling in his or her development, Clark said that is not likely to be true, adding that he or she should be grateful that community does not have as much crime as other areas while pointing out that an enlarged Hockessin branch library is scheduled to reopen in April and that the area has well-patronized county parks.

Most of the questions at the meeting were submitted anonymously by attenders using index cards. Joseph Amon, publisher of the Community News weekly newspapers, moderated the meeting.

Coons said his administration will continue to seek approval from the state legislature to expand and diversify its sources of revenue. Specifically, he said, he will press for passage of legislation to increase its share of the hotel tax, as the Wilmington city government did.

Clark said there is a widespread but erroneous belief that county government can impose all sorts of revenue-enhancing schemes. "We do not have the right to impose different taxes. We have to go to the state for permission," he said.

Coons said that county government will not undertake a general reassessment of property values, a move that had been recommended by its financial future taskforce. Under existing state law, the county would be limited to a 15% increase in revenue, which is about what the reassessment would cost, he explained.

"We would tick off a majority of the population and [undergo] months if not years of appeals for no net increase in revenue," he said. "We will not pursue it without a change in state law and that's unlikely."

The officials said the county is looking for economic growth to help relieve its financial situation. Currently in the offing are expected increases in population and jobs as the result of the Army's moving its communications base from Fort Monmouth, N.J., to Aberdeen, Md. "It's a very real possibility we'll have 1,500 [new] jobs with average wages around $80,000 [a year]" in businesses related to the expansion of the nearby base, Coons said. "It's potentially a big win for New Castle County."

"It's not a fight I choose to wade into," Coons said in response to a question about what role county government will play in relation to the ban on dumping yard waste into the Cherry Island Marsh landfill, which goes into effect on Jan. 24.

Unlike Kent County, he said, New Castle will not attempt to set up trash-collection districts but will "encourage civic associations to negotiate with haulers the way you do with snow removal." As to the general issue of increasing the extent of recycling, he said that "is an issue which sits with the General Assembly."

He did say that the Department of Natural Resources & Environmental Control is looking at sites in eastern and western Brandywine Hundred where yard waste can be taken to be mulched. Two such sites are now in operation.

Get more information about this topic

Read previous Delaforum article: County begins labor negotiations

Read previous Delaforum article: With tax hike in hand, county finance issue heads to Dover

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