approval to budget, tax hike
uncharacteristic fashion, County Council zapped through a half
dozen fiscal measures. In just 20 minutes, it approved a
$224.5million spending plan and a 25% property-tax increase to
help pay for it; polished off some non-substantive resolutions;
and adjourned its most significant session in many years.
there was not total agreement among the lawmakers on the key
measures, there was no floor discussion or debate. Only one
attender in an audience, composed mostly of county officials and
other employees, took advantage of the public comment session to
County Executive Christopher Coons standing by to immediately
sign the five ordinances into law -- the one fiscal resolution
did not require his signature -- the session on May 26 brought
to near resolution a crisis which has been dramatically
escalating for nearly a year.
be resolved is how the police department will handle its portion
of the $2.2 million that was lopped from the salaries-and-wages
line of the Department of Public Safety budget by an amendment
approved by an 11-to-two vote just before the budget ordinance
was enacted. Layoffs of trainees and rookie paramedics already
have been announced in the other divisions of the department.
administrative officer Tracey Surles told a Council finance
committee meeting earlier in the day that the administration was
"very close" to an agreement with the police union on a new
contract. That presumably will involve concessions to meet its
role in what Coons has called a 'share-the-pain' approach to the
financial pinch. The public has been told so far that the choice
is between lay-offs and a 5% pay cut, but there is no way to
tell what else may be on the table in the secrecy-shrouded
not have a ratified agreement we can publicly talk about yet ...
[but] we hope to bring them (the negotiations) to a conclusion
soon," Surles said. After the meeting, Joe Lavelle, president of
Fraternal Order of Police Lodge 5, corroborated Surles's report,
but did not reveal any details.
Truitt, president of the New Castle County Volunteer Fire
Association, testified at Council's plenary session that the
paramedics layoffs and possible layoffs of police officers will
adversely affect county residents.
budget ordinance was approved 11-to-two with Timothy Sheldon and
Jea Steet casting the negative votes.
and Street also voted against the amendment which apportioned a
total of nearly $4.8 million in pay cuts among the departments
and constitutional 'row' offices. They were joined by David
Tackett in opposing amendments which spread out over five years
the additional 'contribution' county government has to make to
its employees' pension fund to make up losses in asset value of
its investments as a result of the recession and one that made
additional cuts in the constitutional offices' budgets.
amendment extending to Council's administrative staff and the
county auditor the 5% pay cut other county employees are taking
while restoring the structure of annual 'merit' increases to
match what the other employees are receiving was approved
ordinance imposing the property-tax rate increase -- clearly the
most controversial of the batch -- drew the narrowest support
with William Powers and Robert Weiner joining Sheldon, Street
and Tackett in voting 'no'.
the rate for the coming fiscal year at 70.18¢ for each $100 of
assessed property value in unincorporated areas of the county.
That will be scaled down to 24.36¢ in Newark and Wilmington and
25.29¢ in Delaware City, Middletown and New Castle. The rate in
municipalities is determined by subtracting the estimated cost
of county services property owners there do not receive because
they are provided by the municipal government. The current rate
in unincorporated areas is 56.14¢.
administration has said that the increase will cost owners of
residential property assessed at the countywide average about
$100 more a year. The tax is due before Sept. 30. For the
majority of homes it is paid by mortgage holders from escrow
accounts financed by the owners' mortgage payments.
sparked discussion at the finance committee meeting when he
proposed introducing an amendment to the tax ordinance which
would specify that the higher rate would apply only to the
fiscal 2010 obligation. While acknowledging that a rate increase
is necessary because of the "extreme fiscal crisis" in which
county government finds itself, he said that "at the end of the
[fiscal] year, [it should] revert back to the current rate."
withdrew the idea when county attorney Gregg Wilson pointed out
that state law directs County Council to annually set a tax rate
which balances the budget it approves. That means that,
theoretically, it neither increases nor decreases a rate, but
sets a new one each year. As a matter of general law, Council
cannot bind future Councils to set a lower tax rate or, for that
matter, to do anything, Wilson added.
Bell said the size of the rate increase this year points up the
need to reimpose a ceiling on future increases. Council three
years ago removed the former 5% ceiling and enacted a 17.5%
increase the following year.
Smiley, who co-chairs the finance committee, pointed out that,
despite a 25% tax-rate increase, the budget for the coming year
actually will be lower than it was this year. It calls for
$161.2 million on operations, or 3.7%
less than $167.5 million, the most recent estimate of
expenditures during the current fiscal year. The sanitary-sewer
budget for fiscal 2010 will be $63.3 million, or 2.4% higher
than estimated $61.8 million being spent this year.
Council at the plenary
session unanimously approved a 10% increase in sanity-sewer
rates to finance that budget.
It also approved --
with Powers, Sheldon and Tackett voting 'no' -- spending $57
million on 20 capital projects while deauthorizing $58.7 million
for 17 projects. That ordinance authorized sale of $19.9
million of general-obligation bonds. Acting chief financial
officer Ed Milowicki told the finance committee that the
administration does not anticipate going to the bond market
until 18 months to two years from now.
Council president Paul
Clark said during the committee meeting that Council should
approach the fiscal 2011 budget in a more fundamental way by
looking at "what we want out of this government ... [and[ what
that is going to cost" as it goes along rather than waiting for
the county executive to make a proposal in March. He noted that
some of that has been done in the past -- having achieved, for
instance, such things as limiting the number of automobiles
county employees are authorized to take home -- but said the
effort should be more systematic.
Except for the
amendments drafted by the administration, the approved budget
is unchanged from what Coons requested in March. Only one of
the four amendments -- the one involving its own staff --
originated with Council.
"We haven't, as a
Council, suggested any substantive changes," Street said. The
budget hearings that Council held "were basically information
sessions," he added.
to Council's role in determining what county government spends,
William Tansey said, "All it has been is a lot of rhetoric. We
don't do anything ... but tax the taxpayer."
disagreed. He said that he and other Council members have been
carefully monitoring the fiscal situation and contributing ideas
and suggestions as the administration put together its budget
request. "It isn't a case of where we start looking at the
budget in March," he said.
Cartier said much of what drives the budget "is beyond our
control." While it is generally agreed that county government
needs more diversified sources of revenue, "very reasonable
proposals ... have been before the [state] General Assembly for
a number of years" without any action being taken to implement
Hollins pointed that New Castle County is "not unique in the
fact we're having a challenge now in balancing the budget."
of the national economy has affected local governments all
across the nation. Unlike the federal government, they are not
permitted to finance deficits by borrowing or the proverbial
'printing money' which the federal government can do.
see an economic indicator that [shows that] next year we will be
better off than we are now," Hollins said.