Delaware proposed budget could lead to Kent County tax hikes

DOVER — If Gov. Jack Markell’s proposed budget passes in its current form, Kent County residents could see their property taxes increase by nearly 25 percent.

Jack Markell

The budget recommendations from the outgoing governor, released last week, would take about $2.2 million away from Kent County — about 8 percent of the county’s current budget. Residents of Delaware’s middle county, who currently pay 30 cents per $100 of assessed value, could then see the tax rate increase another 7 cents.

The budget would alter the funding for school transportation and construction as well, moving more of the costs to the districts. That could also result in higher taxes for Delawareans.

The good news is that the governor’s recommended budget is just that — recommended.

Lawmakers and Gov.-elect John Carney, who takes office next week, will put their imprints on the budget over the next five months, and some of the particularly controversial elements are likely to be eliminated.

But other aspects suggested by Gov. Markell could remain.

Currently, whenever someone buys property in Delaware, it is taxed at a rate of 3 percent, with that money being evenly split between the state and county in which the property rests. Gov. Markell has called for raising the tax to 4 percent and shifting a quarter of a percent to the state, meaning the counties would get 1.25 percent instead of 1.5 percent.

He’s pushed to change the funding structure of the paramedic program, with is currently a 30/70 split between the state and counties.

The two changes would save the state government $21.8 million. That comes at a cost of $21.8 million divided between the three counties.

While each county would be affected differently in terms of how much money they would lose from the realty transfer tax alteration, the impact would be about the same proportionally, according to state officials.

“Hopefully the new governor will take a close look at what’s been proposed by the current governor and will certainly move into the direction that will not adversely affect the counties,” Kent County Levy Court President P. Brooks Banta said. “It would be a drastic blow.”

Mr. Banta, who believes Kent has already cut its budget about as much as possible, is hoping the state will revisit its spending.

P. Brooks Banta

Paraphrasing Sen. Colin Bonini, a Dover Republican who has strongly argued for cutting expenses, Mr. Banta said Delaware’s issues lie with its spending, not its revenue.

State policy-makers need to carefully consider increases in expenditures, he said.

In Kent County, the realty transfer tax goes to funding paramedic services — a program officials recently expanded.

“It does present a significant challenge because just last year we opened up an additional paramedic station down in Frederica,” Kent County Administrator Michael Petit de Mange said.

The county would strive to avoid a tax increase, he said, mentioning potential cutbacks to parks and libraries, as well as delays in replacing county vehicles, as ways to save money.

A task force created by the General Assembly has been meeting for several months to discuss potential changes to how the state and counties share funding responsibilities.

Because of Delaware’s small size, the state government takes on many services, such as education and corrections, commonly handled more at a local level.

According to Sen. Harris McDowell, a Wilmington Democrat who co-chairs the powerful Joint Finance Committee, that structure has allowed Delaware’s counties to maintain the lowest average tax burden in the nation.

Michael Petit de Mange

Mr. Petit de Mange, who is serving on the task force on behalf of Kent County, was not surprised to see changes to the realty transfer tax and paramedic program proposed, although he did say the recommendations were “somewhat preemptive” given the group has not finished its work.

“Every year it seems like we’re playing some level of defense on” the realty transfer tax and paramedic program, he said.

The Joint Finance Committee proposed shifting some of the counties’ share of the transfer tax to the state two years but then quickly walked back the proposal amidst local outcry. Both Mr. Banta and Mr. Petit de Mange said Friday they had not talked to state officials about the proposals.

State budget officials said last week the tax recommendation could serve as a “carrot” to incentivize the counties to reassess property values, something not done in decades.

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