House panel eyes bill authorizing school tax hikes without local votes

DOVER — Legislation that would allow school district boards of education to raise the local property tax without the approval of voters is set to be heard in committee today.

Under the measure, House Bill 129, school boards would have the power to increase school property taxes annually by the lesser of 2 percent or the percentage change in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers.

The main sponsor, Rep. Earl Jaques, a Glasgow Democrat, acknowledged the bill is contentious but believes it’s a better way of funding education.

“If we don’t pass this, then our funding system’s doomed for a while,” said Rep. Jaques, who also chairs the House Education Committee. “We’re not even willing to take the first teeny step, you know what I mean? So, we need to take the first step and pass this.”

While the state and Washington pick up much of the tab for Delaware schools, districts are responsible for about one-third of the burden. Those districts can raise funds through referendums, in essence asking residents to raise their own taxes to allow the school to hire more teachers or build new classrooms, among other uses.

But many say the referendum system isn’t cutting it. Among those critics are several nonprofits that filed suit against Delaware last year alleging the state’s method of funding education is unconstitutional and unfair.

At the core of the lawsuit is the fact property values have not been updated in more than 30 years, meaning school districts are using out-of-date assessments.

In a November opinion denying a motion to dismiss the education funding lawsuit, Vice Chancellor Travis Laster noted districts generally must have successful referendums every three to five years,

“The current regime forces school districts to ask voters on a regular basis to raise their own taxes,” he wrote. “Because the counties are not complying with the Market Value Requirement, the value of a school district’s tax base remains flat. But the cost of running a school district does not remain flat.

Earl Jaques

“Each year, inflation erodes the purchasing power of a school district’s budget, requiring more dollars to achieve the same results. Even if a school district does not introduce any new initiatives and just maintains the status quo, the absence of regular and systematic assessments inevitably generates a funding gap.”

Because districts often go to referendum multiple times in the span of a few years, Delawareans may fear schools are not spending money wisely, Vice Chancellor Laster noted. But in truth, their hands are somewhat tied.

Just in Sussex County, the tax rate varies from about 3 cents per $100 of assessed value in Indian River School District to nearly 5 cents per $100 in Laurel School District. While 2 cents may not seem like a big difference, it can add up quickly.

Rep. Jaques said his bill is backed by school administrators because it would relieve some of the stress of referendums. After Woodbridge School District had a failed referendum in March, the district came back for a second bite at the apple in May. It had better luck the second time around, with the same proposal being approved two weeks ago.

That referendum means Sussex residents of the school district will see their taxes increase by about $70 on average. The hike for the typical Kent resident would total approximately $84.

Woodbridge is far from the only one struggling to keep up with expenses and growth: Christina School District has had three failed referendums in the past four years.

Rep. Jeff Spiegelman, a Clayton Republican, believes the proposal is a “run around” attempt to solve the issue in Christina. He sees the measure as overreach and doesn’t think it will pick up Republican votes.

Similar legislation filed by Rep. Jaques two years ago went nowhere.

The Caesar Rodney Institute, a conservative think tank, wrote in May the bill would lead to “people paying more for the same lack of improved performance,” arguing the problem stems not from money but from government bureaucracy and an unwillingness to commit to changes.

Gov. John Carney, a Democrat, is also opposed to the legislation.

According to Rep. Jaques, had the system created by his bill been in place over the past decade, property owners would have actually saved money.

And although some people have said the measure would take power away from individual citizens by allowing a small panel to raise taxes, Rep. Jaques doesn’t believe that.

“We could raise income taxes tomorrow. What’s the recourse the voters have? Vote us out the next election,” he said. “Well, that’s the same thing that should apply there.

“And maybe, just maybe, this bill will help generate some more interest in our school boards so we get better turnout for our elections and more people that want to run.”

He sees property reassessment as all but inevitable and potentially the best solution to the First State’s education funding woes, although any update to property values would likely have to be court-ordered.

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