Officials to eye merging state’s school districts

From left, Sen. Brian Pettyjohn, Sussex County Administrator Todd Lawson and Rep. Harvey Kenton during a State/County Finance and Revenue Committee meeting. (Delaware State News/Marc Clery)

From left, Sen. Brian Pettyjohn, Sussex County Administrator Todd Lawson and Rep. Harvey Kenton during a State/County Finance and Revenue Committee meeting. (Delaware State News/Marc Clery)

DOVER — Among the 50 states, Delaware is nearly unique in that it assumes many of the responsibilities normally borne by counties, officials say.

Because of its small size, the First State can take on duties that other state governments could not handle. Delaware, for instance, provides more funding for its school districts than most states do and operates a statewide correctional system with no difference between prison and jail.

But those added responsibilities carry greater costs. In 2015, lawmakers proposed shifting a portion of the realty transfer tax from the counties to the state. After uproar, the plan was withdrawn.

Wednesday, lawmakers, county administrators, state officials and others convened for the first meeting of the State/County Finance and Revenue Committee, a task force created by the budget bill to review the funding structure and provide recommendations to the General Assembly and governor.

State/County Finance and Revenue Committee chairman Dennis Greenhouse during a meeting of the task force Wednesday.

State/County Finance and Revenue Committee chairman Dennis Greenhouse during a meeting of the task force Wednesday.

While the committee is examining cost-sharing, Sen. Harris McDowell, D-Wilmington, said the goal is not necessarily to move some expenses from the state to the counties.

“It’s an effort to open communications before we’re deep in the weeds, problems at all the different levels. All the different levels facing challenges in the immediate or near future,” he said.

The realty transfer tax could see a change. Currently, all property acquisitions have a 3 percent tax, of which half goes to the state and half to the local government. For property located in municipalities, the 1.5 percent is allocated to the town or city, while it is paid to the county when the property lies in an unincorporated area.

The committee also plans to look at consolidating the county register of wills offices and making changes to the County Paramedics Program.

Another potential topic of discussion, brought up briefly Wednesday, is merging school districts.

The state has a “structural problem and it’s big,” New Castle County Executive Tom Gordon said, questioning if Delaware can afford 57 municipal governments and 19 school districts.

Members agreed to add at least one school representative to the committee to ensure the districts have a say in any potential changes.

Part of the state’s problem comes from the fact some of its special funds, such as the fund created in 1999 with money from the National Tobacco Settlement, are drying up.

“As you well know we’ve pretty much run out of what I like to call little hidey-holes,” Sen. McDowell said.

Finance Secretary Tom Cook questioned if the committee should consider re-assessing property values. Although the legislature has the power to change the value of homes for tax purposes, it has not altered the valuations in any county in 29 years. Kent saw its last adjustment in 1987, while New Castle was last changed in 1983 and Sussex in 1974.

Controller General Michael Morton reports during a committee meeting at Legislative Hall on Wednesday. (Delaware State News/Marc Clery)

Controller General Michael Morton reports during a committee meeting at Legislative Hall on Wednesday. (Delaware State News/Marc Clery)

While many people, such as those in beach houses, would see their taxes go up, some would actually benefit from lower taxes.

Mr. Cook told the committee he is aware the assessment issue is one “people don’t want to touch” but cautioned that shifting costs without greater changes could free up state funds while hindering the counties and municipalities.

Several reports have been commissioned over the years, but there has been no legislation re-assessing the values.

The Controller General’s Office has been digging through old budgets to determine when certain cost burdens were first placed on the state or local governments but may not be able to determine an exact starting point for each.

“Short of digging up people that are dead we’re going to have trouble asking questions about what happened then,” Controller General Mike Morton said.

Reach staff writer Matt Bittle at mbittle@newszap.com

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