Why Should Delaware Care?
As New Castle County faces another difficult budget year, officials are proposing a significant property tax increase to close a projected shortfall while prioritizing funding for public safety initiatives.
In his annual budget address Tuesday, New Castle County Executive Marcus Henry proposed a 17% property tax hike on residents – a major increase that officials say will only partially close a $42 million budget deficit facing the county in the coming fiscal year.
Henry’s remarks follow a year in which county officials repeatedly had to pull money from reserves to cover expenses amid a drop off in federal funding and fallout from the county’s recent property tax reassessment.
If the New Castle County Council approves Henry’s proposed budget, the next fiscal year would become the first since 2019 to feature a tax rate increase for the county’s share of property taxes.
“It’s time, unfortunately,” Henry told reporters during a budget briefing on Monday.
Asked then about budget conversations he had with the outgoing county executive — now-Gov. Matt Meyer — Henry took a deep breath and laughed. Then he said he didn’t know in late 2024 that the deficit was going to be as large as it is today.
“I was presented information that showed us in a deficit, but it ended up being much, much larger than what I was shown,” Henry said.
Tuesday marked Henry’s second budget address, after entering office in 2024.
Henry also said the county kept “revenue neutrality” following a 2024 property reassessment, meaning it did not take in additional tax dollars. The county’s share of property tax bills is a little under 20% of the total, Henry said. The rest goes to school districts.
If approved, the tax hike will bring in about $23 million for the county to cover the $42 million gap between expected costs and revenues for the next fiscal year, which begins in July.
The county will also split tax rates for commercial and residential properties for another year, according to Henry’s budget.
The proposed operational budget totals just over $387 million — a 4.4% increase over the 2026 fiscal year.
Henry said the county had been in a budget deficit for several years, but costs were previously covered by one-time federal appropriations that the county received as a result of the COVID pandemic.
Budget cuts and increased fees
To restore fiscal balance over the long-term, county officials have described a “multiyear approach,” which includes some plans to increase spending, such as on workforce training and in public safety and public works.
Henry also said the county is going to work with state legislators in Dover to diversify its sources of revenue. County officials also said they want to convince the General Assembly to allow them to shift the responsibility of school tax billing and collections back to the school districts.
“This structural deficit was built over several years, and that’s what we’re trying to cure,” Henry said.
After relying on reserves for the past year, officials also say those backup funds are under strain.
If approved, Henry’s budget would reduce the general fund tax stabilization reserve to roughly $25 million and the real estate transfer tax reserve to about $22.5 million, according to County Chief Financial Officer David Del Grande.
And in order to make ends meet, county officials are also raising fees.
The county will begin charging credit card fees for sewer bills and land use permits. Sewer consumption rates would also be increased by 5%.
Additionally, a total of 56 positions of the county’s full-time workforce, which Del Grande called “back office” positions, will also go unfunded for 2027, saving the county nearly $6 million in expenses.
The county currently has a hiring freeze on all “non-essential” employees.
“It’s also health care that we don’t need to provide for 56 people, which is actually the burden.” Del Grande said.
Henry asserted that there will be no layoffs or salary reductions for existing employees as part of the new budget proposal.
County officials have also decided to cut $2.5 million for open space and Agricultural Preservation. DelGrande and Henry noted that both projects currently have funds in them, so they are not being eliminated.
The county is also cutting $2.8 million from the Community Services Department, with a portion of that from a reduction for part-time employees.
Almost $1 million has also been cut from some of the county’s special events, some of which, like New Castle’s annual Sleep Under the Stars event, will be paused for a year.
Finally, libraries also will be impacted. Under Henry’s budget, the county will close libraries to the public one day a week, though no two locations will close on the same day, allowing residents to still access services. The closures will contribute to almost $900,000 in avoided costs.
Separately, in its capital budget, the Glasgow Library project will be pushed back for a year. The proposed capital budget has also been reduced by 10% to more than $75 million.
Budget increases
This year, Henry wants to focus on public safety.
For fiscal year 2027, the county will propose an allocation of almost $4 million for union-negotiated wages, reflecting contracts covering about 84% of the workforce. It also added a little over $5 million to public safety to maintain service levels and support filling vacancies, such police, paramedics, and 911 operators.
“Keeping people safe is our priority,” Henry said.
The county will also allocate $1 million toward its property assessment office to add 10 more positions.The additions, if approved, would bring the office total to 39 positions. The County Council recently approved adding the first five positions to the office.
Rounding out the increases in spending is a $1 million increase for wastewater treatment, and $4 million for county employee healthcare premiums.
The County Council is set to vote on the budget on May 26.
