Why Should Delaware Care?
Costs are rising for residents and governments alike in Delaware, forcing public officials to make difficult decisions about whether to trim programs or raise taxes. New Castle County did both, and faced outcry from several residents who argued that inflation over the past year has already been too much of a burden.
The New Castle County Council approved a 17% property tax increase as part of its nearly $400 million operating budget on Tuesday.
For the median homeowner in a $378,000 property, the tax increase equates to approximately $102 per year, or about $8.50 per month. Notably, the increase applies to only a small portion of a property owner’s annual tax bill, because the vast majority of the cost goes to school districts. The new property tax rates are 18.46 cents per $100 for residential property value and 27.9 cents per $100 for non-residential property.
The budget also includes a 5% increase in sewer consumption rates.
Officials said the tax increase – combined with cuts to land preservation and libraries, as well as increases on certain fees – was necessary to close a $42 million deficit the county faced for the 2027 fiscal year, which begins July 1.
The council passed the budget ordinance in a 11-2 vote. During a debate prior to the vote, Councilman Dave Carter said the cuts and tax increases reflected the “best spot we can get to,” given the county’s tough fiscal position. He noted that the majority of the county’s budget pays for staff salaries, and many of those are negotiated union contracts.
“I don’t see where there’s anything that can be cut without hurting something else at this point,” Carter said. “You can shift things around but short of massive layoffs, we just can’t do it.”
Salaries, wages, and benefits account for 62% of the 2027 operating budget, according to a Spotlight Delaware analysis of the budget.
Carter and other council members also criticized the Delaware legislature for imposing what they called “unfunded mandates.”
Still, several residents pushed back against the hike. During a public comment period at the Tuesday council meeting, more than a dozen residents voiced opposition to the tax hike, with many noting it would come just a year after residential property tax bills skyrocketed for many following a first-in-a-generation property reassessment.
Among the two dissenters on the council, Councilman Kevin Caneco argued the current deficit is due to the county previously “kicking the can down the road,” and relying too much in past years on federal COVID relief dollars.
While residents are facing a rising cost of living, he argued that his colleagues were saying with their vote, “you have to foot the bill because we as a government were incompetent.”
“Eventually this charade has to stop,” Caneco said.
County Executive Marcus Henry first proposed the tax during his budget address in March, saying then that the county had paid for costs with federal dollars in recent years, which has led to a strain now that the flow of those dollars had ended.
He also told Spotlight Delaware then that his budget conversations in late 2024 with the outgoing county executive – now-Gov. Matt Meyer – had led him to believe the fiscal woes would have been more manageable.
“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 in March.
During Tuesday’s meeting, two council members proposed amendments to Henry’s budget that would have made steeper cuts. None were adopted.
Among the residents who spoke during the public comment Tuesday was Victoria Morris, who told the council she opposes the tax increase due to the rising cost of living. She said she believes the council should have considered reallocating funds from underperforming projects or investigating property tax exemptions given to large organizations.
“We all are tightening our belts. How is anyone supposed to afford the additional taxes and especially at that rate?” she asked.
The county tax increase will bring in about $23 million. To close the remainder of the $42 million deficit, the county will also raise credit card fees for sewer bills and land use permits, as well as allow 56 unfilled positions to go unfunded, and cut about 10% from library budgets.
The budget also cuts $2.5 million for open space and Agricultural Preservation, $2.8 million from the Community Services Department, and $1 million from some of the county’s special events.
At Tuesday’s meeting, the County Council also adopted a resolution sponsored by Carter, urging the Delaware legislature to require comprehensive fiscal analysis before imposing costly mandates onto the county. The analysis would include an examination of the impacts on county operations, services, or revenues for state legislation.
“This resolution is simply urging or asking the General Assembly when they pass legislation impacting and mandating the county to do things that they include a detailed fiscal note,” Carter said.
