Why Should Delaware Care?
Many residents have been outraged by the increases in their property tax burden following the first comprehensive reassessment in decades. With payments due by Sept. 30, state lawmakers are heading back to Dover in August to try to provide some relief.
Following outrage over recent property tax increases, Delaware lawmakers have floated several proposals that they may consider when they reconvene for a surprise special legislative session on Aug. 12.
The proposals follow what many residents, particularly in New Castle County, have described as sticker shock from tax increases that came as a result of the first property reassessments to occur in decades in Delaware — a state well-known for its low taxes.
And many of those complaints have focused on the portion of property tax bills that flow to public schools.
“The school taxes increased astronomically,” Marlene Fowler Gentry said on Facebook in response to a post from Rep. Kim Williams (D-Stanton) announcing the special session.
Citing such criticisms, Rep. Michael Smith (R-Pike Creek) said he has reintroduced a measure that would rescind a law allowing school districts to increase their property tax revenues automatically by 10% following a property reassessment, without going to a referendum.
Under the bill, which in past years failed in the statehouse, districts could still raise taxes without a referendum if they showed that they faced a budget deficit, Smith said.
Earlier this year, several school districts in New Castle and Sussex counties — including Christina, Appoquinimink, and Indian River — chose to increase their tax revenues by the full 10% after a court-ordered, statewide property reassessment came to a close. A handful of other districts increased their property tax revenues by smaller chunks.
“I’m getting a ton of phone calls, a ton of emails, messages, text messages, every single day,” Smith said. “People are clearly hurting or clearly upset.”
Smith said his bill, if passed, would be retroactive and rescind those most recent tax increases, forcing counties to issue refunds to residents who have already paid.
It appears that his measure would not impact property tax increases in Kent County because that local government finalized its new rates a year earlier than New Castle and Sussex counties.
Asked why the state should strip schools of their ability to periodically raise revenue outside of costly referendum votes, Smith said many districts could save more money if they consolidated into bigger, leaner entities.
He also noted that the state government in recent years has funded increases in teacher pay across all districts.
Asked if he believes Democrats, who control the legislative process, would support his proposal, Smith claimed it would be political “malpractice” not to.
Referendums are an ‘exhausting’ process
School advocates flatly disagree that Delaware schools are in a manageable financial position.
Colonial School District Superintendent Jeff Menzer said districts are unsure of what their funding will look like in the future after President Donald Trump’s One Big Beautiful Bill Act takes effect.
And relying on a referendum to grow revenues is an “exhausting” process, he said.
“If it doesn’t pass, you’re looking at changing your resources, whether that’s staff, programs, facilities or opportunities for students, which means you reduce,” he said.
Dwayne Bensing, an attorney for the ACLU, said schools are severely underfunded in the state, perhaps by as much as $1 billion a year –- a figure that a state consultant determined in a 2023 report.
He acknowledged that the state had increased teacher pay in recent years, but argued that it amounted to throwing “nickels and dimes” at a much bigger problem.
“We are presently underfunding every single school district in the state of Delaware, and that, in and of itself, results in a Constitutional violation,” Bensing said.
As an ACLU attorney, Bensing was part of the legal team that sued the state and its counties in Delaware’s Court of Chancery in 2018, claiming the school funding system was failing students who were from low-income households, had disabilities, or were English language learners.
Ultimately, Vice Chancellor Travis Laster ruled in a 150-page opinion that counties’ failure since the 1980s to reassess properties forced school districts to frequently hold costly referendums to keep their revenues in line with inflation.
And their frequent inability to be successful with voters amounted to harm done to students, he concluded.
“If properties were assessed at their present fair market values, then assessed values would increase with inflation,” Laster said.
Following the ruling, Delaware’s counties conducted the state’s first property tax assessments in a generation.
Tax businesses differently than residences?
Another proposal that lawmakers may consider during the Aug. 12 special session would allow school districts to assess higher tax rates on business properties than on residences.
That system already is in place for the counties’ portion of property tax revenue, but recently a question emerged among school district officials of whether they also were legally allowed to do so.
Williams, the Stanton Democrat, said in a Facebook post on Saturday that she had been working on a bill for two weeks that would authorize school districts to tax commercial properties at a different rate than residential – calling it the “way to fix the reassessment tax issue.”
Smith, the Newark-area Republican, said he is supportive of the measure.
Many in the State Senate also appear to be in support. On Tuesday, the Senate Democrats said in a statement to Spotlight Delaware that the measure to charge different rates to businesses and residences would likely be among “a combination of approaches that would restore common sense and fairness into this process.”
Also on Tuesday, Gov Matt Meyer weighed in generally on the issue, stating during a press conference that the reassessment issues warrant a special session. He also asserted that, as New Castle County executive between 2017 and 2025, he was the only county leader to ever cut property taxes in Delaware.
And for counties’ portions of property taxes, he indicated that he did not support automatically increasing tax rates following a reassessment.
“As county executive, I committed to a revenue-neutral reassessment,” Meyer said.