|
Richard Korn, lead plaintiff in the taxpayer suit challenging
the budget and seeking a refund, told Delaforum that the
probability of his pursuing the issue further "is rather slim,
if [it exists] at all." He left the door slightly ajar, however,
by saying that he had yet to confer with his lawyers in the wake
of an adverse Court of Chancery decision.
Chancellor William Chandler on May 31 denied a request from Korn
and co-plaintiff Andrew Dal Nogare for a preliminary injunction
blocking the $214.5 million budget from taking effect. Granting the injunction
would have paved the way for arguing that some or all of the
county's accumulated budget reserves should be returned to
taxpayers.
Although the only question officially before the judge was the
injunction, he took the opportunity while ruling from the bench
after about 90 minutes of oral argument to outline his thinking
about the probable future course of the litigation. That was
encapsulated in two sentences: "The county had a problem which
the court identified. New Castle County and its officials acted
in good faith to remedy that."
County
Executive Christopher Coons read that as a complete vindication
of the approach he and his administration have taken in managing
county finances since taking office in January. "This ruling
sends an important message to New Castle County taxpayers that
we are doing the right thing and that the judicial branch
supports our contention that these [budget] reserves are
appropriate," he said in a press statement issued after the
ruling. Coons did not attend the hearing.
Korn
was almost equally insistent that Chandler had upheld his
position. "I'm very satisfied that what we set out to do we
accomplished," he said.
Korn's
view is that the suit was successful on two of three significant
issues it raised. In a previous ruling, he pointed out, Chandler
held that the policy of former County Executive Thomas Gordon's
administration of keeping some reserves -- Gordon referred to
them as a surplus -- in off-budget accounts not established by
Council through legislative action was illegal. Korn said that,
because of that successful challenge, the county's budgeting and
reporting process was brought further out into the open than it
had been previously and county officials are being held more
"accountable for how they handle the people's money."
"If
our lawsuit was not brought, county government would have
continued in the same way they were operating," he said. "The
process is only more transparent now because we made it more
transparent."
He
said he doubts that those things would have occurred anyway with
the change of administrations. As president of County Council
for four years before being elected to be county executive,
Coons "knew what was going on ... [or] had the duty and
obligation to know what was going on," Korn said.
He
added that the six Council members who continued in office when
Council was expanded -- one of whom has been replaced with a
Gordon appointee -- shared that obligation.
Chandler strongly indicated in his comments from the bench that
Korn and Dal Nogare would most likely fail on the refund issue.
The harm resulting from the complexity and cost of arranging a
refund, not only of property tax but also real estate transfer
tax and other county revenue sources, would "far outweigh" any
harm to the public from not receiving a refund, the judge said.
While
acknowledging that he was the one who initially raised the
issue, he said that harm would be acerbated by requiring the
county to cut back its 'rainy day' reserve from 20% to a maximum
of the 5% reserve for emergencies that state government
maintains.
In a
footnote in his original opinion, which was issued in February,
Chandler questioned whether the state has the power to delegate
to the county the authority to establish a reserve greater than
the state constitution allows the state government to have.
Chandler said he had raised the point only as "an interesting
question, philosophically."
In a
practical vein, he said, the record shows that the "clear
intention" of the General Assembly in amending the constitution
was to establish a fund to control spending during a budget
crisis in the 1970s and not to curb savings. Moreover, he added,
there was no intention to thereby impose a limitation on county
governments.
During
the injunction hearing on May 31, county attorney Gregg Wilson
argued that budget reserves "are built up in good times ... to
be there to protect the public in lean times."
The
county reserves that the lawsuit challenged, he said, are the
result of the Gordon administration taking advantage of "a
bubble of prosperity" to set aside money "that is now being used
to hold off future tax increases." As a result, he added, "the
public is not distressed in any way by these funds" and, in
fact, "there has been no public support" for having any of the
reserves returned.
Arguing for the plaintiffs, lawyer Gary Traynor said the Gordon
administration "set aside massive amounts of taxpayers' money"
to be used as it saw fit. And, he went on, the present reserve
accounts set up by Council in response to Chandler's initial
ruling are, in fact, "legislative slush funds."
"They
are not what your honor had in mind when you directed the new
Council to go back and set things right," he said.
Chandler in his remarks refuted that. He said Council did so in
"an open process ... [where] the public could hear and see" what
was happening. "All of that, it seems to me, was done in good
faith to comply with my order," he said.
Korn
declined to say how the lawsuit was financed, citing traditional
lawyer-client confidentiality.
He
told Delaforum that he intends to maintain an interest in county
affairs. "I am going to stay active ... if I can contribute and
participate in some meaningful way," he said.
He
added that he does not know whether he will again seek elective
office. He ran unsuccessfully in 2004 for the Democratic
nomination to run for election as county executive, coming in
second to Coons in the primary election. Sherry Freebery, the
county's chief administrative officer during Gordon's
administration, also ran.
|
