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Enactment
of the first increase in the property tax rate in 11
years was described as just a first step toward
providing for the long-term financial health of
county government. At best, the 5% boost "will buy
us additional time to deal with our [long-term]
fiscal problems," chief financial officer Michael
Strine said. |
Before County Council
approved the tax hike by a nine-to-four vote, Councilwoman
Karen Venezky, who chairs its finance committee, announced
that she will present a resolution establishing a taskforce
to look at potential new sources of revenue and develop a
strategy for tapping into them.
"We're not going to just sit
around and talk," she said. The taskforce will be required
to produce "concrete recommendations by the end of the year"
with a view to mounting an effort to secure enabling state
legislation when the General Assembly opens its next session
in January.
County Executive Christopher
Coons endorsed the idea of establishing the taskforce and
said it and the follow-up after it reports will be a joint
effort by the legislative and executive branches of county
government. It is intended, he said, to build on the
cooperative relationship which resulted in a relatively
smooth process leading to enactment of a record $229.9
million operating budget and the higher tax rate to help
finance it.
The panel will include
representation from both the public and private sectors and
probably will employ consultant services. Its meetings will
be open to the public, Venezky promised.
Although she said that
"everything is on the table" as far as what the taskforce
will consider, she indicated that seeking to share proceeds
from one or more of the several state revenue streams
would be most logical course. "Only one other state --
Mississippi -- doesn't have revenue sharing. I find that
odious," she said. The only state tax which New Castle
County now shares is the real estate transfer tax.
Moreover, she added, the
state pays for several public services -- ranging from
police protection to snow-plowing -- which Kent and Sussex
Countians receive while New Castle County residents have to
finance them with county taxes. "We get back only about 30%
of what we pay [in taxes] to the state," she said.
Recognized as a less-likely
possibility is property reassessment, which would affect
both county and school district tax rates. The last
reassessment was in 1985 and current assessments are based
on 1983 market values. The finance committee was told that a
reassessment would likely result in a third of property
owners paying higher taxes, a third paying lower taxes and
the other third paying an unchanged amount. In terms of
total revenue produced, however, the immediately resulting
increase is limited to approximately what it would cost to
conduct the reassessment.
Before Venezky publicly
announced her intention to establish the taskforce,
Councilman Robert Weiner sparked immediate controversy by
proposing that consideration be given to curtailing or doing
way with incremental pay increases for county employees
based on length of service. "The county is off its
financial track and is headed for a collision," he said,
adding that dealing with personnel costs, which account for
72% of county spending, is the only way to avert that.
He placed three resolutions
based on that idea on the Council agenda for introduction,
but withdrew them after several of his Council colleagues
and officials of some of the unions to which county
employees belong expressed strong opposition on the grounds
that such issues are more appropriate topics for collective
bargaining than for legislative action. Weiner said that his
intent had been to launch discussion of the matter and
expressed satisfaction that that had been accomplished.
Venezky, the second
longest-serving member of Council, has announced that she
will not seek re-election in November and so will be out of
office when the taskforce reports.
Council's approval of
the budget on May 23 was by a 12-to-one vote, with
William Tansey opposing it. He was joined in opposing the
higher tax rate by Patty Powell, Timothy Sheldon and Weiner.
Except for some last-minute
tweaking, which shaved $316,491 from the bottom line, the
enacted budget was what Coons had requested in March. The
tax increase is the maximum permitted under county law.
The spending plan, which
combines general operations and the cost of providing
sanitary sewer service, is up 7% from what was approved a
year ago for the current fiscal year, which ends on June 30.
Strine said actual spending this year is projected to be $5
million under budget. As a result, the approved fiscal 2007
budget, if fully spent, represents a 9% increase.
Property owners in
unincorporated areas of the county will be billed 47.78¢ for
each $100 of assessed property value with payment due by
Sept. 30. The current rate is 45.5¢. The fiscal 2007 rate
will be scaled down in municipalities, depending on the
extent of county services provided, to 17.22¢ in Delaware
City, Middletown and New Castle and 16.59¢ in Newark and
Wilmington.
The same legislation imposes
variable increases in the taxes to finance street lighting
and school crossing guards, depending respectively upon the
type of fixture and public school district served. Also
enacted was a modest increase in sewer fees, which are based
upon water consumption, said to align charges with the
actual cost of providing that service.
The rest of the package of
revenue ordinances, which were each approved by 12-to-one
votes with Jea Street in opposition, included a $58.5
million capital budget and six-year capital-spending plan,
neither of which contain significant new projects; and
authorization to sell $70 million worth of bonds this summer
to finance capital spending and replace money 'borrowed'
from reserve accounts and $50 million worth early next
calendar year.
Coons signed the package of
legislation into law immediately after the Council session.
During the session and at a
finance committee meeting earlier in the day, Council
members were unanimous in praising Strine and the Coons
administration for the cooperative effort to explain and
justify the proposed budget. Venezky said that literally no
questions went unanswered during the series of budget
hearings which her committee held.
George Smiley, vice chairman
of the finance committee, said that, as a result of close
examination of the proposed budget, "I can't find any more
significant cuts to make a difference." Since the expanded
Council took office 18 months ago "we've made too much
progress to start going backward," he said.
Penrose Hollins said that, as
a result of the budget presentations "we know exactly what
the financial picture of New Castle County is." Failure to
enact the budget and tax increase would only delay the
inevitable and would be "a disservice to the people of the
county."
Sheldon said he voted against
the tax increase because that was the direction he received
from all 13 civic associations in his district whose
meetings he attends.
Powell said she opposed it
because her district, which includes about half of the area
south of the Chesapeake & Delaware Canal, have not received
a commensurate portion of county services. "Folks I
represent have paid taxes for a number of years to support
the north [part] of the county," she said.
William Bell, who also has a
large constituency south of the canal, said he was satisfied
that "we have sorted through all the figures" and that,
although unpopular, the tax increase was justified during
the budget hearings.
Tansey said he was unwilling
to vote in favor of the budget or the tax increase until "we
have the guts to be able to make the hard cuts."
Council president Paul Clark
said he is convinced that residents of the county appreciate
the services that county government provides. He said the
additional cost -- which the administration has calculated
to amount to $16 for a 'typical' residential property -- is
not too much to pay "to have a cop or paramedic show up at
the door when you need them."