Subscriber First Name

If you’ve seen any news surrounding the County since March, you’ve probably heard that there’s a tax increase in the budget County Council is weighing right now, before it goes to a vote on May 26th.

As a member of the New Castle County Executive’s office for nine years, I’ve had a front row seat to the budgeting process, and it’s a challenging effort in years with sufficient funding. When cuts and tax increases become necessary, it’s all hands on deck. 

Council started budget hearings on April 18th, reviewing the budget requests for multiple departments each Thursday until their final hearing last week.

Not only have was I the only candidate running for a seat on County Council to attend each of these hearings – I was the only candidate to attend any of them.

I’ve made the time to be in Council chambers each week so I’m ready to lead on Day One. That means putting in the work now if we’re going to solve the cycle of deficits and tax increases that pop up every 7-8 years.

What’s in the budget?

Overall, this $387M budget cuts $18.5M in spending from last year’s budget, but is still $16M higher than last year. The increase is driven largely by increased healthcare costs, negotiated pay increases for County employees, impacts from tariffs and inflation and the addition of new police officers, paramedics and 911 telecommunicators in the Department of Public Safety.

The budget also includes a 17.2% increase to property taxes which, for the average homeowner in New Castle County, will result in about $9 extra per month and generate a projected $26M in additional revenue for the County.

The cuts to Community Services mean the cancellation of Sleep Under the Stars, Spring Festival at the Southern Park, Faerie Festival, the Rockwood and Glasgow Park Holiday Open Houses, and Summer Concert Series at Glasgow Park.

Library hours will also be reduced.

In total, 56 open jobs across County departments will be unfunded, with a heavy focus on cuts to part-time positions.

Where does County revenue come from?

Why is spending rising?

Since 2020, the average American household has experienced inflation at a rate near 28%, but because of the unique ways local governments spend money, the New Castle County Government has experienced inflation at a rate closer to 36%.

That means as employee healthcare costs, costs for fuel and vehicles, construction costs for sewer repairs, and even the costs of basic office supplies have increased, the revenues gained from the last tax increase passed in 2018 have been fully absorbed and reserves are now being used to cover the shortfall from revenue.

From 2022 to 2024, the County was able to shield property owners from much of this cost increase as federal funding from the American Rescue Plan Act (ARPA) allowed local governments to supplement their budgets with funding called “Replacement Revenue.”

This funding, though, came with an expiration date and had to be spent by June of 2024. That means the deficits these funds were covering now have to be addressed by increasing revenue and reducing costs.

The County chose to rely on reserves to close the gap for the budget passed last Spring, since reassessment had just been finalized and the County had committed to revenue neutrality. 

But even with the $18.5M cuts in this budget, and new revenue from the proposed tax increase, the County will still rely on funding from reserves to balance the budget again.

That means next year’s budget (the first I’ll be able to vote on as your next County Councilman) will need to identify additional revenue streams to continue closing the gap, restore the health of the County’s reserves and to bring back programs that have been cut.

Where can new revenue be found?

The County is dependent on the State Legislature for the ability to generate new revenue, as any changes to how the County levies taxes have to be approved through an amendment to the County’s charter.

The County could close some of the current budget gap if the State Legislature restored funding for mandated county programs and provided additional funding for services impacted by laws the State has passed in recent years.

For instance, the State mandates that the County provides paramedic services and used to cover 50% of the cost of that mandate. But that funding share fell to 15% back in 2018, and was only recently increased to 30% by Governor Matt Meyer in last year’s State budget. By restoring funding to the full 50%, the County would save roughly $6M each year.

Councilwoman Janet Kilpatrick and Councilman Kevin Caneco partnered last year on a resolution asking the State of Delaware to approve a charter amendment that would allow the County to levy taxes on marijuana sales. That revenue would have been used to offset the cost of calls for service from County paramedics and County police officers for marijuana-related issues. The State Legislature chose not to act on the resolution, but even sharing marijuana revenues collected by the State with local governments (instead of allowing them to levy their own taxes) would help defray the increased demand for public safety services that recreational marijuana sales have contributed to.

More broadly, reforms to the way property taxes are designated would also enable the County to better spread the property tax burden across property types to ensure that taxes are assessed fairly based on what a property actually is.

Right now, the County can only designate “residential” and “non-residential” property classes for tax purposes. But residential properties can take on different forms – single family homes, duplexes, townhouses, and farms. Non-residential properties can be anything from a grocery store to industrial complexes like the Delaware City Refinery, meaning your local daycare and an Amazon warehouse are treated the same in the tax code.

Giving the County greater latitude to designate tax rates for a broader range of property types and industries would do more to ensure properties are being taxed fairly and equitably, instead of the current two-sizes fit all approach. It would also give the County the ability to incentivize appropriate growth by tailoring taxes to meet the needs of our community.

Tough decisions will be coming when County Council votes not just on this budget, but on the next budget in 2027. We can’t continue to draw down reserves to make ends meet – this leaves the county too vulnerable if our country enters a recession, or some other economy-disrupting event occurs.

I’m ready to work with County Council’s partners in the State Legislature, Governor’s Office, and Executive Office to find answers to the County’s budget questions next year, and if elected I’ll make sure my constituents are a part of that process the whole way.

For now, I hope you’ll join me at the final town hall hosted by the County Executive’s Office at the Hockessin Fire Company’s Memorial Hall on Tuesday evening, May 19th, at 6pm.

County Council will vote on the proposed budget the following Tuesday night, May 26th, so this will be your last chance to ask questions and raise concerns before the vote.

I hope to see you there,