2025-08-10

August 10, 2025

Back on July 31, I published a presentation that covered my analysis of property value changes as a result of the first county-wide reassessment in over 40 years.  The big takeaway was that residential property values increased at a much higher rate than non-residential properties, leading to a dramatic shift in the overall tax burden that residential properties bear.

The state legislature is getting back together for a special session this week to try to solve the problems created by a lopsided shift in property value from commercial to residential properties.  I personally think that allowing school districts in New Castle County to have a separate non-residential rate (just like the county has) is the best short-term solution to the problem.  With a non-residential rate of around two times the residential rate, we can get the relative tax burden shifted somewhere near where it was last year.  There are bigger questions that need to be addressed by the legislature, but those should happen during normal session, with plenty of time for discussion, analysis, and debate.

While I agree that we should all work together to solve the problem at hand, part of that solution must be understanding how we got here in the first place.

New Castle County (as well as Kent and Sussex) have been using made-up property assessment values for decades.  This is obviously bad.  It is doubly bad because we use property taxes to partially fund our public schools.  Thus, richer school districts (those school districts with higher-value properties) have more money than poorer ones.  Children who happen to live in a more affluent part of the county go to schools with more money and more resources.

Back in 2020, the Delaware court of chancery decided that this was inequitable and required the counties to perform a full reassessment with regular periodic reassessments.

However, over a decade before that, the state legislature knew that we were in a bad place and had a committee formed to provide "recommendations to provide a mechanism for a fair and equitable reassessment of all real property" in Delaware.  That report outlined the obvious issues with not updating property values regularly, as well as discussing the kinds of issues that might arise after decades of not doing so.  It recommended annual reassessments (so as to not have these scary, unpredictable jumps in value), and it recommended slower roll-out periods for properties whose values increased dramatically.

So, in 2025, New Castle County wrapped up its reassessment project and noticed what I described last time: a shift in tax burden from commercial to residential properties.  They introduced a separate for commercial properties and called it a day.

Here's the thing: New Castle County knew that the vast majority of the property taxes that they collect are for the local school district.  They knew that the school districts could not set separate rates like they did.  They knew that this would crush many people.  And they did nothing.  This is a failure in governance and oversight on the part of New Castle County Council.  They should have known this in 2024 when looking at the interim results from the reassessment.  They certainly should have known this in early 2025.  And they definitely knew it in May of 2025 when they introduced their separate non-residential rate.  If they were doing their jobs instead of covering their asses, they should have immediately alerted both the school districts and the state legislature.  Back in early May, there were still essentially two months for state legislators to act on this information.  Back in early May, we could have created a solid, concrete plan instead of issuing bills and then calling for a special legislative session after receiving negative blowback.

And also: The General Assembly knew about the risks of a reassessment after so long.  They knew that it could be extremely painful to many people.  They had a report on all of this, along with recommendations for how to ease into a regular reassessment cadence without crushing people.  And yet they did nothing.  Reassessment had been in the news and in the public consciousness for all of 2024 and 2025; the state legislators could have been proactive instead of waiting around and hoping that nothing bad would happen.

And finally: both of these groups (the county council and state legislators) routinely dump all the blame on the local school districts.  "Don't blame me, your school board raised your taxes."  Fuck off.  Both of those groups get paid to do their governance jobs; your local school board gets paid $0 to take all that blame.  The state could fully fund its schools, but that would mean that a state legislator would have to raise taxes.  The county could cover the funding gap, but that would mean that a county councilperson would have to raise taxes.  That won't help their re-election campaigns.  New Castle County knew that the median homeowner would see their school taxes in Christina go up $600, and they did nothing about it.  They gave people our district's phone number to call.  They talk about running a lean government, but dump all of their tax-related issues on Christina.  We're supposed to be trying to teach kids, but now you want us to be experts in your county tax setup?  Well, we are now, and that's why we know that you screwed the people of New Castle County.  You knew about all of this well in advance, and you did nothing, hoping that the school boards would take the blame, letting us unpaid elected officials take a beating at our next elections while you sit back and look pretty.

There is no long-term solution that does not involve solving this problem: the state under-funds the school districts, allowing the county to collect property taxes issued by the school district to cover the difference.  The only group in that pipeline that actually raises property taxes for schools happens to be the only group that has no legislative power (the school board).  The state needs to step up its funding for public schools (starting with understanding how public school funding actually works), and the county needs to take ownership of the knowledge around property valuations and taxes.  Both legislative groups (state and county) need to work together with the school districts collaboratively instead of adversarially.  Maybe we should shift the tax burden onto residential homeowners; maybe we should assess commercial properties differently; maybe we should have different rates to ensure better equity in tax burden; maybe maybe maybe.  We won't get anywhere until we have serious conversations around school funding and how we want to pay for it.  Maybe we can start to do that today.

Sources and documents

This is the New Castle County ordinance establishing a separate non-residential rate on May 13, 2025.

This is the court of chancery opinion from May 8, 2020.

This is the report November 26, 2008, about providing fair and equitable reassessments.