The Cape Henlopen School District is looking to keep its tax rate the same as last year, at $0.1679 per $100 of assessed property value, according to a draft of the Fiscal Year 2027 tax rate proposal presented at a May 28 school board meeting.

"It's important to me at this point to make a recommendation to not raise taxes," Superintendent Jenny Nauman said. "I am not in favor of that, with the economy we have and the expenses our community is dealing with at this time."

The district tax is charged to all owners of property within the district. It is based on the assessed property value and is expressed in dollars and cents per $100 of assessed value.

The total tax is a compilation of four distinct tax rates:

• Current operating expenses, which provides revenue to cover operating costs like teaching materials, textbooks, insurance and local salary expenditures

• Tuition, which provides revenue to pay the tuition costs of Cape students who must attend special schools within and outside the state, such as the Sussex Consortium, the Delaware Early Childhood Center, intensive learning centers and other institutions

• Debt service, which provides revenue to pay principal and interest associated with bonds sold for major capital improvements, like new construction, additions and renovations

• Match tax, which allows districts to obtain local funding to work in concert with state funds for a common purpose.

There are currently five programs for which the state requires or allows a local match tax: minor capital improvements, technology, extra-time programs, elementary school reading resource teachers and middle school mathematics resource teachers.

While the district is not proposing to change its overall tax rate, it is looking to shift some of the allocations within the different categories.

It's looking to increase the tuition rate from $0.0522 in FY 2026 to $0.0611 in FY 2027 – an increase of $0.0089. At the same time, it's proposing a decrease in the debt service rate from $0.0171 to $0.0091 – a drop of $0.0080. It's also proposing a decrease in match tax/opportunity grant/mental health from $0.0008 to $0.0004 and a decrease in match tax/opportunity grant/ELL and low-income from $0.0018 to $0.0013 – collectively a decrease of $0.0009.

These categorical changes balance out to a net-zero change.

Slowdown in assessed growth

For years, the district had been seeing assessed growth of 3% to 4% consistently.

Over the last year, though, the rate dropped to 1.04%.

"We're still growing; we're just not growing at the rate that we are accustomed to, and we're not sure exactly why," said Oliver Gumbs, Cape's director of finance.

Gumbs and the district are working with the county to try to pinpoint the reason for the lag.

"When you drive around in our neighborhoods, it doesn't look like things are slowing down," Gumbs said.

But, he said, the county is looking at things like the number of building permits sold, which has drastically decreased since last year. Read more about that slowdown at tinyurl.com/yjeu8uyd. 

Every 1% in assessed growth equates to about $650,000 in county funding for the district, according to Nauman.

That means the district will be getting nearly $2 million less funding than in previous years.

As a result, Nauman said, they'll need to take a closer look at their spending and cut back in some areas – but not in a way that impacts the kids.

"It's really important to me to ensure that our students and our teachers don't feel [the cuts] in the classroom," Nauman said. "For me, it's cutting ancillary things. I still want class sizes to be small, I want kids to not feel any of our cuts, but we'll start thinking forward to, does this mean referendum? What is this going to mean in the future?"

Despite the decrease in funding coming in, Nauman remains steadfast on not raising taxes. The district will need to reassess its procedures and find other ways to make up for the loss, she said.

The May 28 meeting was the school board's first reading of the tax rate proposal. 

The board will discuss and possibly take action on it at its next organizational meeting, set for Thursday, July 9, at H.O. Brittingham Elementary School.

For a copy of the proposal, go to the May 28 agenda at cape-henlopen-schools.community.highbond.com/Portal/.