After Councilman Matt Lloyd initiated discussion on a two-tier tax system, where permanent residents of Sussex County would get a tax break, I heard the owners of second homes crying foul, saying they pay for the infrastructure, but do not use it yearlong. I understand their argument. Here are my perspectives:
• The infrastructure must be prepared for the peak time when second-home owners and vacationers are all here spiking demand, even though the excess capacity will remain idle during the rest of the year. The issue is the infrastructure improvement/expansion cost may grow at a steady, gradual pace until it hits the saturation point. For example, if the threshold of nearing the maximum capacity of the current infrastructure is reached, and it becomes necessary to find new sources for power or drinking water, or explore new waste treatment options, widen an environmentally sensitive bridge to accommodate additional travel lanes, build a new fire/EMS station, or upgrade the computer systems, etc., improvement costs can skyrocket, and the burden of the expansion will be passed on to all residents
• Non-permanent residents do not contribute to the local economy as the permanent residents do on a regular basis
• Their vacant, underutilized homes aggravate the affordable housing crisis by taking up the housing stock, which possibly drives up housing prices
• Permanent residents are counted in the decennial census, which is used to allocate Senate seats. If second-home owners had been registered as permanent residents in 2020, we could have very well ended up with another House seat by now, which is a huge step up for Delaware – from one House seat to two seats! So, non-permanent residents do not help or participate in Delaware's representation to the federal government. This may affect federal grants and other programs.
I have to say that this will not make much difference in the county's revenue because the disparity in tax will apply only to 10% of the whole property tax since it does not apply to the school tax portion, which is 90% of the property tax.
It was intriguing that the young, 30-year-old councilman, who I'd think would have some higher political aspirations, made a bold and risky motion of a moratorium on large-scale subdivisions soon after getting on council in January. So, I am watching and listening to what is on his mind and where he is inspired to take us in the future.
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