VSA taxes Sussex County’s homebuyers

February 9, 2024

I have spoken out against establishing the Voluntary School Assessment now being imposed on the Sussex County Council by the Delaware Legislature. This tax is not voluntary and it is not an assessment. It is a tax and mandatory. You can call the VSA anything you want, but, at the end of the day, our local homebuyers will pay it.

I publicly made a challenge to the editorial board of this newspaper at a recent county council meeting to support fixing the broken school construction funding system instead of supporting taxing our homebuyers. Everyone knows the way the State of Delaware funds school construction is broken and has been broken for decades. Instead of picking up my challenge of fixing the problem, the editorial board choose to take the point of least resistance and endorse the concept of taxing our low-income and our middle-income homebuyers, crushing any hope of homeownership.

The current system doesn’t allow superintendents of school districts to plan for or build schools where and when they are needed. The archaic rules don’t allow it. This isn’t fair to our kids, our teachers or our superintendents.

I admit that the chance of the Legislature stepping up and fixing the school funding criterion is slim. However, I don't agree that we should throw in the towel. We should demand that our legislators change the process. Taxing people $15,000, plus or minus, per house is not the answer.

The VSA as proposed is a one-time tax. It is true that the tax will be imposed upon the developer, but the hitch is that builder will increase the purchase price of the house that a low- and middle-income buyer wishes to purchase, raising the amount of their mortgage and possibly pricing them out of the housing market altogether. To be clear, the tax will be passed directly to the homebuyer from the developer. The cost of producing goods is always passed along to the consumer.

The VSA excludes homebuyers of low-income dwellings that are state and federally subsidized. It also excludes homebuyers in 55-and-older communities who may be very likely to absorb this tax. This tax is a burden upon and crushes those that can’t afford it – the lower-middle class and middle class. To think that developers will be the ones to pay this tax without passing it on to the homebuyer is naïve. The cost of goods is always passed on to the consumer.

If this tax is implemented, it goes to the Department of Education in Dover. My experience as a lifelong Delawarean is that the money rarely comes back proportionally to Sussex County. A perfect example of this is the condition of our roads.

The Department of Education in Dover just denied building more classrooms in the Cape district, but it approved a new administration building to the tune of $80 million. I'm fairly confident that our schools in the Cape district are at or above capacity. We need classrooms, not new administration buildings. Our kids and our teachers deserve better. Furthermore, teachers’ pay isn't keeping up with inflation, but school administration in the state receives substantial increases in funding.

I am challenging our senators and representatives to step up and fix the problem. They have complete control. They can easily change school funding criteria, and we as taxpayers should demand it. If they like and support additional taxes, they can impose taxes at will. There is no reason to put Sussex County Council in a box. To be clear, building schools is the State of Delaware’s responsibility, not Sussex County Council’s. Taxing our middle and lower-middle classes out of the dream of homeownership is not the solution.

I have a grandson and nieces in the Cape Henlopen School District. I care deeply about our schools, students and teachers. I have always and will always support our kids and teachers as a citizen, taxpayer and public servant.

If anyone thinks this debilitating tax is the easy fix or that it will punish developers, they are mistaken. If it seems too good to be true, it probably is.

It’s very easy to tax citizens, but there are also consequences to these easy fixes. We need to fix the root problem. I don’t think anyone can disagree.

Mark Schaeffer represents the Third District on Sussex County Council. 
Editor’s note: According to Senate Bill 186, which gives Sussex County Council the authority to implement a Voluntary School Assessment, the fee would only be assessed to the developers of new major subdivisions with five or more homes. It would not apply to low-income housing or 55-plus communities, and is voluntary because developers have the option of donating to the district a piece of land at fair market value. A VSA would only apply to new construction. According to the Delaware Department of Education, VSA funds collected on behalf of a school district are deposited in an appropriation at DOE in the district’s name. DOE retains the funds on the district’s behalf, and the district is able to access its funds for a construction project upon approval from DOE, the Office of Management and Budget, the Controller General’s Office and the co-chairs of the Joint Committee on Capital Improvements. According to Cape Henlopen School District, the estimated cost to purchase a 103-acre parcel on Cedar Grove Road and the construction of a new administration building, indoor swimming pool and bus maintenance facility is about $83 million. At its Jan. 30 meeting, Sussex County Council decided to not move forward with creation of an ordinance to impose a VSA. 
  • Cape Gazette commentaries are written by readers whose occupations, education, community positions or demonstrated focus in particular areas offer an opportunity to expand our readership's understanding or awareness of issues of interest.

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