Growth funds and reassessment: Let’s have a discussion
When one discusses economic development, there are many factors that need to be considered in answering the challenges with creating an environment in which the economic health of an area like Sussex County can flourish. Almost a year ago, the Sussex Economic Development Action Committee made a couple of suggestions that went to the heart of our efforts to provide the ideas to create the opportunity for Sussex County to grow properly.
One of those ideas was a method for growth that would allow it to pay for itself, a so-called growth fund to pay for infrastructure. I know the idea had merit, as I was asked to speak to both Democratic and Republican organizations. Time marches on, yet nothing has happened with this positive idea. The success in both Middletown and Bridgeville can be attributed to communities that understood that one must be ready when opportunity knocks.
Infrastructure was built and put in place to answer the call when it came. If you are ready, that call will come. Millsboro has taken steps to be ready when its time comes as testified by the number of success stories already in place. A growth fund created from revenues that come from existing growth is one idea. Let’s explore it before we just throw it aside.
High taxes are never conducive to economic development. Sussex County Council, from 1973 on, has maintained a low tax rate while continuing to fund all services required by the law. Back in 1973, property taxes in the county were responsible for funding 79 percent of the county’s budget; by the early ‘80s, that number had dropped to 29 percent, and that was without a transfer tax.
The county continues to this day to avoid the use of property taxes as the main source of its revenue. But there are clouds on the horizon. A court challenge to the county’s assessment methods has been filed and all indications are that the court will move to require that all three counties do a reassessment. Assessments for tax purposes are supposed to be fair for every property owner. The court appears to think that they are not.
We do not agree. Let us suggest some points that are not being made. Why am I comfortable doing this? I did the last county reassessment.
First, who is going to pay for reassessment? Back in the ‘70s, Sussex paid $3 million to reassess 100,000 properties. Today, Sussex has over 250,000 properties.
That cost today could be $20 million, and, if you consider all three counties, that cost would approach, if not exceed, $50 million. Who pays?
Second, Sussex County had 6,000 appeals back in the 70s. Using the same percentage for the present, that could be 42,500 appeals.
Third, we were told by the YOH people, the company who did the reassessment, that, after you adjust your tax rate, one third of the property owners would pay more, one-third would pay less and one-third would pay the same.
What a crock! Everybody will pay more. And guess who will see the greatest increase? It was and will be the older properties. The newer properties are being assessed at a higher level now. Their taxes will still be more than they are paying now, but they will not increase at the percentage that older properties will.
Why, you ask? Under the law, the county will be able to adjust the existing tax stream by 15 percent, while the school districts can adjust their collections by 10 percent.
Fourth, the traditional method of assessing properties is out of sync with reality. Rep. Pete Schwartzkopf made this a point at a recent constituents meeting. If reassessment does occur, a reordering of the assessment program of all three counties is essential. Here we go with cost again!
Our present method of funding education sets the state up as the majority source of funding.
Over the years the state, because of the ups and downs in the economy, raided the revenue originally used for the schools.
Equalization funding is in need of immediate review and correction so that the word “equalization” truly means “equalization.” Teaching units must be used as they were intended, not to create additional administrative positions. A county-wide school district should be given a more equitable evaluation.
Finally, the state can no longer continue to give a blanket $400 senior citizen school tax exemption to all who reach the proper age and have been here so many years as to be eligible for this reduction. It must be “means tested” so that it only helps people who need it, not people like me.
There are other steps that municipalities the counties and the state need to take, but raising taxes without considering adjustments to existing programs is not going to get us the businesses that will provide the jobs and salaries that will keep our young people here.
Joe Conaway heads up the Sussex Economic Development Action Committee.