Carney Looking to Raise Property Taxes, More Coffee Klatches
Instead of raising income taxes on the far richest in Delaware and those that can afford it, Carney is looking at raising property taxes. Do both, sir, do both.
“Here’s the way I look at taxes: they ought to be fair; they ought to be simple; they ought to generate revenue; and they ought to enable us, as a state, to be more competitive,” he said. “[That’s where] we are too competitive. People move to our state because our property taxes are so low. I hear people who’ve moved here from Pennsylvania, from New Jersey, from New York: ‘I got a bill and I thought it was a quarterly or monthly payment.’ But that’s their payment for the year.”
I love the “I hear people who’ve moved here …” very Trumpian.
Anywho, more Coffee Klatches are upcoming.
6:00 p.m. – March 8 – Carlisle Fire Hall, Milford, hosted by Senator Gary Simpson and Representatives Harvey Kenton, William Outten, Charles Postles, and David Wilson
7:00 p.m. – March 16 – Thomas McKean High School, Wilmington, hosted by Representatives Deborah Hudson, Joseph Miro and Mike Ramone
8:00 a.m. – April 5 – Caffé Gelato, Newark, hosted by Representative Paul Baumbach
6:00 p.m. – April 10 – Delaware State Police: Troop 3, Camden, hosted by Representative Lyndon Yearick
7:30 a.m. – April 11 – ChesDel Restaurant, Middletown, hosted by Representative Kevin Hensley
7:30 p.m. – April 26 – Rose Hill Community Center, New Castle, hosted by Senator Margaret Rose Henry and Representative J.J. Johnson
The governor can’t raise property taxes. Property tax is a county matter, not a state matter.
That said,state budget cuts can force the counties’s hands to raise their own property taxes. If counties do the right thing and reassess first, the results could be pleasantly progressive.
What puck said.
REASSESS PROPERTIES. *THAT* is a statewide issue. How do I make this font size bigger?
REASSESS PROPERTIES!
I thought counties were responsible for assessments. Does the GA have a role in reassessment?
People also move out of our state to pay 10x’s the property tax to get a fucking decent public education
Besides the lack of political will, I remember hearing that the cost of doing a reassessment was huge. Does anybody know the logistics/ process on that?
“The governor can’t raise property taxes. Property tax is a county matter, not a state matter.”
The General Assembly can institute a statewide property tax, and repeatedly has been asked to do so by DelTech, for the exclusive benefit of DelTech. If such a tax instead went to public education it would be justified, but it won’t happen because the GOP is funded by land-rich, cash-poor descendants of several wealthy families, most related to the du Ponts, and taxation legislation requires a supermajority vote (the minority rules!).
Instituting a statewide property tax would be a prod for the counties to live up to their legal obligations to reassess, which they have ignored without penalty for three decades.
The property tax option is a good one but agreed both need to be done. We need new tax brackets for sure. Also because the general assembly continuously fails to pass that legislation the only option is actually to take this to court. (per Dave Sokala at a coffee talk)
“The General Assembly can institute a statewide property tax…”
I don’t think that’s what Carney means.
1st- property tax is a county function! 2nd- If they take more impact or RTT fees from the county= less Parks, and Library’s. 3rd- a reassessment can only increase taxes, no more than 7%. It was done before only on as a fairness issue.1/3 goes up ,1/3 stays the same ,1/3 goes down. How is that a big money maker? It will cost NCC $10,000,000 dollars and if it’s not state wide the other 2 counties have a big advantage. This was all presented at a community hearing at finance in NCC if someone questions this
I thought the deal was that a reassessment has to be budget neutral and can only be initiated by the state.
By itself, it doesn’t do much (except leveling a playing field that has been getting less level since the last reassessment). The Delaware of today looks VERY different from the Delaware of the late 70’s, real-estate-wise.
A statewide property tax (in addition to county and school-district) would probably be unpopular, but it does start to get at the aforementioned wealthy scions that pay 20% on their dividends while the rest of us pay double that for hard work.
Yes, our property tax is low, which is why we attract seniors, but our public schools are a mess, which is why younger people choose to live in PA or MD and commute in to Delaware (think Astra Zeneca). Delaware also has the 2nd highest foreclosure rate in the country and a middle class nearing extinction – so a statewide property tax will just push more middle class people under the line and possibly out on the streets, while not even causing a bead of sweat to trickle down a perfectly quaffed brow in our northern and southern Chateau countries.
The solutions are simple, if someone would have the political will:
1. Progressive income tax. Raise it another .2 at 150K, 250K, 350K etc. cap it at 10% (or not).
2. Means test the $500 senior school tax credit or eliminate it completely. The senior tax credit costs the state about $25 million a year, in 10 years it will be twice that.
3. Legalize and tax pot.
Problem solved, the middle class remains untouched unless they smoke pot, and the wealthy 1% takes more of the burden.
Just legalize Weed and get it over with.
Or you increase the state’s share of the real estate transfer tax, which essentially forces counties to increase property taxes to make up the difference. That way Carney and the General Assembly can say that they never actually raised property taxes, but they support the decision of counties to make that choice for themselves.
We have a wealthy tax base, why are we so fucking scared to tell them to pay their fair share? Meanwhile, what’s left of our middle class is struggling. We tax people making $60,000 the same as we tax people making $1,000,000 a year. Raise the income tax for people making over $100,000 a year, and put in steps all the way up the ladder. Let what’s left of the middle class recover and keep their homes. Stop being such a bunch of Reagan Republicans.
So, let me get this right. The GA wouldnt budge on cutting the Seniors school tax reduction but you’ll go and reassess those same seniors homes that are currently appraised at $47k and reassess it to $240k and the GA is all right with that. Yea, thats progressive thinking.
Destroying one of the reasons everyone moves here and likes living here.
Good plan.
The State most certainly can initiate a reassessment (statewide). Yes it would cost in the millions to complete, yes the reassessment must (by law) be revenue neutral, however, if you tie in rolling reassessments (say, every so many years, or whenever a property is sold) we won’t ever have this issue of property values being 40+ years out of date and that’s when revenues start to change.
I have a problem with Sussex Countians paying taxes on 50% of their property’s assessment value (which is in 1974 dollars). I also have a problem with NCC residents paying taxes on 1983 assessment values.
Reassess.
@ SussexAnon, know another reason that might attract (younger) people to move and live here? Strong public schools.
How about moderating one of the reasons everyone comes here to pay to fix the reasons everyone moves out or never comes in the first place.
I don’t understand why they can’t get a bit more from of all these transplant smucks moving into ugly plastic beige high density housing developments with houses that start at 300K?
A Transplant Tax?
Why not a progressive income tax? What is so repellent about a progressive income tax to Delaware progressives?
There are a lot of reasons young people move away from here. Lifestyle and career opportunities play a major factor.
Good luck selling “we’re doing this for the schools” to the masses. My school taxes have gone up several times in the last decade. Apparently for all the young people you seem to think are moving away.
Reassessment is political suicide.
@SussexAnon, your school taxes go up every year because the State continually shrinks their contributions to public education, which forces Districts to go out for referenda and ask for tax increases from their residents to make up for the difference. Rolling reassessment tied to a revamping of the funding system for schools addresses that.
I did not suggest “doing it for the schools” as the sole motivating factor. Though, find me a property owner that absolutely loves school tax referenda, and I’ll have them champion the way things currently work here.
The referendum were for more school construction due to the growing population here. It was not due to a change in the funding formula.
There are two types of referenda. Capital (for construction) and Operating (everything else). They are both generally run concurrently. You cannot build new schools to accommodate increasing enrollment without increasing the amount of money you have to operate your existing + new buildings. You’ll need more teachers, more supplies, more furniture, more energy, none of that is covered by Capital costs.
Captial referenda are very small tax increases (~ 1-5 cents per $100 assessed property value) because most of the funds are paid by the state. Operating referenda are typically > $0.30 per $100.
Operating referenda are what impact taxes the most. And Districts need to pass them with increasing frequency because the State can’t bring itself to ask the rich to pay more in taxes/legalize and tax marijuana/institute rolling property reassessments or any combination of those 3.
Agreed, a more progressive income tax is the second-most-obvious way to raise revenue (upping the franchise fee minimum on large corporations is first). Any statewide property tax would be in addition to, not instead of, other means of raising revenue. That includes legalized pot, but Delaware will move forward only if the feds change direction sharply.
@Puck: I know that’s not what Carney means. I’m just talking what might make some sense.
The transfer tax is a roundabout property tax, but obviously it leaves untouched people whose property has been in the family for generations. It also fluctuates with the pace of real estate sales, an irritating complication for budget planners.
The counties have kicked the reassessment can down the road so long it’s just a flat piece of dull metal. They won’t do it when times are flush, they won’t do it when times are lean, and the public doesn’t mind because a majority thinks they would lose the game, even though the odds are 2-1 in their favor that they won’t see a tax increase (in revenue-neutral situations, roughly 1/3 go up, 1/3 down and 1/3 stay the same).
The referenda were for new schools and the money to fund them.
I have yet to see a referendum in my district for more money due to a change in the formula.
Again, reassessment (especially periodic) is political suicide. This state can’t even raise the gas tax spread over YEARS without fear of reprisal. And now we are going to reassess and do it periodically? Yeah, that is politically feasible.
Want to know what isn’t “political suicide”? A progressive income tax. The Chamber may hate the idea but that slim percentage of people who it will hit won’t change the outcome of one damn election in Delaware.
@SussexAnon. The formula hasn’t changed. I don’t think I said it did.
Maybe I should clarify, districts up north need Operating Referenda more frequently because the broken formulas and frozen assessments direct more state money to southern districts. And when the state reduces the amounts it funds schools on the whole with, all districts feel the pain and so do property owners. We feel it faster up here in NCC.
Every time a district needs more staff it either directs money away from somewhere else in the district or it needs to ask residents to raise taxes.
So the progressive approach is to raise propert taxes on the middle class and those who can’t afford it because you talk out of both sides of your mouth.
We have more older transplants than young ones, because they like the lower income and property taxes.
Yet, one of our states largest expenses is Medicare which pays for the old people moving here.
To justify this if you have an out of state income you pay 10-12% in state income tax.
“So the progressive approach is to raise propert taxes on the middle class and those who can’t afford it because you talk out of both sides of your mouth.”
Do you not understand what “progressive income tax” is?
Taxes should promote savings , growth and investment. Taxes never produce the revenues claimed in the proposal.
You have to be a moron to not understand people make choices based on costs. Everything is a trade off.
“Taxes should promote savings , growth and investment. ”
Taxes should do no such thing. Taxes are necessary to fund the government. IN a capitalist system, government is not responsible for growth and investment.
You’d have to be a moron to not understand that people do NOT make every choice based on cost.
Taxation should also be used to encourage useful activities and discourage harmful activities, or at least to recoup some of their cost. Providing tax-based incentives is better than enacting strict legal bans or requirements.
The fact that taxes have the effect you cite is nice, but they’re not the priority. Taxation exists to raise revenue for the government.
Using the standard you cite — that they “should” be used for these purposes — perverts the process. If we really applied that standard, there would be no such thing as wage taxes, because they provide a disincentive to work.
It’s more on point to say that, having acknowledged that effect of taxes, we sometimes use them to curtail certain activities. Even with that in mind, we are not consistent — we tax alcohol, the most destructive drug, and try to ban pot, the least destructive.
We already use taxation to provide an incentive to hire, in that corporations are not taxed for labor expenses. This is an example of a good loophole. I never tire of pointing out that corporations can decrease their tax bill by hiring someone.
“I never tire of pointing out that corporations can decrease their tax bill by hiring someone.”
I would hope your point is that corporations don’t do anything specifically to avoid taxes. No corporation ever “creates” a job it doesn’t intend to profit from. Sometimes it miscalculates and loses money instead, but the intent is always exploitative.
That simple fact eludes so many wingnuts. When they claim that businesses will do this or that, move here or there because of taxes, you wonder how they could be so clueless.
“So the progressive approach is to raise property taxes on the middle class and those who can’t afford it”
NO! The “progressive”approach is to create higher tax brackets (for example a minimally higher .5% on earnings OVER $125,000 and .75% on earnings OVER $250,000 per year. Putting it more simply, a higher bracket for those individuals earning more than a quarter million dollars in taxable income in one year (after exemptions and any other loopholes have been utilized). I have previously introduced and will reintroduce that specific legislation as soon as we return to session. Last session that legislation successfully emerged from committee with bipartisan support but House leadership would not allow it to the floor for a vote of the full house. That “progressive” tax bracket legislation would have cost an individual earning $250,000 (a quarter million) in taxable income an additional $675 (six hundred and seventy five dollars) per year in taxes.
“Progressive” taxation is recovering some of the taxpayer funded corporate giveaways by raising the “franchise tax” cap enjoyed by the richest (minimal stock asset value of approximately $660 million) global conglomerates incorporated in Delaware by $60,000 per year. This would raise $108 million with no duress suffered by these multi-billion dollar corporations. I will be reintroducing this legislation once again this session.
“Progressive” taxation is not unfairly burdening those more fortunate with a disproportionate asking or taking. It is making sure that the necessary services provided by government (roads, police, education etc.) are adequately funded without any unintended harm to the economy, working people, and business community of Delaware. “Progressive” taxation policies promote economic growth and economic stability that are necessary to serve any civilized society and its citizens.
Representative John Kowalko
Good
Yeah. that deserves its own post.
Posting it would be fine with me. Exposing the insincere hand-wringing of both the right and left about the plight of those less fortunate than us might incite some necessary changes at the ballot box. The current message sent by Republicans, Corporations, and the Chamber of Commerce seems to be that the middle-class should bear a disproportionate share of of the cost of necessary government services while the wealthier corporations and individuals can avail themselves of the benefits. Unfortunately there are enough pseudo-progressive and corporatist Democrats in leadership who support such disparities or condone them by inaction.
Representative John Kowalko
I’ve been wanted to comment but JK’s words speak for themselves.
When I hear people snickering at Mr Kowalko or whispering behind his back I get very upset. He’s the only person I know in Dover with the moral courage to stand up and say what needs said.
Put this up as a post. Pin it. Keep it up there. Maybe add the report I linked to in the open thread.
Appeasing and incentivizing capital for 40 years is not working. Not working. Doing it more seems like a stupid idea. Stupid political bullshit. Cutting funding for schools seems like a bad idea. Because kids.
Going and getting a little extra cash from the people sucking wealth from the economy and hoarding it seems like the right idea, since we need money and they have almost all of it.
Doesn’t our Government realize that good jobs have left Delaware and people ARE NOT moving up. DO you want to completely destroy the Real Estate market by raising the transfer tax??
Maybe someone would realize it if you provided evidence it were true.
I want to see the correlation of real estate transfer tax rates to measurements of the real estate market.
I’ll wait. And feel free to use all caps on certain words and redundant punctuation. It really helps with the realization part.
Can we define what a “good job” is? As in “all the good jobs have left Delaware”?
What’s a “good” job?
“Good jobs” are the ones that provide enough income for you to buy the $400,000-and-up homes that Gloria likes to sell.
The only discussion of the transfer tax on this entire thread was Bane’s suggestion that the state take more of the existing 3% tax. There was no suggestion anywhere that the tax itself be raised.
Wonder no longer at why our political discourse is so fucked up. Gloria couldn’t even read a simple blog comment without getting it wrong.