Dear Governor Meyer and Members of the General Assembly,
In 2024, New Castle County completed its first full property reassessment in over four decades, a court-ordered process meant to restore fairness and transparency to the tax system. Yet rather than relief, many residents were met with confusion, frustration, and sticker shock, particularly over increased school tax bills.
Much of this public unrest stems not from the reassessment process itself, but from long-standing flaws in Delaware’s property tax and education funding systems. These structural issues, rooted in outdated laws, inequitable funding models, drastically shifting commercial and residential property values and state-level preemptions, have created a situation where tax burdens fall heavily on those least able to pay, while counties are blamed for policies they don’t control.
It’s time to move past scapegoating and seize this moment to enact the bold, equitable reforms Delaware has needed for more than 50 years.
What the Reassessment Did, and Didn’t Do
Reassessment, by law, does not increase the total revenue collected by New Castle County. Instead, it redistributes the tax burden based on updated market values. Properties that were undervalued under the 1983 system, especially suburban homes and rural residences, have seen increases. Meanwhile, some commercial and industrial parcels, particularly office and retail properties, have seen much smaller increases in value due to market shifts like remote work and vacancies.
The goal was fairness and accuracy, not revenue growth. Indeed, the County was required to reduce its tax rate following reassessment to remain revenue-neutral.
Yes, some individual assessments may need correction. With over 200,000 parcels assessed, approximately 5,000 appeals have been filed, about 2–3% of all properties. These appeals are part of the process, not proof of systemic failure. A functioning system must allow for due process, and this one does.
The Big Issue: School Taxes and State Policy
While County property tax rates dropped post-reassessment, school taxes, now comprising about 80% of the average property tax bill, often rose. That’s because school districts, under state law, were permitted to raise local tax collections by up to 10% after reassessment without a referendum. Counties have no control over this process.
To be clear:
- Counties don’t set school tax rates.
- Counties can’t alter or forgive school tax bills or penalties.
- Counties are required by law to collect school taxes on behalf of districts.
This legal framework, districts set taxes, counties collect them, has fueled public misunderstanding.
Decades of Consensus, Time for Action
For more than five decades, commissions, consultants, task forces, and court cases have pointed to the same structural flaws: an overreliance on local property taxes for education funding, a failure to target funds based on student need, and a lack of transparency in how dollars are distributed and used.
A Timeline of Reform Efforts
1978–1980: Governor’s School Finance Task Force
Recommended shifting more responsibility to the state to reduce inequities between property-rich and property-poor districts. The proposal was not adopted.
2001: Augenblick & Myers Cost Study
Found that Delaware’s “unit count” funding model ignored key student characteristics like poverty, English learner status, or disabilities. Recommended a weighted student funding approach to align dollars with student needs. Not implemented.
2008: Vision 2015 Initiative
A public-private partnership emphasized student-based funding, early childhood investment, and accountability. While influential, its most ambitious proposals were shelved during the Great Recession.
2015–2016: Wilmington Education Improvement Commission (WEIC)
Proposed bold reforms to address chronic underfunding in Wilmington, including realignment of district boundaries and new funding formulas. Approved by the State Board of Education, but ultimately blocked by the General Assembly.
2018: American Institutes for Research (AIR) Report
Reinforced the call for weighted funding and emphasized the volatility and inequity caused by Delaware’s heavy reliance on local referenda. Recommended greater transparency and accountability.
2020: Delawareans for Educational Opportunity v. Carney Settlement
Resulted in $60 million in Opportunity Funding for high-need students and created the Equity Ombudsperson role. While a step forward, this was a legal settlement, not permanent policy reform.
2022–Present: Redding Consortium for Educational Equity
Named after civil rights leader Louis L. Redding, the Consortium has renewed calls for sustainable funding for disadvantaged students and a statewide transition to a needs-based model. These proposals remain under consideration but are not yet law.
Despite decades of consensus, Delaware still lacks a weighted student funding formula. School districts remain heavily dependent on the strength of their local property tax base, and the willingness of voters to pass referenda. That means some children’s educational futures are determined not by their needs, but by their zip code and political circumstances.
The Growth Paradox: State Preemption, Local Consequences
Compounding these challenges is Delaware’s statutory preemption of local authority to manage school concurrency. New Castle County is legally barred from slowing or denying residential development, even in areas with overcrowded schools, if a developer pays the Voluntary School Assessment (VSA). Codified in 9 Del. C. § 2661(4), this law prohibits tying development approvals to school capacity.
The VSA, administered by the Department of Education, covers only a fraction of the costs for new schools or classroom expansions. In high-growth districts like Appoquinimink, this disconnect results in new developments fueling overcrowding while taxpayers shoulder the costs of expansion through higher school taxes.
The result is a vicious cycle: new homes strain schools, inadequate VSA revenue leaves gaps, districts raise taxes via referenda, and property owners pay the price. Meanwhile, the County is blamed, despite having neither the authority nor the tools to address the root causes.
What Reassessment Revealed and Why it Matters
The reassessment has exposed uncomfortable truths. Lower-income and moderate-value homes, especially in fast-appreciating neighborhoods, often saw large increases. The process uncovered major shifts in property values, particularly between residential and commercial classes. On average, all property types saw substantial increases in assessed value, about 353% overall. However, residential property values rose even more sharply, increasing by 433%, while commercial properties rose by an average of just 173%. This imbalance reflects market dynamics that accelerated during and after the COVID-19 pandemic, including surging demand for suburban and single-family housing. In response, both New Castle County and the City of Wilmington implemented separate tax rates for residential and commercial properties to mitigate the impact. Commercial parcels, which haven’t always kept pace in market value, sometimes saw reductions. These are not errors; they are the outcome of applying modern, market-based valuations to a system that hadn’t been updated in four decades.
Blaming the reassessment for these outcomes distracts from the real issue: an outdated and inequitable tax and education funding system.
Cherry-picking examples of commercial properties that saw reductions may feel satisfying, but it’s not sound policy. It’s a policy position disguised as critique, one that ignores legal requirements for uniformity and constitutional fairness. If we want progressive taxation, it should be pursued via income or gross receipts taxes, not through unequal property assessments.
Solutions: What We Should Consider Now
The reassessment was a necessary first step. What’s needed now is meaningful, systemic reform. Policy options that could be considered:
For Education Funding:
- Adopt a Weighted Student Funding Formula – Reflect student needs like poverty, English proficiency, and disability.
- Reform Equalization Aid – Provide stronger state support to property-poor districts.
- Modify or Replace the Referendum System – Explore automatic inflation indexing or state-funded baselines.
- Broaden the Revenue Base – Use tools like education surcharges or income tax adjustments for high earners.
For Tax Equity and Growth Management:
- Repeal 9 Del. C. § 2661(4) – Restore local control over school concurrency in development decisions.
- Eliminate the 10% Post-Reassessment School Tax Increase Allowance – Require referenda or stronger justification.
- Expand Homestead Exemptions and Circuit Breakers – Protect seniors and low-income households.
- Allow Property Tax Deferrals for Income Eligible Seniors – Enable payment of increased taxes upon property sale, based on means testing for eligibility.
- Cap Annual Property Tax Increases – Stabilize taxes in fast-changing neighborhoods.
- Consider Split-Rate or Tiered Taxation – Target underutilized land or high-value parcels without harming small businesses.
Time for Bold and Equitable Action
The 2024 reassessment was not the problem; it was a mirror. It revealed how outdated our property tax and school funding structures have become. It surfaced decades of inaction and policy avoidance. And it gave us a clear mandate: fix what’s broken.
Now is the time to act. We must resist the short-sighted impulse to blame the reassessment itself, pursue costly and ineffective audits, or deflect attention from the deeper issue, a broken and outdated system. The time for finger-pointing has passed. We need to shift the conversation from assigning blame to advancing real solutions, from court-mandated fixes to proactive, forward-looking leadership. Delaware doesn’t suffer from a lack of research or viable policy ideas, it suffers from a lack of both political will and thought leadership to implement them.
Let’s change that. Let’s modernize our tax system, reform school funding, and build a structure that reflects our values: equity, transparency, and opportunity for every Delaware student and taxpayer.
I respectfully urge you to make these issues a central part of your deliberations, both in the Governor’s Office and starting at the upcoming Special Session of the General Assembly on August 12, 2025.
I look forward to working collaboratively with you to address these long-standing challenges and to advance solutions that serve all Delawareans with fairness, foresight, and equity.
Sincerely,
Councilman David Carter, PhD