Issue 538 - April 29, 2022
In This Issue:
  • Bill Would Eliminate Possible Unapproved School Property Tax Hikes
  • Living Donor Protection Act Signed into Law
  • Low-Income Tax Credit, A Second Inspector General Bill, Elected Official Residency
  • General Assembly Returns to Work on Tuesday
Bill Would Eliminate Possible Unapproved School Property Tax Hikes
A bill filed in the State House of Representatives this week would eliminate the potential for school property taxes to be raised statewide, without a referendum.

Early last year, Delaware’s three county governments agreed to reassess the value of all residential and commercial properties within their jurisdictions. The actions settled a lawsuit against the counties in which the plaintiffs -- Delawareans for Educational Opportunity and the Delaware NAACP -- had alleged that an outdated model for valuing property shortchanged Delaware students and public schools.

State law requires that property tax assessments be based on actual property values. The counties are charged with inspecting properties and adjusting valuations, but there is no policy establishing how often this expensive and controversial process must be done, making them reluctant to move ahead on their own initiative. As a result, Sussex County last assessed property values in 1974, New Castle County in 1983, and Kent County in 1987.

Under state law, reassessment is supposed to be done in a revenue-neutral fashion, with the tax rates reset so the same approximate total revenue is generated at the end of the process*.

However, one little-known aspect of the law is that it allows school districts to realize up to a 10% total revenue gain following reassessment.

“The intent of reassessment is to level the playing field and restore equity in property values and the taxes paid by property owners,” said State Rep. Mike Smith (R-Pike Creek Valley), the prime sponsor of a new bill that would eliminate the possibility that reassessment will produce a school revenue bonus.

“I have young children and I support getting schools all the funding required to do everything they need to do,” Rep. Smith said. “At the same time, we have a referendum process in this state, with schools needing citizen approval to raise taxes. The loophole in the current reassessment law essentially allows a significant tax hike to be imposed on Delawareans without their knowledge or consent, subverting the referendum process.”

Rep. Smith's bill (House Bill 389) would require that school districts collect the same total revenue after reassessment as they did the previous year.

In Delaware, the county governments collect property taxes for themselves and the public school districts. The majority of the revenue raised goes to the schools. For example, in Sussex County, approximately 10% of the typical residential property tax bill is county taxes, with the remaining 90% paying the local share of operating public schools.

The bill is pending consideration in the House Education Committee.

* Individual property owners will experience tax increases or decreases from reassessment, depending on valuation differences and the adjusted tax rates.
Living Donor Protection Act Signed into Law
Governor John Carney on Thursday signed Senate Bill 218, the Living Donor Protection Act, into law at Beebe Healthcare’s new specialty surgical hospital. 

The bipartisan legislation prohibits discrimination by insurance companies based on an individual’s status as a living organ or tissue donor.

“The Delaware General Assembly has done important work attempting to prevent discriminatory practices and this bill further protects Delawareans,” said State Sen. Ernesto B. López (R-Lewes), the prime sponsor of the bill. “Having to pay a higher rate for or even being denied insurance coverage because of one’s status as a living organ donor is wrong.” 

House Speaker Pete Schwartzkopf (D-Rehoboth Beach), who is a living organ donor and a sponsor of the legislation, noted the shortage of potential donors. "We need to be doing everything we can to encourage more people to be organ donors, not put up barriers. This law will tear down one of those barriers.” 

State Rep. Steve Smyk (R-Milton, Lewes), a co-prime sponsor of the measure in the House, echoed the Speaker's observations. “According to the United Network for Organ Sharing, there are currently more than 106,000 people in need of a lifesaving organ transplant," he said. "This number does not include those requiring less dire, but still important, donations. I am proud to be a part of this bipartisan initiative to help bridge this critical shortfall.” 

Delaware now joins at least 20 states, including Maryland and Pennsylvania, with similar statutes in place.

Among the other sponsors and co-sponsors of the bill are the following House Republicans: State Reps. Ruth Briggs King, Ron Gray, Kevin Hensley, Danny Short, Mike Smith, and Mike Ramone.

PHOTO CREDIT: Matthew Revel
Low-Income Tax Credit,
A Second Inspector General Bill,
Elected Official Residency
Establishing a Low-income Tax Credit
State Rep. Rich Collins is joining with State Sen. Gerald Hocker to sponsor a bill aimed at helping working, low-income Delawareans.
The new measure, House Bill 393, which was introduced this week, seeks to create a low-income tax credit. The proposal would allow Delaware residents earning less than $35,000 annually to claim a non-refundable tax credit of $280 against their income tax bills. This would be a one-time benefit, applying solely to the 2022 calendar year.
Rep. Collins said the bill is an issue of equity, giving working Delawareans earning modest incomes the same benefit already extended to those receiving unemployment benefits in 2021 (House Bill 285).

Among the other sponsors and co-sponsors on the bill are the following House Republicans: State Reps. Jesse Vanderwende, Mike Ramone, Ron Gray, Charles Postles, Ruth Briggs King, Bryan Shupe, Mike Smith, and Lyndon Yearick.

STATUS: Pending consideration in the House Revenue & Finance Committee.
Creating an Inspector General
A bill to create a Delaware Inspector General was filed this week -- the second such bill this year.

Sponsored by State Rep. John Kowalko (D-Newark), House Bill 405 seeks to establish the office that would be charged with investigating instances of "waste, fraud, abuse, mismanagement, corruption, or other conduct that is harmful to the public interest."

The measure was filed about a month after similar legislation, House Bill 370, was introduced by State Rep. Mike Smith (R-Pike Creek Valley).

Despite the bills' similarities, none of the sponsors of either measure appear on the other.

STATUS: Both bills are pending consideration in the House Administration Committee.
Ensuring Elected Officials Live with the People They Represent
A proposal that seeks to ensure state and county officeholders and candidates live in the communities they represent is expected to be debated by the House of Representatives on Tuesday.

House Bill 183, sponsored by State Rep. Kevin Hensley (R-Townsend, Odessa, Port Penn), seeks to create a process for verifying that an incumbent elected official or a candidate is a resident of the district or area they represent or seek to represent. The protocol called for by the legislation would require the signing of an affidavit and proof of the officeholder's or candidate's primary residence that would be filed with the Commissioner of Elections.

The act would not apply to municipalities.

Among the other sponsors and co-sponsors of the bill are the following House Republicans: State Reps. Rich Collins, Tim Dukes, Mike Ramone, Ron Gray, Ruth Briggs King, Danny Short, Mike Smith, and Lyndon Yearick.

A second bill filed this week is also concerned with the residency of elected officials.

House Bill 395 is a proposed constitutional amendment sponsored by State Rep. Paul Baumbach (D-Newark) that would require that state legislators remain domiciled in the districts they represent for the entirety of their terms of office. The act would not apply to sitting legislators who move to retain residency in their districts following reapportionment.

Among the other sponsors and co-sponsors on the bill are the following House Republicans: State Reps. Kevin Hensley, Danny Short, Mike Smith, and Lyndon Yearick.

STATUS: HB 183 is on the House Agenda for Tuesday, May 3. HB 395 is pending the consideration of the House Administration Committee.
General Assembly Returns to
Work on Tuesday
Following its two-week Easter Break, lawmakers return to the capitol to resume the legislative session on Tuesday. There are 21 legislative days remaining in the 2022 legislative session, which will conclude in the early morning hours of July 1.

To see the House Agenda for May 3, click here.

To see the Senate Agenda for May 3, click here.