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3/21/2007
17 percent tax hike proposed for NCCo

Excerpt:

Councilman Robert Weiner, a Republican who voted against last year's 5 percent tax increase, agreed with Coons' approach.

He said he will hold public meetings to gather input from his constituents and see whether he can offer more ideas on how to trim costs.

"It is irresponsible for any member of this council to say they will not vote for this budget without presenting an alternate plan," he said. "I'm not going to be that council member."

17 percent tax hike proposed for NCCo
To pay deficit, average bill would rise $60

By ANGIE BASIOUNY, The News Journal
Updated Wednesday, March 21, 2007
New Castle County Executive Chris Coons says workers' salaries will be re-examined in labor negotiations.

WILMINGTON -- New Castle County Executive Chris Coons unveiled a spending plan Tuesday that calls for a 17.5 percent increase in property taxes during the next budget year, which begins July 1.

If County Council approves the hike, the average annual tax bill would rise by $60, from $342 to $402.

Coons said the increase is needed to help get the county's deficit under control. The tax increase would add nearly $12.3 million to county coffers.

That money, along with $14 million in spending cuts, would help the government dramatically shrink spending while keeping its core services -- including police, paramedics, code enforcement and sewers -- at acceptable levels.

"We have made in this budget all the cuts I think we can stand," Coons, a Democrat, told more than 150 people who packed the Louis L. Redding Building on French Street to hear his budget address.

"I will not go beyond that."

Several residents who listened to Coons' speech praised his plan as responsible, saying it tackles the county's monster deficit while minimizing the impact on taxpayers.

"For some people, the 17 percent will be difficult," said Gerri Thomas, treasurer of the Brennan Estates Maintenance Corp., which has 824 homes. "But when I look at tax structures across the country, it's still a prize here in New Castle County. I've got family in Princeton, N.J., who pay $9,000 in property taxes a year."

The proposed $228 million budget is $2 million less than the current year. It also is the first negative-growth budget in a decade.

Some of the cuts already have been enacted, such as a hiring freeze for all positions except public safety, elimination of nonemergency overtime, a pay freeze for 55 executive-branch employees and the canceling of popular community events such as the Rockwood Ice Cream Festival.

The proposal also includes:

- $2.8 million saved through elimination or defunding of 61 vacant positions. No layoffs.

- $4 million in new revenue through higher row-office, land-use and community services fees.

- A requested increase for contracted police service to Middletown and the neighborhood of Westover Hills, totaling nearly $1 million in new revenue.

- Spending increases on fixed costs, including $3.3 million for step raises and cost-of-living adjustments for employees, and $2.1 million for health care.

"This is a budget which has in it, frankly, something for everyone to dislike," Coons said, drawing chuckles from the crowd. "I am asking everyone to help solve our budget problem by recognizing that we have to live within our means."

Officials had projected the deficit would reach $47 million by 2009, which is the same year the county's $86 million in cash reserves would run out.

Under the proposed budget, the deficit would shrink to $15.7 million by 2009, and the reserves would last until 2011.

Constituents, council receptive

Marion Stewart, a longtime county watchdog and member of the Civic League For New Castle County, said she was "favorably impressed" by the plan and said the double-digit increase comes as no surprise.

"Chris has been spreading the word for two years now that we can't go on with expenditures increasing and revenues going flat," she said.

Steve Hess, president of Springfields Maintenance Corp., said he believes Coons is telling the truth about the county's finances. He said he's willing to pay an even higher tax increase if it means keeping more of the county's services intact.

"Why not 20 percent?" he said. "Look at the housing market right now. I'm sure the county is not getting its fair share of money."

The county's second-largest source of income, the real-estate transfer tax collected when homes are bought and sold, has declined sharply this year as the housing market has cooled. That revenue is projected to remain flat for the next few years.

Meanwhile, salaries, wages and benefits for the county's roughly 1,600 employees account for 75 percent of spending. Coons said he will press for a revised compensation plan when the county begins negotiations with its labor unions next year.

He also plans to ask the state Legislature for authority to enact a 911 cell phone fee that could generate $3 million a year; billing for paramedic services that could recover $1 million; and a 2 percent hotel surcharge that could provide $1.5 million a year.

Councilman Robert Weiner, a Republican who voted against last year's 5 percent tax increase, agreed with Coons' approach.

He said he will hold public meetings to gather input from his constituents and see whether he can offer more ideas on how to trim costs.

"It is irresponsible for any member of this council to say they will not vote for this budget without presenting an alternate plan," he said. "I'm not going to be that council member."

Democratic Councilman Timothy Sheldon, who also voted against last year's tax hike, said he was surprised at the amount of the proposed hike, which Coons kept under wraps until Tuesday night.

"I lost that pool," Sheldon said with a laugh. "I do understand the problems that we're having, and I'm willing to work with the county executive to see what we can do to keep cutting."

'I wish there was another way'

Coons said he also wants to pursue rolling reassessment of property values.

The county has not held a mass reassessment of property since 1983. The tax rate has been kept artificially low because all property is taxed on that year's standards, officials said.

But a change in state law would be needed before the county could capture a windfall from a reassessment.

Under state law, the county is required to roll back the tax rate after a reassessment so the revenue would be the same as the previous year.

Counties are allowed to capture 15 percent more money than the previous year, but that money must be used to cover the cost of a door-to-door assessment.

"We need to press for statewide rolling reassessment to address the unfairness of our property tax system," Coons said. "And we need to re-examine the equity of our current property tax exemption program that leaves low-income working families paying more than wealthy older residents."

The county's senior tax exemption, which is $50,000 for those older than 65 who qualify, helps cushion the impact of a tax increase for older residents. Their tax bill would rise an average of $18 a year, under the proposal.

"The elderly people are taken care of, to a degree," Stewart said. "The people who get hurt the most by the tax increase will be young working families. But even they shouldn't find it a horrible burden."

William Dunn, president of the Milltown Limestone Civic Alliance, said it's clear Coons has clamped down on government spending as much as he can.

"I wish there was another way," he said of the tax hike. "But I'm not necessarily convinced that there is."

The 13-member council will begin budget deliberations in April. Those meetings will be open to the public.

Council President Paul Clark, a Democrat who voted in favor of the tax increase last year, said he found Coons' presentation thorough. He said it's too early to say whether he would vote again for a hike.

Just like last year, he said, the council will comb through every detail of the budget and look for ways to reduce the bottom line even more.
Contact Angie Basiouny at 324-2796 or abasiouny@delawareonline.com.

NEW CASTLE COUNTY TAX RATE

Current rate: 47.7 cents per $100 of assessed value

Proposed rate: 56.1 cents per $100 of assessed value

Increase: 17 percent, or $60, for average tax bill (excluding senior exemption)

Example: Tax bill for $400,000 home would be $643 under the proposed increase.

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