County now more dependent on property tax as other sources decline; deep slump in real-estate market makes realty transfer tax considerably less - Delaforum.com
New Castle County government has become more dependent on the property tax for financial support as other sources decline. Acting chief financial officer Ed Milowicki told a County Council budget hearing on Apr. 6 that the proposed fiscal 2010 operations budget anticipates the tax generating $106.4 million, or 65% of all revenue. That would be up from an anticipated $84.3 million, or 50%, this year. The deep slump in the real-estate market has made the realty transfer tax, which was relied upon heavily in previous years, considerably less of a contributor -- 9.4% of the total in fiscal 2010, versus 27% in fiscal 2006.
While there has been a noticeable pickup in real estate activity in recent weeks, he said it has mostly involved re-financings, which are not subject to the realty transfer tax. Also, he pointed out, first-time home buyers do not have to pay the tax regardless of how much the property costs. Tax-exempt property -- which amounts to 22.6% of all property based on assessments -- 'costs' county government $30.9 million in revenue not received. Council president Paul Clark questioned whether the health-provider exemption Christiana Care holds applies to profit-making structures financed largely by doctors on its hospital campus.
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