It should come as no surprise that landlords and hotel owners in New Castle County have pushed back against the recent decision to shift the property tax burden in their direction. (Click here for theSpotlight Delaware story).
Earlier this month, a lawsuit was filed, citing, among other things, the lack of an appeals process and the likelihood that renters will bear the brunt of a larger school tax burden.
The General Assembly set things in motion by allowing school districts to shift the property tax burden away from homeowners whose protests touched off the rare legislative special session.
The disparity in tax payments was partially triggered by residential property appreciating at a more rapid rate than business holdings.
We already know that some office properties have declined in value based on recent sales and other reports. Hotels have seen similar issues, with only a few new properties coming online in a soft market.
Apartments are a mixed bag. Rents have risen in a tight market and some complexes have fetched high sales prices. Other landlords will struggle in making needed upgrades and making their mortgage payments.
At the end of this month, a legislative panel will hold hearings on the reassessment process and the role played by Tyler Technologies. Whether it sheds any light on the reasons for the current mess remains to be seen.
One question that comes to mind is whether county officials and the General Assembly were aware of the shift in property values from business to residential properties that had been occurring during a "deindustrialization" of New Castle County..
After all, the county has lost two auto plants and a steel mill over the past couple of decades, not to mention the long-running dismantling of DuPont Co.
Whether Amazon's distribution centers, which have been sold at impressively high prices, are correctly valued is yet another question.
Ultimately, a succession of New Castle County councils and county executives share the blame for failing to order a reassessment over a four-decade period or failing to devise a better method for valuing properties.
I’ll leave the question of the lawsuit centered on school funding inequities that led the reassessment for another day.- Doug Rainey, Chief Content Officer.
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