Homeowners in Sussex County can look forward to a slight tax cut this year, while Kent residents will get a tax hike if a proposal from the Milford School District is approved by the school board.
If the plan goes through, Kent residents would pay 7.61 cents per $100 of assessed value more this year, for a total tax of $124.22 for every $10,000 of a home’s assessed value, while Sussex residents would get a cut of 7.02 cents per $100, for a rate of $351.01 for every $10,000 assessed.
Part of the change due to the ongoing construction of two new schools in the district. A referendum for the project passed in 2007, but the district has continued to borrow money for the projects as work progresses, rather than taking out the entire sum at once.
“We try to phase it in as needed, rather than dumping a tax increase on our families before we’ve even sold those bonds,” District Director of Finance Mark Dufendach said.
What makes homeowners on one bank of the Mispillion get a tax cut while the other side gets a tax hike is the arcane structure of tax assessment in Delaware’s county government.
School districts get their local funding from property taxes. Dufendach said Milford’s target is to collect $423 a year for a $175,000 home — a 0.24 percent tax rate — but making that happen is a job in itself.
It’s up to the county governments to keep records of how much each property is worth, and school districts use those numbers use to calculate who owes what. But neither Kent nor Sussex has conducted a new assessment in over 20 years. Somebody who owns a $175,000 house could look at the Sussex County records and find it listed at $17,500, Dufendach said.
On its own, that wouldn’t be so bad. If every home on the rolls was valued at a tenth of its actual price, the district could adjust the tax rate to make up for it. But each county’s figures are off by a different amount. It’s been 35 years since Sussex County’s last assessment, but 23 years since Kent’s.
That $175,000 house might have been worth $17,500 in 1974, but in 1986 its price would be closer to $50,000.
Taxing both counties at the same rate would mean that either Kent homeowners would pay too little or Sussex homeowners would pay too much. So every year the district has two tax rates – one for Kent homes and one for Sussex. And by state law, they have to make those rates as fair as possible.
The University of Delaware does an annual study of the homes sold in both counties, and compares the market prices with the numbers in the county records. From there, they come up with a formula to convert Sussex and Kent values to 2009 dollars, and the district sets its rates accordingly.
“Unfortunately, we have this every year,” Dufendach said. “We have to use that ratio to set and re-set our tax rates.”
Milford, Del. —
