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Chancery judge: Counties ‘manufacturing excuses’ over property tax fix

From Delaware Online

The judge overseeing a landmark property tax lawsuit said on Friday that he felt officials from the state’s three counties were “manufacturing excuses” in delaying a resolution to the litigation.

The parties all agree that resolution will be the reassessment of property values used to calculate property taxes statewide, values that Chancery Court Vice Chancellor J. Travis Laster ruled were unconstitutional earlier this year.

But the education activist plaintiffs that brought the suit and Laster disagree with the counties in the form and timing of how that reassessment occurs, according to testimony Friday during a status hearing regarding debate on how to fix the system.

The plaintiffs want the counties to end the litigation by agreeing to a four-year plan for reassessing property values, plans that each of the counties commissioned from experts and submitted to the court recently.

But attorneys for the counties on Friday asked the judge not to bind them to those plans and instead to put court proceedings on hold while they explore different ways to do a reassessment. That could include asking the General Assembly to approve laws to govern statewide reassessments in the future.

In response, Laster accused the counties of holding up a plan to fix the problem.

“My perception is that there’s been backsliding going on on the county side,” Laster said.

The disagreement means he will order another trial proceeding over how the court will require the counties fix the tax system, and a final plan for the reassessment may not be sorted out before March or April.

“I am disappointed in where we stand,” Laster said. “I don’t feel like things are going swimmingly.”

In May, he ruled that the lack of a reassessment coupled with the counties’ current methods of assessing property values creates a system unfair to the point it violates provisions in the state’s Constitution that require property owners to be taxed equally. He then put the litigation on hold for several months as the COVID-19 pandemic grew.

In October, each of the counties told Laster they were optimistic about reaching a settlement to finalize a plan for reassessment based on proposals created by reassessment experts that would ultimately yield changes to property tax bills in 2024.

It is unclear from the hearing testimony on Friday why the three counties’ position has changed since October.

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COVID won’t be the only job killer with this bill

Delaware lawmakers wasted no time preparing for the 2021 Legislative session after the election. One may think the priority would be to help Delaware businesses and workers recover from the impact of COVID—19. Unfortunately, you’d be mistaken, since one of the first bills being circulated is legislation that would actually do the exact opposite.

A draft of a bill to raise the minimum wage to $15 an hour by 2026—which would amount to a 61.6% increase—has been drafted and circulated for co-sponsorship. If you thought COVID took jobs and hurt our small businesses, just wait until this upcoming session.

The unintended consequences of raising the minimum wage have already been seen in New York, San Francisco, and Illinois. In San Francisco and New York, the restaurant industry has been hit especially hard by the measure, with many businesses raising prices (and losing customers), cutting hours, reducing staff, and some even filing for bankruptcy. When New York City’s minimum wage was raised to $15 per hour, there was an overall decline in restaurant workers, despite total employment increasing by more than 163,000 workers.

Owners tried raising menu prices and adding an extra surcharge to customers’ bills, but restaurants were no longer profitable. Many industries will face the same problem and their businesses will reduce worker hours or the number of workers, scale-back production, turn to automation, or shut down. Businesses want to pay their workers more, but government-mandated increases in wages hurt employment and the overall economy.

The Delaware restaurant industry has had a particularly tough time during the pandemic, and would be crushed by a mandate like a minimum wage increase for at least a few years. It took the First State six years to recover from the 2008 recession. Despite the numbers being far worse than twelve years ago, the new minimum wage would start in just one year.

Our small businesses and low-skill and low-income workers would have no chance, though one is desperately needed. When asked about this, Central Delaware Chamber of Commerce President Judy Diogo told Delaware Live, “It’s going to take [Delaware businesses] a couple of years to recuperate from [COVID—19]. They are not going to get over that in a year. So we need to give them some time to get past that, but we also do not believe the state’s government should be mandating wages.”

Business groups aren’t the only ones who understand this. Make no mistake, the very people pushing for $15 understand the consequences this mandate presents. When signing California’s $15 minimum wage into law, California Governor Jerry Brown said that “Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense.”

Feel good policy doesn’t always do good. In this case, it hurts the very people it claims to help: low-wage and low-skill workers, disabled workers, former inmates, and more. Prices will go up and goods will become too expensive for most and the new “livable wage” will no longer be livable. You cannot mandate a market shift.

Florida and Maine recently joined the list of places with a $15 minimum wage. Delaware shouldn’t join just to feel good. Our lawmakers in Dover must look at the real implications of their decisions and do what is truly best for Delawareans and Delaware businesses. Increasing the minimum wage in the midst of a pandemic that crippled the workforce and businesses alike is not in the best interest of anyone but themselves.

UD and DOJ present budget requests in unusual year

From Delaware State News

DOVER — While most of the country is caught up in the outcome of the presidential election, state government continues to function.
The Office of Management and Budget has begun its preliminary budget hearings for various state agencies and related entities, part of the annual process of crafting a budget proposal.
Working with his financial team, Gov. John Carney will unveil recommendations for a spending plan in January. That outline will look quite different from the one proposed at the beginning of this year, with COVID-19 causing revenues to dip, while creating new expenses.
Over the next week-and-a-half, various departments and related entities that rely on state funding, such as higher education institutions, will make their formal presentations to financial officials. These are being held remotely, a reminder of the ongoing pandemic.
The University of Delaware, which presented its request to budget officials Tuesday, projects a deficit of $228 million to $288 million for the fiscal year ending June 30. The institution has reduced discretionary spending, offered retirement packages to staff, cut salaries for some employees, reduced positions and pulled about $100 million from its approximately $1.64 billion endowment.
“The hard reality is that the financial difficulties facing UD — and all higher education institutions — are not a one-year event, and the road to recovery will extend over the next several years,” President Dr. Dennis Assanis said in prepared remarks. “We are already looking toward the challenges for (fiscal year 2022), including a reduced ability to recruit new students, a continuing need to increase student financial aid and the uncertainties of the economy and its effects on our students and their families.
“As you can see, to reduce our deficit we’ve tightened our belts, leaned on our endowment and even eliminated some of our core workforce. The university has very few cost-cutting options left to help us deal with the unprecedented challenges thrust upon us this year.”

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Documents show settlement is near for plan to finally reassess Delaware properties after decades

From Delaware Online

Officials from Delaware’s three counties are negotiating a lawsuit settlement that would see a multiyear process for reassessing the values used to tax individual properties up and down the state – a process that is likely to render widespread changes to residents’ and businesses’ tax bills in coming years.

Attorneys have told a judge they are working to settle, by the end of the year, a lawsuit that found the property valuations currently used by Delaware’s three counties to calculate tax bills to be unconstitutional, according to recent court transcripts and correspondence.

Newly revealed court documents shed light on the time frame and goals being contemplated by county leaders and the education activists who sued them over the local tax systems.

Each county has submitted reassessment planning proposals that outline a four-year process beginning in January for reassessing properties, according to court documents.

“Our goal is to have this done and have the reassessment baked into the bills by 2024,” New Castle County attorney Nicholas Brannick told a Chancery Court judge in a recent hearing.

Under each of the counties’ planning proposals – which are not final and subject to change – new tax bills would not be mailed before 2024. Residents, however, would be notified of new property values in 2023 and be allowed to appeal.

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