School Funding Suit Prompts Delaware Property Reassessments

DOVER, Del. (AP) — Officials in Delaware’s southernmost county have agreed to reassess property values for the first time in nearly half a century to settle a lawsuit over school funding and woefully outdated property assessments.

The Sussex County Council voted Tuesday to enter a settlement agreement with plaintiffs who sued the state and all three county governments in 2018. Under the agreement, the county will begin a reassessment process that will result in new property valuations by mid-2024.

Officials in New Castle and Kent counties also have reached settlements in the lawsuit by agreeing to conduct their own countywide property reassessments.

Meanwhile, state officials settled with the plaintiffs last year by promising to provide tens of millions of dollars in new funding aimed at improving academic performance among “disadvantaged students,” a definition that includes low-income students, students whose first language is not English, and students with disabilities.

The lawsuit, filed by the American Civil Liberties Union and Community Legal Aid Society, alleged that Delaware was failing to provide adequate educational opportunities for disadvantaged students, and that school property tax collections based on outdated assessments were partially to blame for the lack of funding.

Property taxes are a key funding component for school districts, but state law doesn’t require reassessments on any particular schedule. Kent County in central Delaware last reassessed property values in 1987, while northern New Castle County’s current assessment dates to 1983. Sussex County, home to million-dollar beach homes, last reassessed properties in 1974.

A Delaware Chancery Court judge ruled last year that the county assessment schemes violated a constitutional requirement that properties be taxed uniformly, and a state law requiring that property be assessed at “its true value in money.” The Delaware Supreme Court has interpreted that to mean present fair market value.

Following that ruling, Democrat Gov. John Carney pledged to seek more money from the legislature for disadvantaged students, and the counties agreed to conduct reassessments.

“This is not a decision today that we take lightly, nor is it one that we frankly welcome. This will have real implications for every property owner in Sussex County and across the state,” Sussex County Council President Michael Vincent said in a prepared statement Tuesday. “Unfortunately, the court did not rule in our favor, and while we may disagree with the outcome that now ties our collective hands, the reality is our options moving forward were limited.”

Last month, the state Senate approved a bill mandating that weighted funding for disadvantaged school students become a permanent fixture in the state budget, which was one of the requirements in the state’s settlement agreement with the plaintiffs.

The bill, which is awaiting a floor vote in the House, codifies the so-called Opportunity Funding that Carney’s administration first proposed a couple of years ago after the lawsuit was filed.

The settlement agreement required Carney to propose budgets for next year and the following year that include at least $35 million for disadvantaged students. He is required to seek appropriations of at least $50 million for the 2023-2024 school year and $60 million for the 2024-2025 school year.

The bill approved by the Senate makes the funding permanent and calls for at least $60 million in annual expenditures after the 2025 fiscal year.