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Mayor Purzycki Seeks to Have Wilmington Join Lawsuit Against New Castle County to Force a Property Tax Reassessment

Post Date:01/22/2019 12:53 PM

  

County and City properties have not been reassessed by the County since 1983; Mayor says the current County assessment process is unconstitutional, unlawful and harmful to City property owners

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Wilmington Mayor Mike Purzycki announced today that the City of Wilmington has asked a Chancery Court judge to allow the City to join a lawsuit filed last year by attorneys from the Community Legal Aid Society, Inc. (CLASI) and the American Civil Liberties Union of Delaware (ACLU) against the New Castle County Government and other government officials. The Mayor said Wilmington supports the Plaintiffs’ arguments against the County in that previously-filed case and intends to assert its own arguments in support of its request that the court order the County government to conduct a county-wide property reassessment, an obligation Mayor Purzycki says the County has ignored for 36 years. The Mayor was a Member of New Castle County Council in 1983 when the County last decided to reassess properties.

“It is simply unacceptable that the County government has failed for nearly four decades to carry out a reassessment of property values,” said Mayor Purzycki. “Instead, all property owners are left to deal with outdated, unreliable and inaccurately assessed values that harm property owners as well as the City government’s ability to effectively and fairly administer its own property tax system.” The Mayor said the current property reassessment process being used by the County only worsens the situation for citizens and government and leads to wholly unfair decisions on property reassessments that have huge financial implications.

Mayor Purzycki said Wilmington made the following points today in its court filing:  

  • Property taxes, which are determined by assessed property values, are a major source of revenue from which the City and County provide services to the public;
  • The County’s failure to perform a general reassessment has had an irreparable and ongoing detrimental effect on the City’s need to raise revenue to fund City programs and services;
  • The County has a constitutional duty to uniformly assess all real property within its boundaries;
  • The County has a tainted history of an indefensible administration of its property tax system and acknowledges that its property tax system is inequitable;
  • The County’s failure to perform a general reassessment has caused other problems, such as a backlog of property tax assessment appeals awaiting a hearing before the County Board of Assessment Review.

Last year, the CLASI and the ACLU sued the State and County officials for failing to adequately fund educational opportunities for disadvantaged students. The Plaintiffs said, in part, that the failure to properly fund such programs was related to the County’s continual failure to produce updated property tax assessment rolls.

If permitted by the Court of Chancery to participate in the ongoing lawsuit, Wilmington intends to seek declaratory and injunctive relief against the County government. The City’s claims to the Court read in part: 

  • This action is filed out of necessity to ensure that the City’s residents and property owners are protected from unconstitutional and unlawful taxation, and to preserve and protect the stability of the City’s tax revenue from the County’s unconstitutional and unlawful conduct.  
  • The State of Delaware is the only state whose legislature or courts have not required the periodic and systematic reassessment of the current fair-market value of properties in its counties.  The County has failed to perform a general reassessment for over 35 years, which has caused assessed property values in the County—and by extension, the City—to become so unrelated to properties’ current fair-market values, and the property taxes paid thereon to become so unbalanced and disproportionate, as to violate the Delaware Constitution of 1897, as amended (the “Delaware Constitution”).  This failure contravenes the fundamental constitutional principles of fairness and uniformity in taxation, imposes an unfair tax on the City’s property owners, and directly harms the City’s ability to, among other things, effectively and fairly administer its own property tax system. 
  • The County’s reliance on the outdated, unreliable, and inaccurate assessed values of properties as of 1983 has created numerous self-inflicted difficulties in the County’s administration of its property tax system.  Included among these difficulties is an increasing number of unresolved taxpayer appeals that the County is no longer able to resolve in a manner which maintains uniformity in taxation – even with its attempts to relate current property values back to 1983. 
  • Because the Wilmington City Code, as authorized by specific enabling legislation in the Delaware Code, requires the City to utilize the County’s property tax assessment list, the County’s failure to uniformly assess properties has destabilized the City’s property tax revenue.  For example, in recent years, the assessment appeals of just a few commercial properties have resulted in the elimination of over $64 million of tax assessable value in the City and the loss of over $1.28 million of the City’s annual property tax revenue.  These amounts will increase if the County’s ongoing unlawful conduct of failing to uniformly assess properties is permitted to continue.

Wilmington is asking the Court to issue an order declaring that the County’s method of assessing property values as of 1983 for property tax purposes is unconstitutional and unlawful as applied, and an order compelling the County to immediately perform a countywide general reassessment under the supervision of the Court of Chancery.

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