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Judge Allows Wilmington to Join Lawsuit Against New Castle County to Force a Property Tax Reassessment

Post Date:03/01/2019 3:00 PM

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

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A Chancery Court Judge today ruled that the City of Wilmington is permitted to join a lawsuit filed last year by the Community Legal Aid Society, Inc. (CLASI) and the American Civil Liberties Union of Delaware (ACLU) against the New Castle County Government. Wilmington Mayor Mike Purzycki said Wilmington supports the Plaintiffs’ claims against the County in that court case and also sought the court’s approval to file its own claims against the County requesting that the court order the County government to conduct a county-wide property reassessment. Mayor Purzycki says the County has ignored its obligation for 36 years. The Mayor was a Member of New Castle County Council in 1983 when the County last decided to reassess properties.

“I am very pleased that the Court has allowed the City to participate in the ongoing lawsuit and to present its claims related to the County’s failure for nearly four decades to carry out a reassessment of property values,” said Mayor Purzycki. “All property owners—city and county—have been left to deal with outdated, unreliable and inaccurately assessed values which harm property owners. This has also affected the City government’s ability to effectively and fairly administer its own property tax system.”

In asking the court to allow it to become part of the lawsuit against the County, the City made the following points: 

  • 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 ability 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.

Now that the Court of Chancery has permitted the City to participate in the ongoing lawsuit, Wilmington will seek declaratory and injunctive relief against the County government. The City’s proposed 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 will ask the Chancery 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 issue an order compelling the County to immediately perform a countywide general reassessment under the supervision of the Court of Chancery.

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