Wilmington mayor: County is costing us 'alarming' amount of tax revenue

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Wilmington Mayor Mike Purzycki told city council the county's tax appeal process is being handled unfairly to the city. He was speaking at his budget proposal address Thursday, where he called for a moratorium on tax appeals. William Bretzger/The News Journal

Wilmington Mayor Mike Purzycki said in his budget address Thursday night that the city has been losing hundreds of thousands of dollars in tax revenue because New Castle County is "reassessing" property values and reducing the tax burden for some property owners. 

The city alleges it lost nearly $600,000 this fiscal year, and is set to lose as much again next year, because the county reached settlements with a dozen property owners who appealed their assessments, thereby reducing their tax bills. 

New Castle County hasn't done a county-wide property assessment since 1983. 

"Large commercial users are taking a look at their property and are saying: We've got vastly depreciated assets. We've got buildings that are empty and can't afford this, and it's unjust," Purzycki said. "You can sue the county... If you're a large building owner and your tax bill is $300,000, it's a pretty good bet to say, hey, here's $50,000 (in legal fees)."

The list of adjustments includes the DuPont Building, a parcel of which was assessed at $27.9 million and was reduced to $24 million, reducing its tax burden by $76,905, according to data provided by the mayor's office. 

The loss of revenue for the city is "alarming," according to Purzycki, who claims the county has not provided an explanation or documents to support its decisions.

"If we don't find a satisfactory appeals process that is fair to all city taxpayers, the city will bleed to death by a thousand cuts, or a thousand tax appeals," Purzycki said in his budget address. 

County Executive Matt Meyer said the county is just doing its job.

He disputed the idea that the county is "reassessing" anything. He said the county is fulfilling its duty to tackle a backlog of over 400 assessment appeals that were in place before he took office and that all appeal processes have occurred in a transparent way. 

"Any assertion or statement that we're assessing any properties in private or without including other governments is hogwash," Meyer said. "We’re doing this openly and honestly." 

Meyer said he wanted to make it a priority to tackle the appeals because property owners must continue paying their tax bills during the appeals process. If courts ultimately determine the county was overcharging, the government must give that money back, Meyer said, and he wanted to avoid that. 

Sometimes, it's a better deal for the county to settle an assessment dispute out of court than to engage in a long legal battle with a deep-pocketed entity, Meyer said. 

"None of this is a secret," he said. 

One new challenge is a 2016 Delaware Supreme Court decision that "made it easier for companies to challenge their assessments," Meyer said. 

"The problem with that decision is it throws the math that we use to assess properties based on 1983 values into a crazy place, into the twilight zone," he said. "There are companies that have taken advantage of that." 

The mayor said he wants a moratorium on assessment appeals until courts clarify "the proper basis for review."

Meyer said he doesn't believe that the assessment settlements are hurting the city. The city's assessment roll has actually increased in the last year, according to Meyer.

The city has questions about the process the county is using to reduce assessed property values because applications "do not appear to be going through the review process as mandated by the New Castle County Board of Assessment," according to the mayor's office. 

The mayor said Wilmington "cannot tolerate" the revenue loss and hopes to resolve the matter "without the need for legal action." 

Meyer said the county has been very open.

"With regard to any threat of lawsuits, I have no idea what they’re talking about," he said. "They should pay attention to the facts of each case." 

Contact Christina Jedra at cjedra@delawareonline.com, (302) 324-2837 or on Twitter @ChristinaJedra.