New plan to stagger 15 percent tax increase set for County Council vote Tuesday

A tax increase plan that would phase in over two years the 15 percent property tax hike sought by New Castle County Executive Matt Meyer over two years is set to be voted on by County Council Tuesday. 

The proposal gives residents a credit to negate half the increase for the coming year, effectively raising property taxes 7.5 percent. The full 15 percent hike would take effect the following year. 

The proposal will be debated in the council's Finance Committee meeting at 1:30 p.m. and likely see more discussion and a vote at the 6:30 p.m. meeting of the full County Council. 

County Council and Meyer have been at odds over funding for government services after council last month rejected his proposed 15 percent property tax hike that would have taken effect in the coming fiscal year that begins July 1. 

Meyer's administration has calculated a $21 million budget shortfall for the coming fiscal year and has said balancing the budget from reserves would be "irresponsible." To avoid that, he's said raising taxes 15 percent would be necessary. 

For weeks, County Council members said Meyer's proposal was too steep or that they'd like to see the hike phased in.

To this point, Meyer has previously said he is against staggering the increase because it would require pulling from the county's tax reserves in order to balance the budget this year. Such a withdrawal would put the county's savings in a precariously low position, threatening its AAA credit rating, he has said. 

In town hall meetings with residents, he said drastic cuts to government services would be necessary if council did not support the 15 percent increase for the coming year. There was talk of closing libraries, parks and sports programs. 

That tone changed two weeks ago with his spokesman calling the new legislation a "work in progress." In a written statement after the new legislation was introduced, Meyer said the new proposal to stagger the 15 percent hike would not require reserves to be used and he endorsed the staggered implementation of the increase. 

"This compromise plan provides the revenue, phased in over the next year, to fully fund the county’s critical public services, balance our budget for the foreseeable future and end the years-long pattern of dipping into tax stabilization reserves to pay our bills," Meyer said in the written statement. 

Councilman George Smiley introduced the legislation and described it as a proposal put forward by Meyer after negotiations with council members following the sinking of the executive's last tax-increase proposal.

"He gets his 15 (percent) and council members that wanted the phase in, get their phase in," Smiley said of the new proposal.  

County Council's Finance Committee will meet at 1:30 p.m. in the council's conference room on the 8th floor of the City/County Building located at 800 N. French St. in Wilmington. The vote will occur at the 6:30 meeting of council on the first floor of the same building. 

Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com. Follow @Ber_Xerxes on Twitter.