On Wednesday, Gov. Matt Meyer allowed a disputed school tax bill to become law without his signature, exercising a constitutional option that allows the chief executive to express objections without preventing legislation from taking effect.
House Bill 462 authorizes New Castle County school districts to tax residential (homes) and non-residential (commercial/industrial) properties at different rates. The legislation continues and refines a temporary practice enacted earlier to help deal with the fallout from the county’s problematic latest property reassessment.
Due to several factors, including the nearly four decades since the last countywide reassessment and certain aspects of the valuation process, tax bills for many homeowners increased disproportionately compared with commercial properties.
The two-tier tax was intended to reduce that disparity and lessen the political backlash over sharply higher residential tax bills.
Under the new law, school districts can impose one tax rate on residential properties, and nearly twice that rate (x 1.85) on the value of non-residential properties.
In a statement explaining his decision, the governor agreed that the authority granted by the law serves a legitimate purpose: “Your home should not necessarily be taxed the same as warehouses, office parks, or industrial facilities,” he said.
However, he took issue with HB 462. Because apartments are assessed as commercial property and are subject to the higher tax rate, the governor argues renters ultimately bear these additional costs. The result is that many apartment residents are paying higher tax rates compared to those living in single-family homes and townhouses. “Under this law…thousands of working families may be taxed at substantially higher rates…simply because those families rent rather than own,” he said.
The governor indicated the bill was not vetoed because of the disruption it would have caused to school districts preparing to issue tax bills.
Additional legislation could be considered during the next legislative session.
