How to achieve “fairness” in a broken process?
The split-tax rate property tax system that was created last year during the reassessment process sits at the center of the current fight because it is both a relief tool and a fairness dispute. Supporters say it helped shield homeowners from the most painful effects of the reassessment, while critics argue it shifts the burden onto businesses, landlords and other non-residential owners.
When the initial reassessment was done, it was found that residential properties had increased far faster than commercial properties over the last 40 years. The result was that, given the standard of “total tax revenue is to remain unchanged”, the tax burden shifted dramatically toward residential properties. Before the split rates were applied, New Castle County’s reassessment shifted the tax burden from about 66% residential / 34% commercial to about 76% residential / 24% commercial. Before split-tax rates, both residential and commercial properties had the same tax rate applied. After the split-tax rates, the rate for commercial properties was set at 185% of the residential rate. This provided substantial relief to residential property owners, but heavily burdened commercial properties. Commercial property owners had been much less vocal about the situation, as many saw tax relief from the initial reassessment. With split-tax rates, the balance moved back somewhat, to about 69% residential / 31% commercial.
Why supporters back “Split-Tax Rates”
The strongest argument for split rates is that the reassessment shock landed hardest on residential taxpayers, many of whom saw large jumps after decades of stale property values were finally corrected. In that view, split rates are a practical way to soften the blow for homeowners without undoing the reassessment itself, which lawmakers and courts have treated as legally necessary. Supporters also argue that immediate relief mattered because the county and school districts needed a fast fix before residents were forced to absorb sharply higher bills all at once…