Rep. Earl Jaques, D-Glasgow, introduced House Bill 129, separating operating funding from capital funding.
School systems across the state say they are struggling to make ends meet, but one lawmaker thinks the problem could be alleviated by giving school board the authority to raise taxes every year.
Rep. Earl Jaques, D-Glasgow, introduced House Bill 129 in the Delaware General Assembly May 2. The bill would allow school boards to raise taxes for operational funding as they see fit, with certain limitations.
Operational funding is generally used for schools’ day-to-day needs, like staff salaries, utilities, maintenance and classroom supplies. Indian River will use operational funds to buy portable classrooms.
Jaques is a member of the Southern Regional Education Board, the Education Commission of the States and the National Council of State Legislatures.
“I reached out to my colleagues at these events events and asked what it is they’re doing that we’re not doing. And what it is, it’s the funding system,” Jaques said. “We are one of four states, I believe, that do not allow what I’m trying to propose, where you can have operational money without referendum.”
Jaques said in 2018, Delaware ranked 32nd out of the 50 states for quality of education, according to U.S. News and World Report.
“What people don’t understand about this bill is that it’s based on the Consumer Price Index, and that helps people on a fixed income,” he said.
House Bill 129 would allow school districts to raise local property taxes for operational funding annually. However, the bill caps the rate at which taxes may be raised at either 2 percent or the percentage change in the CPI, whichever is lower.
The CPI is determined by the U.S. Bureau of Labor Statistics, and is a measure of the average change in prices paid by consumers for goods and services. As of March of this year, the CPI was measured at 1.9 percent.
“That way, [the school districts] know the money is there if they need it, and they don’t abuse it because they know it’s there,” Jaques said. “The problem with the referendum system is that they have to ask for more than they actually need, because they know it’s going to be a long time before they can come back.”
Despite his assurances that the system would not be abused, technically, school districts could raise taxes by 2 percent each year.
“Everybody’s in ‘panicsville,’ but it’s really not that way at all,” he said. “We, my colleagues in the legislature and I, could raise your income tax right now, and what’s your recourse? Vote us out at the next election.”
Jaques argues that a partner bill would allow school board voters to do the same thing.
House Bill 134, introduced by Rep. Paul Baumbach, D-Newark, would change school board member terms from five to three years and give them compensation at a rate of $100 per meeting, not to exceed $1,200 a year.
“School boards determine the rate and the time and all of a referendum,” Jaques said. “But when the referendum fails, they’re not being held accountable.”
Jaques argued that House Bill 134 would encourage more people to run for school board seats and result in a higher voter turnout.
“We have a lot of places where an incumbent runs unopposed over and over,” he said. “When people realize they have a real job, I think that will change.”
Indian River School District Superintendent Mark Steele, whose district voters just rejected a referendum to pay for construction projects, has a different perspective.
“We know our board will not support that bill,” he said. “We have had things in the past that we could have done a match tax on and our board refuses to do that, because they don’t feel it’s fair to levy taxes on people like that.”
He’s also concerned about the effect the bill would have on school board elections.
“Somebody would run on a platform, you know, ‘I’m not going to support any tax increase,’” Steele said. “So you run that risk of getting people on your board that take no interest in the educational component and are just there to say no when tax time comes.”
One-third of Delaware school funding comes from property taxes. Referendums work by raising the property taxes of citizens within the district.
Delaware has some of the lowest property tax rates in the country, which makes it attractive to home buyers. However, low property taxes mean minimal school funding.
One of the reasons property taxes are so low is that they’re based on assessments done decades ago.
In Sussex County, the last time property taxes were assessed was in 1974. In Kent, it was 1987, and in New Castle, it was 1983.
The General Assembly has not addressed the problem, and that may be because voters would not take kindly to higher taxes.
“The courts are going to decide that,” Jaques said. “Nobody in [Legislative Hall] is going to be raising them.”
A lawsuit has been filed by Delawareans for Educational Opportunity and the NAACP Delaware State Conference of Branches against the state and the counties. It alleges that Delaware fails to provide disadvantaged students with an opportunity for quality education due to an inequitable public school funding system.
In Delaware, the taxes must be based on “fair market value.” The lawsuit contends that the state and counties are violating this law by using decades-old assessments.
The counties sought to have the case against them dismissed, but in a small victory for the plaintiffs, Vice Chancellor Travis Laster denied that motion in the Court of Chancery last year. However, it will likely be years before the case is fully decided, and then years more before any new system is implemented.
In his opinion, Laster wrote:
“Frequent tax referendums generate negative reactions. Some residents object as a matter of principle to having their taxes raised. More object if they think their tax dollars are not being used wisely. Delaware’s complex system for funding public schools is not easily understood. Confronted with regular requests for tax increases, some residents naturally infer that school officials are wasting money. Community resentment does not help the public schools or disadvantaged students.”