Editorial

Kent County administrator’s request for tax increase should be scrubbed

August 21, 2015
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Kent County Administrator Daryl Delabbio has asked the board of commissioners to consider a tax hike to the full amount approved by voters, noting the Headlee tax limitation amendment essentially caps the county’s revenue collections — exactly as it was intended.

Most members of the commission apparently do not support such a move, and the Business Journal supports that position. Vice Chairman Jim Saalfeld, in his methodical manner, told the Business Journal the commission is determined “to make sure we are delivering services in the most efficient and effective way possible” before considering such a hike.

The Business Journal notes with increasing property values (among some of the highest in the state), such a suggestion is troubling. The county expects to receive 2015 tax payments of $83.3 million. Delabbio told commissioners while the property values are returning to pre-recession levels, the costs of government are increasing faster. It is a startling comment that deserves scrutiny.

Delabbio suggests a 2.4 percent increase in wages and a 10.7 percent increase in group health care costs are reason to consider the tax increase, though the county is self-insured. The Business Journal reported in 2013 that, during the course of negotiations with Standard & Poors and Moody’s Investor Services, the ratings agencies review of Kent County’s wages and employee costs noted the county is “in the catbird’s seat,” with the self-funding insurance plan projected to remain flat, going from $10.6 million in 2013 to $10.7 million in 2017 — exactly where the county sits now.

At that time, state revenue sharing was not expected to grow, although this year legislators ramped up the state’s return of revenue to local governments. The county’s outstanding debt was negligible, real estate transfer tax and fees are expected to rise to approximately $2.1 million, and county reserves are more than adequate. The Government Finance Officers Association has given the county its highest award for financial reporting, an award the county has received more than 20 times. The county has earned Triple A bond ratings for more than 15 consecutive years.

Despite its reserves and honorable financial achievements, the county generally does not participate in tax abatements to support Downtown Development Authorities throughout Kent County, nor does it support abatements in Neighborhood Business Improvement Districts. According to the county equalization department, 2014 average home prices in Kent County rose more than 7 percent for the third year; agricultural, commercial and industrial property values increased by 7.25, 4.49 and 2.84 percent, respectively.

The county board of commissioners now begins to scrutinize departmental budget requests and awaits the finance department’s 2016 revenue estimates.

Delabbio’s complaint in regard to the “cost of government increasing” deserves more scrubbing than scrutiny.

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