City officials question legislation putting Newark out millions

Newark city officials are questioning the preferential treatment Delaware’s county seats—Wilmington, Dover and Georgetown, Del.—receive in terms of state reimbursements on tax-exempt buildings. In the city, 46 percent of the buildings are non-taxable, but Newark has never seen a cent of reimbursement money, according to Newark Mayor Vance A. Funk III.

The state of Delaware issues reimbursements to three eligible cities for buildings that offer “eligible nonprofit, tax-exempt activities,” such as hospitals, homeless shelters and public museums, according to the state’s website. Also included on the list are schools, colleges and universities, which comprise 40 percent of Newark, Funk said. The other 6 percent of tax-exempt buildings are government buildings.

Funk also said he thinks Newark has the highest tax-exempt properties of all cities in the state.

City Manager Carol Houck said the amount of money the city should receive would cover much of the city’s expenses.

“The total exemptions for tax-exemption for properties that are not taxed is about $4.8 million,” Houck said.

In 2008, the state was set to include Newark among the cities that would receive a share of the state’s payment in lieu of taxes, or PILOT, fund. However, a disagreement between former Gov. Ruth Ann Minner (D-Del.)and the alderman’s court of Newark led to the city’s removal from the bill, Funk said.

“There were 72 hours left until the end of the general assembly and suddenly, the next day, the governor and several influential legislators took Newark out of the bill to punish Newark for having the audacity to lower the drunk driving standard to 0.08 [blood-alcohol content],” Funk said.

Rep. John Kowalko (D-Del.) said the reimbursement the city could be receiving would help the city’s budgetary shortfalls.

“The intention is that the reimbursement does not make the budget 100 percent whole, but it is made easier,” Kowalko said.

Newark has been forced to cover shortfalls through other means, such as raising the cost of utilities, he said.

Funk said he hopes a bill that is currently going to committees will pass the state’s general assembly on June 30. The bill should pass barring any unforeseen disagreements, Funk said.