DIRECTING THE PUBLIC EDUCATION FUNDING COMMISSION TO SUBMIT A REPORT WITH RECOMMENDATIONS FOR THE EQUITABLE COLLECTION AND DISTRIBUTION OF PROPERTY TAX REVENUE IN DELAWARE.

Legislation Document

SPONSOR:

Rep. Wilson-Anton

Reps. S. Moore, Phillips, Burns, Lambert, Gorman

HOUSE OF REPRESENTATIVES

153rd GENERAL ASSEMBLY

HOUSE CONCURRENT RESOLUTION NO. 78

DIRECTING THE PUBLIC EDUCATION FUNDING COMMISSION TO SUBMIT A REPORT WITH RECOMMENDATIONS FOR THE EQUITABLE COLLECTION AND DISTRIBUTION OF PROPERTY TAX REVENUE IN DELAWARE.

WHEREAS, property taxes are a major source of funding for Delaware public schools, averaging 1/3 of school district budgets; and

WHEREAS, the amount of local funding a district generates from local school taxes depends on the assessed values of the properties in the school district and the district’s tax rates; and

WHEREAS, unlike county governments, school district boards do not have the legal authority to adjust the rate of taxation for local school taxes without a referendum, except following a general reassessment of all real estate in the county under § 1916(b) of Title 14; and

WHEREAS, school districts must hold special elections to increase local revenue, even to adjust for increased expenses due to inflation and growth in student enrollment; and

WHEREAS, the 2020 Court of Chancery decision in

In re Del. Pub. Schs. Litig.

, 239 A.3d 451, highlighted that “[b]y not assessing properties at their present fair market values, the counties force school districts to call referendums more often”; and

WHEREAS, the combination of outdated assessed values and Delaware’s uniquely restrictive referendum requirements have resulted in stark disparities in the amount of local revenue raised to support the needs of students from district to district; and

WHEREAS, a 2025 Department of Education report indicates that the local revenue school districts receive per student ranges from $2,223 to $14,036; and

WHEREAS, these funding disparities negatively impact school districts’ ability to provide students with the supports they need and prevent low-wealth districts from recruiting and retaining educators and school staff; and

WHEREAS, Delaware’s outdated local revenue system is a direct threat to this State’s ability to fulfill its constitutional obligation to provide students with equal access to public education; and

WHEREAS, at least as far back as the early 1970s, there have been many discussions about how to increase equity and improve public education in Delaware; and

WHEREAS, past discussions, studies, recommendations, and efforts to implement improvements to the City of Wilmington’s and the State’s education funding systems include all of the following:

(a) The General Assembly’s debates in 1971 and 1972 about House Bill No. 129 of the 126

th

General Assembly that enacted the provision in § 1916(b) of Title 14 that allows school districts to calculate a new tax rate that realizes no more than a 10% increase in revenue after a general reassessment of all real estate in the county.

(b) The release of studies and reports, including the 2023 American Institutes for Research’s “Assessment of Delaware Public School Funding”, “They Matter Most”, the Vision 2015 coalition plan, Hope Commission Reports, and the 2008 Wilmington Education Task Force Final Report required under Senate Joint Resolution No. 3 of the 144

th

General Assembly.

(c) The creation of the Public Education Funding Commission, Wilmington Learning Collaborative, Redding Consortium, Wilmington Education Advisory Committee (WEAC), the Wilmington Education Improvement Commission (WEIC), and the School District Consolidation Task Force; and

WHEREAS, the Public Education Funding Commission (Commission) was first established under Senate Concurrent Resolution No. 201 of the 152nd General Assembly and was re-established January 21, 2025, under House Concurrent Resolution No. 2 of the 153

rd

General Assembly; and

WHEREAS, the Commission is conducting a comprehensive review of public education funding for all students and populations served by district and charter schools, developing a roadmap of recommendations to implement improvements to the public education funding system, and serving as an ongoing body to review the funding annually and recommend updates and changes; and

WHEREAS, the Commission is required to issue its first recommendations by October 1, 2025, and its final recommendations by July 1, 2026; and

WHEREAS, states across the country provide school districts with the ability to raise revenue to meet the needs of their students while also providing less wealthy school districts with the supplemental state funding needed to support students; and

WHEREAS, the General Assembly finds that the residents of this State would benefit from the equitable collection and distribution of property tax revenue to support the needs of public schools and provide students in this State with equal access to public education.

NOW, THEREFORE:

BE IT RESOLVED by the House of Representatives of the 153

rd

General Assembly of the State of Delaware, the Senate concurring therein, that the equitable collection and distribution of property tax revenue to support the needs of public schools is good public policy because it provides students in this State with equitable access to quality public education.

BE IT FURTHER RESOLVED that the Public Education Funding Commission (Commission) shall evaluate the following issues and make findings and recommendations to achieve a more equitable collection and distribution of property tax revenue to support the needs of public schools:

(1) State expected or required minimum and maximum local tax rates based on district relative wealth.

(2) The current county-wide school tax collection process and school district rates of taxation and how to achieve locally governed schools with county-wide funding.

(3) Existing state funding for less wealthy school districts and mechanisms for providing additional state funding for less wealthy school districts.

(4) The impact of property classifications, exempt property, and resident income on the ability of school districts to adequately and equitably fund schools at a county-wide and statewide basis.

BE IT FURTHER RESOLVED that no later than January 1, 2026, the Commission must compile a report containing a summary of the Commission’s work regarding the issues assigned to it under this Concurrent Resolution, including any findings and recommendations, and submit the report to the Governor, the General Assembly, the Secretary of the Department of Education, and the Director and the Librarian of the Division of Legislative Services.

BE IT FURTHER RESOLVED that in January 2025, the

House and Senate Education committees will hold a joint meeting at which the Commission presents for discussion both the first recommendations due by October 1, 2025, and the recommendations from this resolution.

SYNOPSIS

This Concurrent Resolution directs the Public Education Funding Commission (Commission) to make findings and recommendations to achieve the equitable collection and distribution of property tax revenue to support the needs of public schools, and submit a report with the recommendations no later than January 1, 2026.

This Concurrent Resolution provides that the House and Senate Education committees will hold a joint meeting in January 2026 where the Commission will present for discussion the recommendations that are due October 1, 2025, and from this Concurrent Resolution.