The Sussex County Council received a legislative update from Hal Godwin, deputy county administrator, at this week’s county council meeting.
Godwin spoke to the council about House Bill 85, which would amend Title 30 of the Delaware Code relating to State Taxes — allowing tax intercept programs to be used to collect delinquent taxes.
“This bill has been introduced, and successfully and unanimously passed the House of Representatives three times. It’s never gotten out of committee in the Senate on those three occasions.”
Godwin said the school districts would be the “big winners” from the bill, if it is passed.
“Of all the tax dollars that are delinquent, 80 percent go to the schools. Only 20 percent come to us,” he said. “This is much more about properly funding our school districts than it is anything else.”
HB 85 states that the five-year school tax in arrears for all three counties equals $32,366,986.44. The bill breaks out the arrears for each county in the state, as well as each school district. For instance, there is $7,498,805.25 due in Sussex County, of which $2,437,659.84 is due to the Indian River School District.
“I think this will make it much more obvious to legislators in the Senate that this is an urgent need that really needs to be addressed,” said Godwin.
Tax interceptor programs have been successful in collecting child support, he noted.
“It’s a very valuable tool. Really all it does is it says, if you have a state income tax refund or any other tax coming back to you from the State of Delaware, and you have this outstanding tax debt, they will take that refund and put it against the tax debt.
“They’re not taking anything from you that you’ve already earned — it’s just your tax refund. I don’t think it has a major impact on the average citizen, but it does help to make some folks responsible who haven’t found it convenient to do so in the past.”
Godwin said the County’s collection department has been very successful in collecting back taxes over the last few years.
“This would be another tool for them to bring in more of the delinquent dollars.”
Councilman Rob Arlett asked if the County was also using foreclosure in order to collect back taxes.
“The County has been very aggressive in the last few years with collection of taxes,” said County Attorney J. Everett Moore Jr. “We’ve taken a lot of properties to tax sale, and we’ve been able to gain a substantial amount of funds.
“But there’s a large percentage of old mobile homes that are on properties, that if you went through that process, it would cost a lot more than the amount that you would get back. There’re also issues concerning abandonment of the homes, getting the titles back… It’s a difficult issue, but every little bit helps.”
Also discussed this week was Senate Bill 5, which affirmatively authorizes preexisting common interest communities (HOAs) and approved common interest communities to comply with any or all of the provisions of the Delaware Uniform Common Interest Ownership Act (DUCIOA) with which they are not already required to comply.
He noted that SB 5 is different from the 207-page DUCIOA.
“Which means an HOA that was built in the 1960s would have to live by these rules, and I’m not sure that’s going to fit when you think about how some of the HOAs that we have in this county alone — we have some HOAs that have some pretty primitive … zero rules or policies — it does create some problems,” said Godwin.
He noted that the Attorney General’s Office has been ordered by the governor and the General Assembly to develop “some processes and some remedies” for many of the HOA problems throughout the state, and has set up an advisory committee. Godwin currently sits on the committee, in place of Council President Michael Vincent.
Godwin said he would like Moore to review the bill more closely and potentially comment on how it could impact county residents.
“I believe, from my layman’s eyes, what I see in here is an assemblage of all the different laws and policies throughout the state that have ever been used to try and organize and give some structure to HOAs and common interest communities,” he said, adding that the bill “might impose an undue financial burden on some of the folks that are already living in those communities.”
The responsibilities may include stormwater management, paving of the streets, sidewalks and streetlights.
“It can be quite a list of infrastructure that needs to be maintained by the owners,” said Godwin. “It’s a difficult animal to manage, but it’s the way things have been managed within the state of Delaware for many, many, many years.”
Moore said the impetus for the bill was that there were many subdivisions that were unable to maintain streets, roads and other amenities.
“Part of the law is very complex,” said Moore. “There’s a very special formula how you calculate the dues — so you project out how much it’s going to cost to do certain things in the subdivision. So, if you’re a developer and you set up a subdivision, there are guidelines and laws on how you set up the dues, set up the association.
“I would be concerned trying to retrofit the old subdivision into there. I don’t know how that could work.”
Moore said he would have attorney James Sharp of Moore & Rutt, who is the firm’s expert on DUCIOA, meet with Godwin regarding the bill.
Godwin said the bill was introduced at the end of March and is currently in the Housing & Community Affairs Committee.
Senate Bill 54, relating to right-to-work zones and gross receipts tax, was also discussed before council.
The act would allow the director of the Delaware Economics Development Office, currently Alan Levin, to create right-to-work zones as part of its inducements to bring new businesses to Delaware and requires those zones to be offered for manufacturing businesses hiring at least 20 employees. It also exempts those manufacturing businesses from their gross receipts taxes for their first five years.
“This bill, for me, represents quite a significant change in our legislature,” said Godwin. “Right-to-work issues have never been embraced in Delaware that I can remember.”
Godwin said the bill, introduced in April and currently is in committee, is aimed at improving the economy.
Through right-to-work, a person would not be required to be a member of a labor union or to pay union dues as a condition of employment.
“It doesn’t have anything to do with your employment,” he explained. “Of course, the labor unions don’t like this… However, this action has been very successful in other counties, mostly in mid-south of this country.”
Godwin noted that HB 86 allows counties and municipalities to elect not to be subject to the State’s Public Employment Relations Act.
HB 87 would allow each municipality and each county to create right-to-work zones. Both bills which were introduced last week.
“If you decided to designate all AR-1 zoning land use to be right-to-work zones, you could do that,” he said. “You could arbitrarily say everything east of Route 113 is a right-to-work zone. This legislation, if it’s passed, would allow you to do that.
“I’m not sure what benefit that would be for this council.”
Godwin said he would be watching the three bills very carefully.
At the meeting, the County Council also recognized retiring County employee C. Shane Abbott, who has worked for Sussex County for 31 years.
“We wish you the very best in your next chapter, Shane,” said County Administrator Todd Lawson.
“We do appreciate all you do for the county, thank you very much,” said Vincent. “You are a valued employee — we hate to see you leave.”
Planning & Zoning Director Lawrence Lank said Abbott has worked as a zoning inspector, planning technician and assistant director.
“I thought he might be director someday… He’s excellent. He’s been a very good friend and very dependable.”
“It has been enjoyable. I’ve learned a lot from him and I respect him very much,” said Abbott of Vincent.
The County Council will not meet on April 28. The next council meeting will be held Tuesday, May 5, at 10 a.m.