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SPONSOR: Sen. Sokola & Rep. Minor-Brown & Sen. Townsend &
Rep. Harris & Sen. Lockman & Rep. Osienski
Sens. Hoffner, Pinkney, Poore, Sturgeon; Rep. Romer
DELAWARE STATE SENATE
153rd GENERAL ASSEMBLY
SENATE BILL NO. 322
ACT TO AMEND TITLE 14 OF THE DELAWARE CODE RELATING TO LOCAL SCHOOL TAXES.
1 WHEREAS, until recently, none of the counties in this State had conducted a general reassessment of real property
2 in decades; and
3 WHEREAS, the failure to conduct reassessments meant that outdated property values were used as the basis of
4 calculating school taxes, creating inequities among taxpayers and inconsistencies in public school funding between school
5 districts; and
6 WHEREAS, the recent general reassessments and the requirement under § 8306 of Title 9 that periodic
7 reassessments be conducted at least once every 5 years are intended to restore fairness and transparency to the property tax
8 system by aligning the assessed value of real property with the current fair market value of that property; and
9 WHEREAS, school district taxes are based on the value of real property in the district as determined by the
10 county’s most recent reassessment; and
11 WHEREAS, school districts rely on the revenue from local school taxes to fund operations, including student
12 services, staffing, transportation, and programs; and
13 WHEREAS, § 1916(b) of Title 14, enacted in June 1972, requires school districts to adjust their tax rates after
14 reassessment so that a school district receives no more than a 10% increase in actual revenue as a result of increases in the
15 fair market value of real property in the district; and
16 WHEREAS, otherwise, under Chapter 19 of Title 14, a school district may only increase the district’s operational
17 tax rate tax after a referendum is approved by voters at a special election; and
18 WHEREAS, the requirement of taxpayer approval of an additional tax through a referendum election provides
19 accountability and maintains public trust; and
20 WHEREAS, most school districts in this State face significant challenges maintaining the services to students for
21 which funding was initially approved by referendum, because of inflation, enrollment changes, increased student needs, and
22 increasing operational costs; and
23 WHEREAS, the ability to increase revenue by up to 10% after a reassessment is an imprecise and retroactive
24 approach to addressing these challenges; and Page 1 of 5 Released: 05/15/2026 03:50 PM
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25 WHEREAS, school tax rates need to be adjusted after reassessment and these adjustments should be based on the
26 average growth rate in taxable property in the district since the previous reassessment; and
27 WHEREAS, by enacting these policy changes, this Act ensures that school tax rates for operating costs are
28 forward-looking, not retroactive, and provides consistency for taxpayers statewide and across school districts, to the benefit
29 of public school students; and
30 WHEREAS, providing limited, predictable, and transparent flexibility for school districts to increase tax rates by
31 no more than 2% annually without a referendum allows school districts to gradually adjust to these challenges; and will
32 reduce the frequency of referenda while maintaining strong taxpayer protections; and
33 WHEREAS, the General Assembly finds that this limited ability for school districts to adjust tax rates without
34 referendum is good public policy because requiring demonstrated fiscal stewardship, reasonable reserve levels, and
35 continued oversight balances the need for local fiscal stability with safeguards for taxpayers.
36 NOW, THEREFORE:
37 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
38 Section 1. Amend Chapter 19, Title 14 of the Delaware Code by making deletions as shown by strike through and
39 insertions as shown by underline as follows and redesignating accordingly:
40 § 1901. Definitions.
41 As used in For purposes of this chapter:
42 (1) “District” means a reorganized school district and the school district of the City of Wilmington. district.
43 (2) “General reassessment” or “reassessed” means the general reassessment of all real property in the district
44 by a county under § 8306 of Title 9.
45 (3) “School board” means a board of education of a reorganized school district and the Board of Education of
46 the school district of the City of Wilmington. district.
47 § 1902. Power of district to levy taxes for school purposes.
48 (a) Any Except as provided under Chapter 26 of this title, a district may, in addition to the amounts apportioned to
49 it by the Department of Education or appropriated to it by the General Assembly, levy and collect additional taxes for
50 school purposes upon the assessed value of all taxable real estate in the district, except any of the following:
51 § 1903. Election preceding levy of tax.
52 Before any (a) Except as specifically provided under this title, before a school board levies or increases a tax under
53 § 1902 of this title, it shall determine whether the school board must do all of the following:
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54 (1) Determine if the proposed tax shall be is on the basis of a specified amount or of a specified rate of
55 taxation and shall call taxation.
56 (2) Call a special election to be held at the polling place or places designated by the Department of Elections
57 conducting the election. There shall be not election. The special election must be held under Subchapter IV of Chapter
58 10 of this title.
59 (b) A school district may not hold more than 2 such special elections under this section held during any a 12-
60 month period.
61 § 1914. Levy of annual school tax without election.
62 (a) A The school board of any district, which has for 1 year that has, for 1 year, levied a local tax under this
63 chapter, chapter may continue annually, without a further election or referendum, to levy such that local tax not exceeding
64 tax in amount the an amount that does not exceed any of the following, as calculated under § 1913 of this title:
65 (1) The tax originally authorized by an election if said election, if the original authorization was on the basis
66 of an amount of tax, or not to exceed the tax.
67 (2) The rate of tax originally authorized by an election if said election, if the original authorization was on the
68 rate of taxation, each together with an added 10 percent for delinquencies and costs of collection as provided in § 1913
69 of this title. taxation.
70 (3) The amount or rate of tax under paragraphs (a)(1) or (a)(2) of this section as increased under subsection
71 (b) of this section.
72 (b) A school board that has levied a local tax under § 1902(a) of this title may, without a further election or
73 referendum, annually increase the rate of that tax under this chapter for the next fiscal year by an amount that does not
74 exceed 2% of the tax rate levied for the school district for the immediately prior fiscal year, as follows:
75 (1) A school board may not increase the tax rate if any of the following apply:
76 a. The district’s operational reserve balance is more than 10% of the district’s annual revenue.
77 b. For the same fiscal year as a new tax rate is established after a general reassessment under § 1916(b) of
78 this title.
79 (2) A school board may implement this subsection (b) beginning the earlier of the following:
80 a. For fiscal year 2031.
81 b. After the first time a new tax rate is established by the district following a general reassessment after
82 [the enactment date of this Act].
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83 (c) If the amount or rate of tax is increased under subsection (b) of this section, state funding may not be decreased
84 in any subsequent tax year based on the levy of that increase.
85 § 1916. Tax collection warrant and assessment list; tax rate after general reassessment.
86 (b)(1) After a general reassessment, a school board shall calculate a new tax rate that projects the total amount of
87 money that is equal to or less than the sum of all of the following:
88 a. The actual operating revenue derived by the tax levied in the fiscal year immediately preceding the
89 general reassessment.
90 b. A percentage that is equal to the average growth rate, during the previous 5 years, in taxable property
91 in the district.
92 (2) If a general reassessment is completed after a new tax or a tax increase is approved under § 1903 of this
93 title but before actual revenue is derived from that approved tax, the school board shall calculate a new tax rate that
94 projects the total amount of money that is equal to or less than the sum of all of the following:
95 a. The projected operating revenue announced, projected, or calculated to be derived by approved tax.
96 b. A percentage that is equal to the average growth rate, during the previous 5 years, in taxable property
97 in the district.
98 Whenever (3) Paragraphs (b)(1) and (b)(2) of this section do not apply to general reassessments before
99 January 1, 2026, and this paragraph (b)(3) applies only to general reassessments before January 1, 2026. If the
100 qualified voters of a reorganized school district have approved a specific rate of taxation or specified amount of
101 taxation under § 1903 of this title and a subsequent general reassessment of all real estate in the county changes
102 the total assessed valuation of the school district, the local board of education of each such local school district
103 shall calculate a new real estate tax rate which, at its maximum, would realize no more than 10% increase in actual
104 revenue over the revenue derived by real estate tax levied in the fiscal year immediately preceding such reassessed
105 real estate valuation. In the event the qualified voters of a reorganized school district approve a specific rate of
106 taxation or specified amount of taxation under § 1903 of this title to be collected, and there is a reassessment
107 effective after voter approval, but before actual revenue is derived from increased taxation resulting from such
108 voter approval, the local board of education of each such local school district shall calculate a new real estate tax
109 rate which, at its maximum, would realize no more than a 10% increase in actual revenue over the revenue
110 announced, projected or calculated to be derived by such voter approval and prior voter approvals.
111 (4) Any subsequent increase in the rate of taxation shall may only be achieved only by as follows:
112 a. Under § 1914(b) of this title.
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113 b. By an election of the qualified voters in such local the school district according to the procedures in
114 under § 1903 of this title.
115 Section 2. Amend § 2601, Title 14 of the Delaware Code by making deletions as shown by strike through and
116 insertions as shown by underline as follows:
117 § 2601. Power of county vocational-technical high school districts and county vocational-technical school districts
118 to levy taxes for school purposes.
119 (c) In the event After a general reassessment of all real estate in the county changes the total assessed valuation of
120 a county vocational-technical high school district or a county vocational-technical center, the board of education of such
121 that district shall calculate a new tax rate which, at its maximum, would realize no more than 10 percent increase in actual
122 revenue over the revenue derived by real estate tax levied in the fiscal year immediately preceding such reassessed real
123 estate valuation. under § 1916(b) of this Title.
SYNOPSIS
This Act repeals the ability of school districts to increase tax rates by up to 10% when recalculating the district’s
rate of taxation after a general reassessment. This Act does not repeal the requirement under § 1916(b) of Title 14 that a
school district recalculate the district’s rate of taxation after a general reassessment, but instead of the 10% maximum,
limits the amount of money a district can collect as a result of increases in the fair market value of real property to an
amount that is equal to or less than the sum of all of the following:
1. The actual operating revenue derived by the tax levied in the fiscal year immediately preceding the general
reassessment.
2. A percentage that is equal to the average growth rate in taxable property in the district since the previous
reassessment.
This Act also allows school districts to increase a tax approved in a referendum election under Chapter 19 of Title
14 by up to 2% annually without a referendum if the district’s operational reserve balance is not more than 10% of the
district’s annual revenue and it is not the same fiscal year that the rate of taxation is recalculated after a general
reassessment. This authority will allow school districts to maintain services for students by gradually adjusting to
challenges such as inflation, enrollment changes, and increased student needs.
Under this Act, the new recalculation equation under § 1916(b) of Title 14 applies beginning for the fiscal year
following the next general reassessment and a school district cannot begin to increase tax rates by no more than 2% without
a referendum until after the next general reassessment or for fiscal year 2031, whichever is earlier.
This Act does not do any of the following:
• Allow school districts to levy an additional tax that is more than 2% without an approved referendum.
• Change the differences under current law for tax rates for vocational-technical districts. Under current law and
this Act, vocational-technical districts are required to use the same calculations as other school districts when recalculating
the rate of taxation after a general reassessment. However, the tax authority for vocational-technical districts is under
Chapter 26 of Title 14, not Chapter 19, so the authority to annually increase a tax rate by 2% does not apply to vocational-
technical districts.
This Act also makes the following corresponding and technical changes to Chapter 19 of Title 14:
• Revises the definitions in § 1901 by adding “general reassessment” and “reassessed” as defined terms and
updates the definition of “district” to reflect current school district boundaries.
• Clarifies that if Chapter 26 applies to a school district, the ability of a district to levy an additional tax under §
1902(a) does not apply to that district.
• Technical corrections to conform existing law to the standards of the Delaware Legislative Drafting Manual.
Author: Senator Sturgeon
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