By Glenn Rolfe

GEORGETOWN — The state of Delaware and Sussex County need to ante up more money for its tax-exempt properties in Georgetown, according to Town Councilwoman Sue Barlow.

She’s hoping the municipality can recoup lost tax dollars during challenging times.

“The town receives payment in lieu of taxes from the state of Delaware for all of the state buildings that have been taken off our tax rolls,” Councilwoman Barlow said during a Feb. 14 meeting. “I think, right now, it’s a good time for the town of Georgetown to make a formal request to both the county and the state to make us more payments in lieu of taxes because they are taking more and more of our property off our tax rolls.”

Georgetown does receive some compensation.

“We do get a payment in lieu of taxes from Sussex County,” said Town Manager Eugene Dvornick. “We do get money from both of them (state and county).”

Sen. Brian Pettyjohn, R-Georgetown, explained further.

“It’s payment in lieu of taxes that the state runs,” he said. “It is also formerly known as the County Seat Package. The County Seat Package, right now, only serves the three county seats (Wilmington, Dover and Georgetown).”

The amount paid by the state and the county is governed by the finance portion of the Delaware Code and is based on a program coined “PILOT.”

For county seats with populations of 50,000 or less — in this case, Georgetown and Dover — there is a direct payment of 30.8% of the tax assessed for a particular property. For county seats with a population above 50,000 residents (Wilmington), the payment is 100% of the tax assessed.

“We just can’t continue to ask our homeowners to pay for what the state is using,” Councilwoman Barlow said. “In the future, I think we really need to consider making a formal request to the state of Delaware and to the county for more money for the properties that they have taken off our tax rolls.”

Properties in Georgetown included for PILOT encompass 14 county-owned, 29 state-owned and seven school parcels.

Last year, the town of Georgetown received $96,707.05 in PILOT payments from the state for its properties. It obtained $6,715 from the county.

In Dover, the seat of Kent County, there are a little more than 100 state-owned parcels in the municipal limits. At 30.8%, the payment the city received from the state for fiscal year 2022 was $432,845 based on the formula.

“We would have otherwise received $1,183,779 in taxes. That is what the taxable amount would have been,” said Dover City Manager David Hugg.

According to city spokeswoman Kay Sass, Kent County owns just a handful of parcels in Dover limits, with no payment paid to the city last year.

In comparison, for fiscal year 2021, the amount paid by the state to the city of Wilmington was $3,360,817. New Castle County does not pay Wilmington any PILOT funding, according to city spokesman John Rago.

Additionally, Mr. Rago pointed out that about 40% of the total assessed valuation in the city is exempt from taxation. “This is a more important number than the number of parcels in each category,” Mr. Rago said.

PILOT payments may be subject to change, however.

According to Mr. Dvornick, in recent legislative sessions, there “has been a push” to have the city of Newark included because, when a large Chrysler facility closed there, the municipality lost its largest taxpayer. The University of Delaware, which is tax-exempt, bought the property.

Sen. Pettyjohn said Sen. Dave Sokola and Rep. Paul Baumbach, both Democrats from the Newark area, are heading that initiative, though no legislation about it has been introduced.

“They are trying to, one, put more money into it but then two, expand it (to) also include Newark because of the large number of properties there with the University of Delaware that are also within the town limits of Newark and not subject to taxation,” Sen. Pettyjohn said.

While noting Councilwoman Barlow’s concern, Mr. Dvornick said it is wise to proceed with caution.

“You’ve got (to) be careful what you ask for from the General Assembly because, sometimes, it’s not what you want. So if it is somebody saying, ‘OK, if Georgetown wants more money, then we want Newark included, and now, all of a sudden, you have to compromise, and it may not end up as good as you want,” he said.

Sen. Pettyjohn agreed.

“Once you kind of break that seal and open it up, then you never know what is going to end up happening with everybody else that is coming to the trough,” he said.