Sussex introduces budget amendment to dispense extra realty tax funding

By Glenn Rolfe
Posted 1/26/22

GEORGETOWN — Municipalities in southern Delaware are in line to reap dividends from a booming real estate market — as much as a half-million dollars — courtesy of Sussex County’s realty transfer tax windfall.

Create an account for additional free stories

Thank you for visiting BayToBayNews. Registered visitors can read 5 free stories per month. Visit our sign-up page to register for your free stories.


Start a digital subscription today!

Subscribers can read unlimited stories for a special introductory rate of $5.99 per month.

Subscribers, please log in to continue

Sussex introduces budget amendment to dispense extra realty tax funding

Proposed allocations of a portion of Sussex County's realty transfer tax windfall to municipalities show up to $500,000 in funding.
Proposed allocations of a portion of Sussex County's realty transfer tax windfall to municipalities show up to $500,000 in funding.
Delaware State News/Glenn Rolfe
Posted

GEORGETOWN — Municipalities in southern Delaware are in line to reap dividends from a booming real estate market — as much as a half-million dollars — courtesy of Sussex County’s realty transfer tax windfall.

On Tuesday, County Council formally introduced Sussex County finance director/Chief Operating Officer Gina Jennings’ proposed fiscal year 2022 budget amendment that would allocate $12 million in additional RTT funding.

Some $6,444,000 would go to towns through a formula-driven plan, with the remaining $5,556,000 earmarked for land acquisition for open space.

Ms. Jennings had “conservatively” budgeted $24,900,000 in realty transfer tax for the 2022 fiscal year.

Allocations to municipalities will range from $100,000-$500,000.

The disposition of the realty transfer tax can only be spent on capital or operating costs for public safety services, economic development programs (approved by Sussex County economic development director Bill Pfaff), public works, infrastructure/capital improvements and debt reduction.

“Each of the towns get their own RTT, so they are very familiar that this needs to be treated just like all their other RTT funds that they receive,” Ms. Jennings said.

The proposed allocation of the excess RTT funds includes a match. This year’s proposal differs from the RTT windfall in the 2021 budget when, through an amendment, the county allocated additional funding that included $5,375,000 for fire and ambulance service, $3 million for the ExciteSussex Fund loan program and $1 million for land acquisition for emergency medical service stations.

Last year, nearly every fire/ambulance service in each municipality received $250,000.

“This is a little bit different because each town has a different budget, a different population,” said Ms. Jennings. “Half of the money was based on population. The other half was based off their budget.”

The local match is for anything more than the minimum $100,000. “It would be a dollar-for-dollar match. It could be any type of funds. It could be extra RTT funds,” said Ms. Jennings.

Projected recipients of $500,000 include Georgetown, Laurel, Lewes, Milford, Rehoboth Beach and Seaford.

Under the formula, Millsboro is earmarked to receive $469,354. Meanwhile, smaller towns, such as Dagsboro, Frankford, Millville, Slaughter Beach, Bethel, Ellendale, Fenwick Island and Henlopen Acres, are to receive $100,000.

Following a required 21-day advertisement period, a public hearing will be held at the March 1 County Council meeting, at which time adoption of the amendment could take place.

Real estate transfer taxes are charged when property changes hands. Transfer taxes in Delaware are 4% of the purchase price of the property. The state receives 2.5%, with 1.5% going to the county.