As budget season heats up, South Bethany officials are navigating a tricky financial crossroads.
While a countywide property reassessment could technically lead to a sharp drop in the town’s property tax rate—from $1.30 to just $0.04 or $0.05 per $100 of assessed value—town leaders are debating whether now is really the right time to cut taxes.
A Surprising Plea to Raise Taxes
At the March 14th town council meeting, one resident made an unexpected request during public comments: raise property taxes.
“We pay nothing compared to other towns,” the resident said, pointing to critical capital projects like:
- Flood prevention and drainage improvements
- Raising bulkheads and roads
- Canal dredging
- Beach replenishment
- Cost-of-living adjustments for town staff
The town is facing an estimated $14 million in long-term capital needs—and right now, there’s no funding in place to cover them.
Revenue-Neutral or Revenue-Risky?
Mayor Edie Dondero explained that the reassessment has significantly increased property values, especially with the average home now estimated around $1.2 million.
While lowering the tax rate to 4 or 5 cents would make things revenue-neutral on paper, actual expenses are telling a different story.
Costs are climbing across the board for different things like:
- Health insurance and employee benefits
- Pension plans
- Materials and staffing
- Post-COVID drop in real estate transfer tax income
“We’ve been able to keep taxes low thanks to that transfer tax revenue, but we can’t count on it anymore,” Dondero said.
Not Everyone Agrees Overall
Councilwoman Chris Keefe urged caution. “People are already facing higher Sussex County and Indian River school taxes,” she noted. “This is bad timing to raise taxes just because we haven’t done it in a while.”
Instead, she recommended a long-term strategy—balancing the budget now and gradually introducing small increases over future years.
What’s Next?
With federal grant funding drying up, Mayor Dondero stressed the importance of building local financial independence. “We have to be ready to fund major projects ourselves,” she said.
The final decision on the town’s budget—and possibly its tax rate—is set for the council meeting on Friday, April 11th.
Want to keep up with what’s happening in your coastal community? Follow our blog for updates on South Bethany and more local news from Coastal Delaware’s beach towns!
Source: Coastal Point