About Targeted Tax Cuts
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Photos: From top to bottom, County Councilmen Vance Phillips, George Cole and Dale Dukes.
GEORGETOWN -- A proposal to provide tax relief for Sussex County farmers sparked a spirited debate between Republican Councilmen Vance Phillips and George Cole over targeted tax cuts at the Tuesday, Jan. 23, 2001 Sussex County Council meeting.
County Administrator Robert L. Stickels presented a proposal on Phillips' behalf to allow county farmers to file for property tax exemptions on buildings and structures actively used in farming operations.
The credit would be expressed as a percentage of the county tax rate and the qualifying farmers' annual tax bill would reflect the credit amount based on a percentage authorized by county council each year. In years when council didn't feel it could afford the credit, the program could be rescinded.
Stickels estimated that the credit would give approximately $250,000 to $300,000 back to farmers each year based on an example provided by Eddy Parker, the county's director of assessments, that a modern chicken house assessed at $20,000 to $30,000 would receive a credit of approximately $130.
Council will consider the proposal again and take public input on Tuesday, Feb. 6, at 11 a.m.
The proposal sparked an interesting, spirited debate between council members of a Republican Party that assailed Al Gore's targeted tax cut proposals during the 2000 U.S. Presidential campaign.
Phillips and Cole sparred for 20 minutes over the value of the proposed credit, with Phillips arguing that it would help preserve some farmland and open space that county residents have expressed a desire for, and Cole saying the paltry credit would do nothing to preserve farmland or help farmers in difficult economic times.
"I understand, coming from the western side of the county, really the desperate times that the ag community is in right now," said Phillips, himself a Laurel farmer. "The poultry industry is on very shaky ground, commodity prices are at historic lows, government programs which have helped farmers sustain themselves are being threatened by certain overtures from Washington (D.C.).
"I, for one, have serious questions about channeling taxpayers' money into this effort, but it is apparent that the public in general supports the notion that government should take action to preserve farmland because it's seen as a benefit to the public at large to have open space in this county. By supporting a strong ag economy, I think this is the most fair and economical way to preserve open space. If someone wants to criticize the program in Dover (buying land development rights with tax money), here's a way that we can help the ag economy without redistributing taxpayer dollars, but rather by letting the farm economy hold onto a portion of its tax dollars."
Cole disagreed strongly, calling the program nothing more than targeted tax relief for a specific interest group in a county that he doesn't believe needs tax relief.
"There is no pressing need to be giving tax relief when we're the epitome of county governments across the nation," he said, referring to the county administration's contention that Sussex County has the lowest taxes in the nation.
"Here we are trying to give relief when there is a population that's not even asking for it. I've never had anyone say to me, 'God, the tax burden in this county is too great on me. We've got to do something now'. It's ludicrous. We're where everybody wants to get."
Phillips said such thinking belied the "depression era levels of the farm economy."
But Cole said a $130 a year tax break wouldn't save any farmer's business.
"I had a discussion with a farmer earlier," he said. "This year was a bad year for farmers. They had the greatest yields ever. When they have a dry summer they have the lowest yields. I've never had a farmer tell me they had a good year," said Cole. "Why are they farming?"
Phillips said farmers farm for their love of the land and "I think it's to everyone's benefit that they continue to farm."
Cole, responding to Stickels' question of "Do you want them to plant vinyl?", shot back, "I don't care what they do. But this little bit of tax relief isn't going to make it or break it for any farmer in this county."
Cole said the credit should be offered on all outbuildings in the county to all county taxpayers and not just targeted to the county's farmers.
"This is targeted tax relief," said Cole. "We ought to do it across the board and give everybody the benefit. We ought to exempt all outbuildings."
Stickels, however, said that type of program would result in the county giving back $1 million of taxpayer money and that the county, even with a surplus of $6 million this year and a projected surplus of $3 million next year, couldn't afford that.
Council President Dale Dukes agreed with Stickels, saying, "There will come a time when we won't have this excess. Sometimes it's as much trouble to figure out what to do with an excess as what to do about a shortfall ... We do not have bottomless pockets."
Dukes also joined Cole in his opinion on the value of the proposed credit to farmers, saying two large farmers in the county have told him that the credit wouldn't help them and that it didn't appear to be worth the county's time and effort.
In a well-intentioned but poorly designed government program, Sussex County Council listened to a proposal to provide property tax credits to the county's farmers on all buildings actively used in farming operations at its Tuesday, Jan. 23, 2001 meeting.
The proposed program, if utilized by 100 percent of the eligible farmers, would only cost the county $250,000 to $300,000 of its $6 million surplus this year and anticipated $3 million surplus next year.
But there is a principle at stake here that far outweighs the sum of the money the program would cost.
We agree with County Councilman George Cole's view that this represents the kind of targeted tax cut that will only spell trouble down the road.
In a slowing economy with the possibility of a recession looming ahead, more industries will suffer. Do we then offer those industries tax relief, as well?
We feel the county should use its surpluses to provide an across-the-board tax cut to all county taxpayers.
We don't agree with County Administrator Robert L. Stickels' assertion that the county can't afford a $1 million tax cut. If it can't afford it now, when will it ever be able to afford it? Even if we have the nation's lowest county taxes, that's still our money the county officials are hoarding. We have a right to it more than the county does.
Targeted tax cuts like the proposed Farm Building Property Tax Credit aren't the answer. Targeted tax cuts won't solve the farmers' problems and they'll be unfair to other taxpayers or ailing businesses, all of which face their own set of problems that are not always of their own making.
We think the best way Councilman Phillips can help his farming brethren is to help them continue to diversify their products and open up new markets. He's trying now with his farm product auction web site. Council helped at the Jan. 23 meeting, too, with its $107,502 grant to the University of Delaware Extension Service for expansion of extension programs and crop and poultry research.
Creativity like that, not a $130 tax credit, will help solve farmers' problems.
You're invited to voice your opinion on the proposed Farm Building County Property Tax Credit in our online discussion forum and our online poll using the links below.
Sewer Contract Adjustment ...
After some discussion, council unanimously approved a request from Assistant County Engineer Russell W. Archut to pay $18,403 to George, Miles & Buhr, the consultant on the South Coastal Regional Wastewater Facility expansion, for extra work required due to a missed deadline.
Archut said the project contractor George & Lynch would not complete the project until Feb. 6, 2001, or nearly three months after the original completion date because its supplier for screening equipment to remove debris at the head works before it enters the treatment system was late with the screen.
That caused backups in other areas of the project, Archut said, and necessitated retaining George, Miles & Buhr beyond the original contract. George, Miles & Buhr is responsible for inspecting all work on the project for the county.
When the $18,403 figure was announced, an audible gasp came up from councilmen who felt the county should not have to pay the over-run.
County Finance Director David Baker then informed council that under terms of the contract, George & Lynch was responsible for reimbursing the county for the overage and would be billed for it. County Administrator Stickels said the county also had retained money in its contract with George & Lynch that could be withheld if the company fails to pay.
Archut said that George & Lynch knows it is responsible for the cost over-run and that it was actually getting a good deal because the contract calls for liquidated damages of $700 per day. At 98 days late, the delay could have cost George & Lynch $68,600.
Stickels said he believed that George, Miles & Buhr was entitled to the extra money and that it was up to George & Lynch to try to recover the money from its supplier.
Sheriff Vehicles Approved ...
Council approved a request from Sheriff Robert Reed to purchase two new vehicles equipped with standard sheriff's equipment for $18,996 each from I.G. Burton of Milford.
The vote was 4-1 with Councilman Lynn Rogers voting no.
County Administrator Robert L. Stickels said the purchases would be within the sheriff department's budget as the county was purchasing the two vehicles to be replaced for $5,000 each. Stickels said the old vehicles will now be used by the constable's office.
Reed said the department also received a bid from Hertrich Fleet Services of $19,079 each. Stickels said one other bid came in but was disqualified because it came in after the deadline.
The vehicles to be purchased are 2001 Chevy Impalas. Reed said they have 5-Star crash ratings and will save the department $35 a month each in fuel consumption. He said the Impalas average about 28 miles per gallon and possibly higher on longer trips.
"These are excellent vehicles for the work we do," he said.
In response to a question from Councilman Rogers, Sheriff Reed said that currently only four sheriff's vehicles are operational due to the suspension of one of the vehicles' registrations in the ongoing controversy between the department and the Delaware Department of Public Safety regarding the use of red and blue flashing emergency lights on that vehicle.
The emergency lights have been removed from three other vehicles. Of the vehicle that still has lights, Sheriff Reed said, "We intend to make that operable."
The sheriff contends that a clause in the Delaware Constitution defining sheriffs as "conservators of the peace" confers police powers on sheriff's deputies and that the department should be allowed to use the emergency lights on its vehicles.
He is trying to raise money now to file a lawsuit to allow the emergency lights to be used.
Administrator's Report ...
County Administrator Robert L. Stickels announced that the county had given $107,502 to the University of Delaware Extension Service.
Council President Dale Dukes presented the check to Mark Issac, director of Extension Services for the university.
Isaac said the money would be spent as follows:
In Other Business ...
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