A Dangerous Bill In The Delaware General Assembly Could Cost School Districts Millions Of Dollars!

If a certain bill goes through, look for future referenda in several school districts!

House Bill #454, sponsored by State Rep. Deb Heffernan, is a source of ire for many school districts since it was first introduced.  It would give apartment complex new developments a considerable tax break with what is called a Voluntary School Assessment.  This fee is what new developers have to pay to local school districts.  Those taxes are primarily used to fund schools.  The bill came about because one developer, Buccini/Pollen, feels their huge development in Concord Plaza will be filled with folks who normally wouldn’t have to pay school taxes.  This legislation, written by Deb Heffernan, would cause huge budget shortfalls for Brandywine School District with over $2.2 million in lost revenue should it go through.  As well, State Rep. Mike Ramone put an amendment on the bill including golf courses that will be converted to developments.  Which could cause serious budget shortfalls in the Red Clay Consolidated School District.

Brandywine’s Chief Financial Officer sent the following notice to the district residents:

Residents of Brandywine School District:

Please take a moment to see the note below from the district Chief Financial Officer, Dr. Jason Hale. HB454, if passed, this would have a SIGNIFICANT impact on the BSD tax payers – and especially at schools which are already at capacity like Hanby Elementary, Springer Middle School and Concord High School.

When developers build communities, they have a responsibility to invest in the communities in which they build and to ensure the communities in which they build remain stable.

Our schools are at capacity, additional development will greatly push the limits of our district. As a District we are working on long range plans to address the capacity issue but need the full funding from the VSA in every development now and in the future.

Our legislators should be concerned with protecting communities and taxpayers not lining the already deep pockets of wealthy developers.

June 22, 2018

Good morning. I want to update you on House Bill 454.

Brandywine School District Superintendent Dr. Mark Holodick and I had a number of conversations with the lobbyist and attorney representing the Concord Plaza developer, as well as with Brandywine School Board members, Representative Deborah Heffernan, Dept. of Education representatives, Delaware School Board Association and others.

I received a text message last evening from Mike Hoffman, the attorney representing the developer of Concord Plaza on Silverside Road and working on this bill, who stated to me that they believe they should only be paying a Voluntary School Assessment (Fee) on 12 of the 341 units being developed. This equates to roughly $85,000 of the $2.3 million assessed for this project. It goes without saying that we have different thoughts as to the application of the Voluntary School Assessment Fee.

The developer believes that the population who will live in those apartments will not use the schools and therefore they shouldn’t have to pay. Period. The law however disagrees — and has for more than 20 years. The proposed legislation that is being sponsored by Representative Heffernan will significantly impact that amount of VSA collected and will directly impact the taxpayers of the Brandywine School District, while providing relief to a developer who is building 341 apartments within our community.

Needless to say we are not in support of this legislation and feel it necessary to communicate this message to anyone who will listen in an effort to influence our legislators to vote on the side of taxpayers and not developers. Whether the calculation needs to be revised is secondary to the thought of pushing through legislation in the last week of session that will cost taxpayers in the Brandywine School District millions — and millions more in the months and years to come up and down the State of Delaware.

Jason S. Hale, Ed.D., CPA
Chief Financial Officer
Brandywine School District

Even Red Clay Superintendent Merv Daugherty felt the bill was very threatening and sent the following email to Delaware legislators:

I know HB 454 has been introduced late in this session and this bill makes changes to the VSA. VSA is the money we receive from developers when they build homes to cover the impact of additional students.  Initially, the bill did NOT apply to golf courses. Yesterday, an amendment was introduced that applies the bill to golf courses.  This is very problematic with a major the impact to schools and taxpayers.

As an example, Three Little Bakers golf course in the Linden Hill attendance zone is currently slated for about 700 homes and could be more. This means we count on approximately 350 students. Currently, the developer would pay a fee for each home and that money would be available to us when we need to build a school to accommodate those additional students or buy trailers for those students.

If this bill passes, when Three Little Bakers (or other redevelopments) happens, we will get the students but the developer will not have to pay. That means we would use operating dollars to buy/rent trailers, redo attendance zones and/or hold a major cap referendum to build an additional school.

There are certainly many advantages of redevelopment and the accompanying jobs, etc. However, that redevelopment should not come at the expense of local school districts/boards and the taxpayers who will have to foot the entire bill for the impact of the development.

As an example:

The VSA per home varies based on year and construction cost but as a basic round number of $5,000, this bill would result in a loss of over 3.5 Million dollars to Red Clay just for Three Little Bakers golf course redevelopment. This is a very conservative number and would apply to additional redevelopment.

I understand putting forth legislation that will help constituents in your own district, but all too often some legislators in Delaware fail to pass the litmus test on bills like this.  They don’t ask themselves- “Is this going to put more money in corporate pockets and wind up costing Delaware taxpayers more?” or “Will this be good for the entire state of Delaware”?  This shameless bill by Heffernan is horrible.  She should know better than to even entertain a bill like this.  For someone who is on the House Education Committee, she would certainly know what this could do to local school districts.  Another legislator from her area, Senator Harris McDowell, is the Senate co-sponsor.  Sounds like Buccini/Pollen has their hooks in these two state reps!

Rumor has it House Bill #454 will NOT appear on the House Ready List for their last day of Legislative Session, tomorrow, June 30th.  This is a “gimme bill” to developers and does not help the communities those developments will be located in.  If it comes up on the Ready List, get ready for some fireworks!  No agenda has been released for the Delaware House of Representatives.  They reconvene tomorrow at 2pm.