Newark Property Association v. State of Delaware
This text of Newark Property Association v. State of Delaware (Newark Property Association v. State of Delaware) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
NEWARK PROPERTY ASSOCIATION; DELAWARE APARTMENT ASSOCIATION; FIRST STATE MANUFACTURED HOUSING ASSOCIATION; DELAWARE HOTEL & LODGING ASSOCIATION;
Plaintiffs,
v. C.A. No. 2025-1031-LWW
STATE OF DELAWARE; MATT MEYER, Governor of the State of Delaware; MARCUS HENRY, New Castle County Executive, DAVID DEL GRANDE, Acting Chief Financial Officer of New Castle County; APPOQUINIMINK SCHOOL DISTRICT BOARD OF EDUCATION; BRANDYWINE SCHOOL DISTRICT BOARD OF EDUCATION; CHRISTINA SCHOOL DISTRICT BOARD OF EDUCATION; COLONIAL SCHOOL DISTRICT BOARD OF EDUCATION; NEW CASTLE COUNTY VOCATIONAL TECHNICAL SCHOOL DISTRICT BOARD OF EDUCATION; RED CLAY CONSOLIDATED SCHOOL DISTRICT BOARD OF EDUCATION;
Defendants.
OPINION Date Submitted: October 20, 2025 Date Decided: October 30, 2025 Ashley R. Altschuler, Kevin M. Regan, Anna F. Martin, MCDERMOTT WILL & SCHULTE LLP, Wilmington, Delaware; Paul W. Hughes, Mary H. Schnoor, Alex C. Boota, MCDERMOTT WILL & SCHULTE LLP, Washington, DC; Attorneys for Plaintiffs Max B. Walton, Michael J. Hoffman, Matthew F. Boyer, Grace E. Best, CONNOLLY GALLAGHER LLP, Newark, Delaware; Attorneys for Defendants State of Delaware and Governor Matt Meyer
Michael P. Stafford, Mary F. Dugan, Michael A. Laukaitis, II, Alpa V. Bhatia, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, Delaware; Attorneys for Defendants Appoquinimink School District Board of Education, Brandywine School District Board of Education, Christina School District Board of Education, Colonial School District Board of Education, New Castle County Vocational Technical School District Board of Education, and Red Clay Consolidated School District Board of Education
Nicholas J. Brannick, BALLARD SPAHR LLP, Wilmington, Delaware; Attorney for Defendants Marcus Henry and David Del Grande
WILL, Vice Chancellor This is a post-trial decision on a challenge to a temporary tax law. It is not
about the fairness of the recent county-wide property reassessment. That
reassessment, which led to property tax increases for many New Castle County
homeowners, was the result of a separate lawsuit before a different judge. Instead,
this case is about the Delaware General Assembly’s response to that court-ordered
reassessment.
Amid public outcry over new tax bills, the legislature passed House Bill 242
(HB242). HB242 allows New Castle County school districts to create a temporary
split-rate system, charging a higher tax rate on non-residential properties (like
apartment buildings and hotels) and a lower rate on residential properties. The law
was designed to shift a portion of the tax burden off homeowners and onto those
non-residential properties. The change is for the 2025-2026 tax year only.
The plaintiffs—associations representing non-residential property owners—
have sued to block HB242. They argue that the split-rate system is unconstitutional
and illegal on six grounds. In resolving their claims, it is not my job to decide
whether HB242 is fair or wise policy. The question before me is a legal one: does
HB242, or the way the County and school boards are implementing it, violate the
United States Constitution, the Delaware Constitution, or state statutes?
For the reasons explained below, I conclude that it does not. Judgment is
entered for the defendants on all counts.
1 I. FACTUAL BACKGROUND
The following facts were stipulated to by the parties or proven by a
preponderance of the evidence.1
A. The Public Schools Decision
For nearly forty years, New Castle County taxed properties based on its last
general reassessment in 1983.2 These assessments were static despite market
fluctuations and divergent property appreciation rates.
That long-standing practice was successfully challenged in the Court of
Chancery in 2020. In In re Delaware Public Schools Litigation, Vice Chancellor
Laster held that using decades-old property valuations for tax assessments violated
Delaware’s Uniformity Clause and True Value Statute, which require property
assessments to reflect fair market value.3 The court found that the outdated
1 Joint Statement of Undisputed Facts (Dkt. 50) (“Stipulated Facts”). Exhibits submitted by the plaintiffs are cited as “Pls.’ Ex. __.” Exhibits submitted by the defendants are cited as “Defs.’ Ex. __.” In addition to the exhibits, the parties submitted various sworn declarations and affidavits. 2 Stipulated Facts ¶ 16. The purpose of reassessment is to make a property’s assessed value more closely align with its present market value. The reassessed value is then used to calculate property taxes. Pls.’ Ex. 9 (letter to Denzil J. Hardman from Assessor Michael G. McFarlane, with attachments, dated Apr. 24, 2025 (“Tyler Report”)). 3 239 A.3d 451, 540 (Del. Ch. 2020); see Del. Const. art. VIII, § 1; 9 Del. C. § 8306(a); see also New Castle Cnty. Dep’t of Fin. v. Tchrs. Ins. & Annuity Ass’n, 669 A.2d 100, 102 (Del. 1995); supra notes 63, 199 and accompanying text. 2 assessments produced disparate effective tax rates and a “profound lack of
uniformity” even though taxpayers were charged the same uniform nominal rate.4
As a result of that ruling, New Castle County conducted its first general
reassessment in decades.5 It aimed to comply with the Public Schools decision by
valuing properties at current fair market value using a July 1, 2024 base date.6
B. The Reassessment
After a public bidding process, New Castle County retained Tyler
Technologies, Inc. to conduct the reassessment.7 Tyler relied on principles of mass
appraisal—using collective data, analytical methods, and statistical modeling—to
4 Pub. Schs., 239 A.3d at 486. A hypothetical may explain the distinction between the nominal rate and the effective rate addressed in Public Schools. Imagine two neighbors in the same school district who were both paying a 1% “nominal rate” on their 1983 assessed values. Under the prior system, they were taxed non-uniformly. One neighbor, whose home was last valued in 1983 at $100,000 and is currently worth $250,000, paid $1,000 in taxes. This means their effective tax rate (the tax paid divided by the home’s current value) was 0.4%. The other neighbor, whose home was also valued in 1983 at $100,000 but is currently worth $500,000, also paid $1,000 in taxes. This means their effective tax rate was only 0.2%. Though both neighbors paid the same nominal rate, one neighbor was paying an effective tax rate twice as high as the other. The reassessment was ordered to fix this disparity by valuing both homes at their true, current market value. 5 Stipulated Facts ¶ 16. 6 Id. ¶¶ 17, 20. 7 Id. ¶ 18. 3 assess property values.8 Consistent with the County’s directive, Tyler valued the
subject real property as of July 1, 2024.9
In mid-November 2024, Tyler mailed notices to all taxpayers with the
tentative assessed values for their properties.10 Property owners could challenge
their assessments by speaking at an informal value review hearing before the
property tax roll was certified and by filing a formal appeal to the Board of
Assessment Review.11 The deadline for filing a formal appeal was March 31, 2025.12
The newly assessed property values were effective as of July 1, 2025 for the
2026 fiscal year.13 After the reassessment, school boards across the County
calculated revised property tax rates and delivered new tax warrants to the New
Castle County Office of Finance.14 The County then mailed school district and
8 Id. ¶ 19.
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
NEWARK PROPERTY ASSOCIATION; DELAWARE APARTMENT ASSOCIATION; FIRST STATE MANUFACTURED HOUSING ASSOCIATION; DELAWARE HOTEL & LODGING ASSOCIATION;
Plaintiffs,
v. C.A. No. 2025-1031-LWW
STATE OF DELAWARE; MATT MEYER, Governor of the State of Delaware; MARCUS HENRY, New Castle County Executive, DAVID DEL GRANDE, Acting Chief Financial Officer of New Castle County; APPOQUINIMINK SCHOOL DISTRICT BOARD OF EDUCATION; BRANDYWINE SCHOOL DISTRICT BOARD OF EDUCATION; CHRISTINA SCHOOL DISTRICT BOARD OF EDUCATION; COLONIAL SCHOOL DISTRICT BOARD OF EDUCATION; NEW CASTLE COUNTY VOCATIONAL TECHNICAL SCHOOL DISTRICT BOARD OF EDUCATION; RED CLAY CONSOLIDATED SCHOOL DISTRICT BOARD OF EDUCATION;
Defendants.
OPINION Date Submitted: October 20, 2025 Date Decided: October 30, 2025 Ashley R. Altschuler, Kevin M. Regan, Anna F. Martin, MCDERMOTT WILL & SCHULTE LLP, Wilmington, Delaware; Paul W. Hughes, Mary H. Schnoor, Alex C. Boota, MCDERMOTT WILL & SCHULTE LLP, Washington, DC; Attorneys for Plaintiffs Max B. Walton, Michael J. Hoffman, Matthew F. Boyer, Grace E. Best, CONNOLLY GALLAGHER LLP, Newark, Delaware; Attorneys for Defendants State of Delaware and Governor Matt Meyer
Michael P. Stafford, Mary F. Dugan, Michael A. Laukaitis, II, Alpa V. Bhatia, YOUNG CONAWAY STARGATT & TAYLOR, LLP, Wilmington, Delaware; Attorneys for Defendants Appoquinimink School District Board of Education, Brandywine School District Board of Education, Christina School District Board of Education, Colonial School District Board of Education, New Castle County Vocational Technical School District Board of Education, and Red Clay Consolidated School District Board of Education
Nicholas J. Brannick, BALLARD SPAHR LLP, Wilmington, Delaware; Attorney for Defendants Marcus Henry and David Del Grande
WILL, Vice Chancellor This is a post-trial decision on a challenge to a temporary tax law. It is not
about the fairness of the recent county-wide property reassessment. That
reassessment, which led to property tax increases for many New Castle County
homeowners, was the result of a separate lawsuit before a different judge. Instead,
this case is about the Delaware General Assembly’s response to that court-ordered
reassessment.
Amid public outcry over new tax bills, the legislature passed House Bill 242
(HB242). HB242 allows New Castle County school districts to create a temporary
split-rate system, charging a higher tax rate on non-residential properties (like
apartment buildings and hotels) and a lower rate on residential properties. The law
was designed to shift a portion of the tax burden off homeowners and onto those
non-residential properties. The change is for the 2025-2026 tax year only.
The plaintiffs—associations representing non-residential property owners—
have sued to block HB242. They argue that the split-rate system is unconstitutional
and illegal on six grounds. In resolving their claims, it is not my job to decide
whether HB242 is fair or wise policy. The question before me is a legal one: does
HB242, or the way the County and school boards are implementing it, violate the
United States Constitution, the Delaware Constitution, or state statutes?
For the reasons explained below, I conclude that it does not. Judgment is
entered for the defendants on all counts.
1 I. FACTUAL BACKGROUND
The following facts were stipulated to by the parties or proven by a
preponderance of the evidence.1
A. The Public Schools Decision
For nearly forty years, New Castle County taxed properties based on its last
general reassessment in 1983.2 These assessments were static despite market
fluctuations and divergent property appreciation rates.
That long-standing practice was successfully challenged in the Court of
Chancery in 2020. In In re Delaware Public Schools Litigation, Vice Chancellor
Laster held that using decades-old property valuations for tax assessments violated
Delaware’s Uniformity Clause and True Value Statute, which require property
assessments to reflect fair market value.3 The court found that the outdated
1 Joint Statement of Undisputed Facts (Dkt. 50) (“Stipulated Facts”). Exhibits submitted by the plaintiffs are cited as “Pls.’ Ex. __.” Exhibits submitted by the defendants are cited as “Defs.’ Ex. __.” In addition to the exhibits, the parties submitted various sworn declarations and affidavits. 2 Stipulated Facts ¶ 16. The purpose of reassessment is to make a property’s assessed value more closely align with its present market value. The reassessed value is then used to calculate property taxes. Pls.’ Ex. 9 (letter to Denzil J. Hardman from Assessor Michael G. McFarlane, with attachments, dated Apr. 24, 2025 (“Tyler Report”)). 3 239 A.3d 451, 540 (Del. Ch. 2020); see Del. Const. art. VIII, § 1; 9 Del. C. § 8306(a); see also New Castle Cnty. Dep’t of Fin. v. Tchrs. Ins. & Annuity Ass’n, 669 A.2d 100, 102 (Del. 1995); supra notes 63, 199 and accompanying text. 2 assessments produced disparate effective tax rates and a “profound lack of
uniformity” even though taxpayers were charged the same uniform nominal rate.4
As a result of that ruling, New Castle County conducted its first general
reassessment in decades.5 It aimed to comply with the Public Schools decision by
valuing properties at current fair market value using a July 1, 2024 base date.6
B. The Reassessment
After a public bidding process, New Castle County retained Tyler
Technologies, Inc. to conduct the reassessment.7 Tyler relied on principles of mass
appraisal—using collective data, analytical methods, and statistical modeling—to
4 Pub. Schs., 239 A.3d at 486. A hypothetical may explain the distinction between the nominal rate and the effective rate addressed in Public Schools. Imagine two neighbors in the same school district who were both paying a 1% “nominal rate” on their 1983 assessed values. Under the prior system, they were taxed non-uniformly. One neighbor, whose home was last valued in 1983 at $100,000 and is currently worth $250,000, paid $1,000 in taxes. This means their effective tax rate (the tax paid divided by the home’s current value) was 0.4%. The other neighbor, whose home was also valued in 1983 at $100,000 but is currently worth $500,000, also paid $1,000 in taxes. This means their effective tax rate was only 0.2%. Though both neighbors paid the same nominal rate, one neighbor was paying an effective tax rate twice as high as the other. The reassessment was ordered to fix this disparity by valuing both homes at their true, current market value. 5 Stipulated Facts ¶ 16. 6 Id. ¶¶ 17, 20. 7 Id. ¶ 18. 3 assess property values.8 Consistent with the County’s directive, Tyler valued the
subject real property as of July 1, 2024.9
In mid-November 2024, Tyler mailed notices to all taxpayers with the
tentative assessed values for their properties.10 Property owners could challenge
their assessments by speaking at an informal value review hearing before the
property tax roll was certified and by filing a formal appeal to the Board of
Assessment Review.11 The deadline for filing a formal appeal was March 31, 2025.12
The newly assessed property values were effective as of July 1, 2025 for the
2026 fiscal year.13 After the reassessment, school boards across the County
calculated revised property tax rates and delivered new tax warrants to the New
Castle County Office of Finance.14 The County then mailed school district and
8 Id. ¶ 19. These principles have been codified by the International Association of Assessing Officers’ (IAAO) Standard on Mass Appraisal of Real Property. Id. 9 Id. ¶ 20. 10 Id. ¶ 22. 11 Id. ¶¶ 23-24. 12 Id. ¶ 24. 13 Id. ¶ 25. 14 Id. ¶¶ 26, 28. 4 property tax bills to taxpayers during the week of July 21.15 An initial September
30, 2025 payment deadline was later extended to November 30.16
C. The Reassessment’s Effects
The reassessment was intended to correct a decades-long imbalance.
Residential properties, which had appreciated faster than other real estate, were
under-assessed.17 Correcting this disparity required a larger upward adjustment to
residential property values, which in turn increased residential property owners’ total
share of the County’s overall tax base. The residential share of the New Castle
County tax base increased from 65.87% to 75.52%, and the non-residential share
correspondingly decreased from 34.13% to 24.48%.18 This shift resulted in
substantial tax increases for many single-family homeowners.
Although many commercial properties saw their tax burden decrease, the
effect was uneven across non-residential properties more broadly. Multi-family
15 Id. ¶ 29. The bills covered tax obligations from July 1, 2025 through June 30, 2026, reflecting the new assessed values and corresponding tax rates. Id. ¶¶ 30-31. 16 Id. ¶¶ 32-33, 53. 17 Pls.’ Ex. 1 (Expert Report of Norman Miller, Ph.D., dated Oct. 7, 2025) (“Miller Report”) ¶¶ 19-20. 18 See Decl. of David Del Grande (Dkt. 55) ¶ 5. 5 apartment buildings in particular experienced dramatic increases in their assessed
values and tax liabilities due to their strong market performance.19
D. HB242
On August 12, 2025, facing public outcry over increased property taxes from
the reassessment, the Delaware General Assembly convened a special one-day
session.20 The legislature bypassed ordinary committee procedures and passed
House Bill 242 (HB242), titled “An Act Relating to Local School Taxes in the 2025-
2026 School Year.”21 HB242 authorized school districts to create a dual-rate tax
system for the 2025-2026 tax year only.
The legislation was designed to temporarily shift a portion of the tax burden
from residential to non-residential property owners by allowing school boards to
establish different (and heightened) tax rates for non-residential properties relative
to residential ones.22 Under New Castle County’s classification system, “non-
19 Miller Report ¶¶ 45-47; see also id. ¶¶ 23-25 (explaining that, under the new tax bills, the non-residential rates are “between 62% and 99% higher than the residential rates”). 20 Stipulated Facts ¶ 33. 21 Del. H.B. 242, 153d Gen. Assem. (2025) (“An Act Relating to Local School Taxes in the 2025-2026 Tax Year”) (HB242); Stipulated Facts ¶ 34; supra note 40 (quoting HB242 in full). HB242 passed in the House by a 30-8 vote, passed in the Senate by a vote of 14 yes, four abstentions, and three absent, and was signed into law by Governor Meyer on August 12. See Transmittal Aff. of Grace Best (Dkt. 59) Ex. A. 22 Stipulated Facts ¶ 35; see also id. ¶¶ 106-19 (describing New Castle County’s implementation process). 6 residential” property includes apartment buildings with five or more units, hotels,
motels, and the land underlying manufactured home communities.23 “Residential”
property is that “classified as either Residential or Farmland” in the County’s parcel
records.24 School districts were required to deliver new tax warrants within ten
business days, and the County was authorized to issue revised tax bills with the
changes.25
Acting under HB242, every New Castle County school district promptly
established a split-rate system for the 2025-2026 tax year that applied different tax
rates for residential and non-residential properties.26 They increased the tax rates for
non-residential properties—by percentages ranging from 35% to 80%—while
lowering tax rates for residential properties.27 As a result, tax rates for
non-residential properties became higher than residential rates for homes. The gap,
23 Id. ¶¶ 56, 117-18. 24 Id. ¶ 107 (quoting Substitute No. 1 to New Castle County Ordinance No. 25-048). 25 Id. ¶¶ 36-37. 26 Id. ¶¶ 38-51. 27 See id. ¶¶ 38-49 (detailing the specific rate changes for each school district). For example, the Brandywine School District Board of Education raised the tax rate for non-residential properties from $0.6661 per hundred dollars of assessed value to $1.0382. Id. ¶ 41. At the same time, it lowered the tax rate for residential properties from $0.6661 per hundred dollars to $0.5609 per hundred dollars. Id. ¶ 40. 7 while meaningful, did not exceed HB242’s limit on the non-residential tax rate,
which could be no more than double the residential rate.28
E. This Litigation
On September 12, 2025, four nonprofit organizations representing
non-residential New Castle County property owners filed this lawsuit.29 The
associations are suing the State of Delaware, Governor Matt Meyer, two New Castle
County officials, and six New Castle County school boards (the “School Boards”).30
The plaintiffs claim that HB242 is invalid because it is “regressive” and unlawfully
shifts the tax burden from homeowners onto lower-income renters and residents of
manufactured homes.31 The plaintiffs believe that implementing HB242 will cause
28 Id. ¶ 52. 29 Verified Compl. for Decl. and Inj. Relief (Dkt. 1). The plaintiffs are Newark Property Association, Delaware Apartment Association, First State Manufactured Housing Association, and Delaware Hotel & Lodging Association. Stipulated Facts ¶¶ 2-5. 30 The New Castle County officials named as defendants are Marcus Henry, the County Executive, and David Del Grande, the County’s Acting Chief Financial Officer. Stipulated Facts ¶¶ 6-9. The School Board defendants are: Appoquinimink School District Board of Education, Brandywine School District Board of Education, Christina School District Board of Education, Colonial School District Board of Education, New Castle County Vocational Technical School District Board of Education, and Red Clay Consolidated School District Board of Education. Id. ¶¶ 10-15. 31 Verified Am. and Suppl. Compl. (Dkt. 73) (“Am. Compl.”) ¶ 1. 8 “irreparable harm,” leaving them unable to pay their property taxes and risking
foreclosure and business disruption.32
The plaintiffs moved to expedite this case and for a temporary restraining
order enjoining the implementation of HB242.33 The defendants opposed the
motion, framing HB242 as a legitimate policy response to the reassessment’s
unforeseen shift in property taxes from non-residential to residential properties.34
During a hearing on the motions, I committed to resolve the case by October 30 so
that property tax bills could be timely issued. The defendants agreed not to
implement HB242 (or issue new tax bills) in the meantime.35
Expedited discovery ensued. In a written discovery response, the defendants
acknowledged that certain properties had been misclassified as residential or
non-residential.36 They explained that the County had “begun a process of manually
verifying and correcting” the errors, which would result in some reclassification.37
32 Id. ¶¶ 11-14. 33 Pls.’ Mot. for TRO (Dkt. 2). 34 Defs.’ Answering Br. in Opp’n. to Pls.’ Mot. for TRO (Dkt. 27). The parties stipulated that the defendants were “deemed to have complied with their obligation to respond to their Complaint” by filing their answering brief in opposition to the plaintiffs’ motion for a temporary restraining order. See Stipulation and Initial Scheduling Order (Dkt. 32). 35 See Tr. of Hr’g on Pls.’ Mot. for TRO (Dkt. 37); Stipulation and Initial Scheduling Order (Dkt. 32); see also Stipulation and Order Governing Case Schedule (Dkt. 34). 36 Mot. for Leave to File Am. and Suppl. Verified Compl. (Dkt. 40) ¶¶ 19, 32. 37 Id. ¶¶ 19, 20, 32 (quoting Defs.’ Resp. to Pls.’ Interrog. 1 ¶ 23). 9 On October 14, the plaintiffs filed an Amended and Supplemental Complaint that
added related claims.38
The parties each filed opening and answering pre-trial briefs.39 They
submitted a largely stipulated record, supplemented by declarations and expert
reports. A trial on a paper record was held on October 20, at which point the matter
was submitted for decision.
II. LEGAL ANALYSIS
The plaintiffs take issue with the enactment and implementation of HB242,
which provides a temporary, one-year split-rate tax system for New Castle County
school districts.40 They challenge HB242 on six grounds:
38 See supra note 31. The plaintiffs also sought additional discovery on the reclassification. See Mot. to Am. Case Scheduling Order to Permit Limited Additional Disc. (Dkt. 41). I granted that motion in part. Order Granting Motion in Part (Dkt. 72). 39 See Pls.’ Opening Br. (Dkt. 51); Defs.’ Opening Br. for Final Hr’g on the Merits (Dkt. 53) (“Defs.’ Opening Br.”); Pls.’ Answering Br. (Dkt. 89); Defs.’ Answering Br. for Final Hr’g on the Merits (Dkt. 91) (“Defs.’ Answering Br.”). 40 The full text of HB242 provides: Section 1. Notwithstanding any provision of law to the contrary, on enactment of this Act: (1) The school board of a school district located entirely in New Castle County may, for the 2025-2026 school tax year, reset the local school tax rate using a residential and a non-residential tax rate. The non-residential tax rate must be at least equal to the residential tax rate and may not be more than 2 times the residential tax rate. The total amount of revenue projected to be collected through use of the residential and non-residential tax rates may not exceed the total amount of revenue the district was projected to collect under its original 2025-2026 tax warrant.
10 • Count I: Uniformity Clause. The plaintiffs claim that HB242 violates the Uniformity Clause of the Delaware Constitution.41
• Count II: Prohibition on Retroactive Taxes. The plaintiffs claim that HB242 violates Delaware’s constitutional prohibition on retroactive personal income taxes.42
• Count III: Improper Tax Rate Procedure. The plaintiffs claim that the School Boards violated Delaware statutes by implementing new tax rates without a voter referendum.43
(2) New tax rates approved by a school district under this Act must be reported to the County and delivered with a new warrant not later than 10 business days from the effective date of this Act. (3) Upon receipt of a new warrant under paragraph (2) of this Act, New Castle County shall supplement any tax bill already issued to taxpayers in that district for the 2025-2026 tax year and adjust initial billing using the new local school tax rates set by the district. New Castle County shall extend the deadline for payment of property tax bills for the 2025-2026 tax year that are supplemented or adjusted under this Act to November 30, 2025. (4) If a taxpayer submits payment prior to an adjustment in billing under paragraph (3) of this Act, and the taxpayer’s school tax bill is adjusted downward, New Castle County shall credit the overpayment against future school tax liability, unless a taxpayer submits a written request for refund of overpayment to New Castle County, in which case New Castle County shall issue a refund. (5) If a school district resets the school district’s tax rates in accordance with this Act and a cash flow shortfall of local school funds occurs due to the extension of the deadline for tax payments for the 2025- 2026 school tax year, the school district may request, and the State may advance, monies from State Division I funds. 41 Am Compl. ¶¶ 180-88. 42 Id. ¶¶ 189-98. 43 Id. ¶¶ 199-207. 11 • Count IV: Violation of Fair Market Value Assessment. The plaintiffs claim that the School Boards violated a statutory requirement that property be assessed at its fair market value.44
• Count V: Violation of HB242’s Own Terms. The plaintiffs claim that the defendants violated HB242 by projecting to collect more revenue than permitted under the original 2025-2026 tax warrants, and by failing to report the new rates and deliver warrants within the required ten business day period.45
• Count VI: Due Process Violation. The plaintiffs claim that the defendants’ “post-hoc reclassifications” of properties violates the Due Process Clause of the Fourteenth Amendment of the United States Constitution.46
As relief, the plaintiffs seek declaratory judgments that HB242 and its
implementation are unlawful, and an injunction barring the defendants from issuing
new split-rate tax bills or imposing property reclassifications.47
The claims fall into two overarching categories: (1) constitutional claims, and
(2) statutory or ultra vires claims.48 The first set of claims includes Counts I, II, and
VI, in which the plaintiffs argue that HB242 is invalid under the Delaware and
United States Constitutions. In the second set, which includes Counts III, IV, and
44 Id. ¶¶ 208-18. 45 Id. ¶¶ 219-27. 46 Id. ¶¶ 228-37. 47 Id. at 50-51. 48 Ultra vires means an act or a decision made by a person, a government agency, or an entity that is outside the scope of the legal authority or power granted to them. See Ultra Vires, Black’s Law Dictionary (12th ed. 2024). 12 V, they argue that the defendants violated the plain terms of Delaware statutes they
were charged with upholding. I consider each category in turn and conclude that
none of the claims have merit.
A. The Constitutional Claims (Counts I, II, and VI)
The plaintiffs’ constitutional claims present both facial and as-applied
challenges to HB242. For the facial challenges, they bear the heavy burden of
proving that the challenged statute “cannot be valid under any set of
circumstances.”49 “[I]f a law can be applied in a way consistent with [c]onstitutional
strictures, it will be upheld.”50
The standard is different for the as-applied challenges. The plaintiffs must
demonstrate that HB242, as applied to them, violates a constitutional right. The
focus is on the law’s effect on the plaintiffs, not its general operation.51 But the
49 Republican State Comm. of Del. v. Dep’t of Elections, 250 A.3d 911, 916 (Del. Ch. 2020) (quoting Sierra v. Dep’t of Servs. for Child., Youth & Their Fams., 238 A.3d 142, 156 (Del. 2020)). 50 League of Women Voters of Del., Inc. v. Del. Dep’t of Elections, 250 A.3d 922, 937 (Del. Ch. 2020) (commenting that a facial challenge to the constitutionality of legislation “invokes broad judicial deference”). 51 See id. (“An at-issue challenge . . . is based on exigencies; it asks the [c]ourt to withhold enforcement of a statute on the ground that existing circumstances will render its enforcement against the plaintiff unconstitutional. This can be true regardless of whether the law in question is facially constitutional.”); Del. Bd. of Med. Licensure & Discipline v. Grossinger, 224 A.3d 939, 956 (Del. 2020). 13 burden is still a heavy one, requiring the plaintiffs to show the statute’s application
to them lacks any reasonable or lawful basis.52
Enactments of the General Assembly are presumed to be constitutional—a
presumption that is rebuttable by “clear and convincing evidence.”53 The court must
afford “great weight” to the General Assembly’s articulation of public policy and
give deference to legislative judgment in matters that are “fairly debatable.”54 It is
not my role to “judge the wisdom, fairness, or logic of legislative choices.”55 I must,
instead, apply a form of rational basis review where the “legislation enjoys a
presumption of validity,” and the plaintiffs must “negate every conceivable
justification for the classification” to prevail.56
Settled principles guide my analysis of constitutional claims, which begins
with the text.57 “When a constitutional provision is unambiguous,” Delaware courts
52 See 16 C.J.S. Constitutional Law § 243, Westlaw (database updated June 2025). 53 Republican State Comm., 250 A.3d at 916 (quoting Sierra, 238 A.3d at 155-56). 54 Higgin v. Albence, 2022 WL 4239590, at *15 (Del. Ch. Sept. 14, 2022), aff’d in part, rev’d in part on other grounds, 295 A.3d 1065 (Del. 2022); Helman v. State, 784 A.2d 1058, 1068 (Del. 2001). 55 Salem Church (Del.) Assocs. v. New Castle Cnty., 2006 WL 2873745, at *15 (Del. Ch. Oct. 6, 2006) (quoting F.C.C. v. Beach Comms., Inc., 508 U.S. 307, 313 (1993)). 56 Port Penn Hunting Lodge Ass’n v. Meyer, 2019 WL 2077600, at *6 (Del. Ch. May 9, 2019) (citation omitted), aff’d, 222 A.3d 1044 (Del. 2019). 57 In re Request of Governor for Advisory Op., 950 A.2d 651, 653 (Del. 2008) (explaining that a constitutional analysis “begins with that provision’s language itself”). 14 “rely on its plain language.”58 “In that circumstance, the role of the judiciary is
limited to giving that language its literal effect.”59
1. The Uniformity Clause (Count I)
The plaintiffs first argue that HB242—on its face and as applied to them—
violates Article VIII, Section 1 of the Delaware Constitution, known as the
Uniformity Clause.60 For the facial challenge,61 they assert that taxation of
residential and non-residential properties at vastly different rates contravenes the
Uniformity Clause. For the as-applied challenge,62 they contend that HB242 violates
the Uniformity Clause as to them and as implemented by the defendants. I address
first the facial challenge, then the as-applied challenge, and reject both.
a. The Facial Challenge
The Uniformity Clause states: “All taxes shall be uniform upon the same class
of subjects within the territorial limits of the authority levying the tax, except as
58 Op. of the Justs., 274 A.3d 269, 272 (Del. 2022) (citing Capriglione v. State ex rel. Jennings, 279 A.3d 803, 806 (Del. 2021)). 59 Korn v. New Castle Cnty., 2005 WL 2266590, at *6 (Del. Ch. Sept. 13, 2005); see also U.S. v. Sprague, 282 U.S. 716, 731 (1931) (stating that “[t]he Constitution was written to be understood by the voters; its words and phrases were used in their normal and ordinary as distinguished from technical meaning”). 60 Del. Const. art. VIII, § 1. 61 See supra notes 49-50 and accompanying text (explaining that a facial challenger asserts that a law is unconstitutional in all its applications). 62 See supra notes 51-52 and accompanying text (explaining the standard for an as-applied challenge). 15 otherwise permitted herein.”63 The clause ensures that taxpayers within a certain
class of subjects are not treated differently.64 It “should be construed in the light of
the fundamental principle . . . it embodies,” which requires a “uniform and equal
distribution of the tax burden among the taxpayers upon whom the tax is imposed.”65
Put simply, “[u]niformity of taxation means equality of tax burden.”66
The plaintiffs’ focus is on the phrase “except as otherwise permitted herein”
at the end of the Uniformity Clause.67 The phrase was added in a 1977 amendment,
along with specific permissions for agricultural land valuation and local
exemptions.68 In the plaintiffs’ view, the text sets categorical and narrow grounds
under which non-uniform real property taxation is constitutional, implying that all
other sub-classifications of real property for differential tax rates are prohibited.69
63 Del. Const. art. VIII, § 1. 64 See Brennan v. Black, 104 A.2d 777, 784 (Del. 1954) (stating that the purpose of the provision is to maintain uniformity within “the same class of subjects within the territorial limits of the authority levying the tax”). 65 In re Zoller’s Est., 171 A.2d 375, 379-80 (Del. 1961). 66 Id. at 380 (citation omitted). 67 See Pls.’ Opening Br. 40. 68 Defs.’ Ex. L (1 Wade J. Newhouse, Constitutional Uniformity and Equality in State Taxation (2d Ed. 1984)) 173. 69 Pls.’ Answering Br. 32-33 (citing the doctrine of expression unius est exclusion alterius). This doctrine is translated as “the expression of one thing is the exclusion of another.” It suggests that when a list exists, the exclusion of a certain item is deliberate. See Brown v. State, 36 A.3d 321, 325 (Del. 2012); see also Leatherbury v. Greenspun, 939 A.2d 1284, 1291 (Del. 2007) (“[I]t is well established that a court may not engraft upon a statute language which has clearly been excluded therefrom.” (citation omitted)). 16 They assert that since none of these exceptions authorizes the residential/non-
residential split adopted by HB242, the statute violates the Uniformity Clause as
amended.
The plaintiffs’ reading, however, overlooks that the Uniformity Clause
demands tax uniformity “upon the same class of subjects.”70 This language does not
forbid classification; it presumes it. The prohibition is on discrimination within a
given class.71 The central question, then, is whether the classification chosen by the
legislature is permissible under the Uniformity Clause.
i. Subject Classes Generally
The crux of the plaintiffs’ facial challenge is that the sole constitutionally
permissible “class of subjects” is all real property within the taxing district.72 Under
this view, any legislative attempt to sub-classify real property—such as the
residential and non-residential distinction in HB242—violates the Uniformity
Clause, regardless of its reasonableness. I disagree.
70 Del. Const. art. VIII, § 1 (emphasis added); see also Defs.’ Ex. Y (1 Wade J. Newhouse, Constitutional Uniformity and Equality in State Taxation (2d Ed. 1984)) 1899 (stating that Delaware is among the states with the “most permissive effective uniformity limitation,” such that “there is no requirement of universality and property may be classified for application of different effect rates”). 71 See, e.g., Brennan, 104 A.2d at 797. 72 Pls.’ Opening Br. 32-34. 17 Although the Uniformity Clause requires the same tax rate for all taxpayers
within a category, it does not bar the legislature from drawing rational lines to
establish different taxpayer classes. Delaware courts have long recognized that
“under the language of [the Uniformity Clause] . . . the legislature has the right to
classify property for the purpose of taxation.”73 As Justice Holland’s eponymous
book on the Delaware Constitution observed, classifications based on “inherent
differences in the nature, character, or use of real property within the same territorial
limits may result in different tax classifications.”74
The test of constitutionality under the Uniformity Clause is not whether the
legislature has classified real property, but “the reasonableness of the
classification.”75 “[T]here is . . . no fixed standard by which the reasonableness of
[a] classification can be measured.”76 “[E]ach case must stand upon its own
73 Phila., B. & W. R. Co. v. Mayor & Council of Wilm., 57 A.2d 759, 765-66 (Del. Ch. 1948) (citing 1 Cooley on Taxation § 292, which states that, if a constitutional provision “provides that taxes shall be uniform upon the ‘same class’ of subjects, then, of course, different rates may be fixed for different classes, provided the classification is not purely arbitrary”). 74 Randy J. Holland, The Delaware State Constitution 233 (2d ed. 2017); see also Phila., B. & W. R., 57 A.2d at 765 (observing that classifications based on “inherent differences” in the nature, character, or use of real property are “sufficient” to draw classifications between property types and endorsing the idea that lands used for agricultural purposes can be taxed at a lower rate than other property within a municipality). 75 Wilm. Med. Ctr., Inc. v. Bradford, 382 A.2d 1338, 1344 (Del. 1978). 76 Conard v. State, 16 A.2d 121, 125 (Del. Super. 1940). 18 particular facts.”77 “[A] classification will be held valid if the court is able to see
that the [l]egislature could regard it as reasonable and proper without doing violence
to common sense.”78 The classification set by the legislature will not be disturbed
“unless the statute is clearly arbitrary.”79
ii. The Classes in HB242
As a matter of policy, I presume that HB242 is constitutional.80 “The
existence of facts to support the classification of the legislature must be assumed if
any set of facts can reasonably be conceived which will sustain such
classification.”81 In passing HB242, the legislature chose to “reset the local school
tax rate using a residential and a non-residential tax rate.”82 Nothing in the record
suggests that the General Assembly’s differentiation of residential and
non-residential classes was unreasonable or arbitrary.
77 Id. 78 Id. (stating that a classification is not arbitrary when it is “based on reason”); see also Betts v. Zeller, 263 A.2d 290, 293 (Del. 1970) (citing Allied Stores of Ohio, Inc. v. Bowers, 358 U.S. 522 (1959) and Madden v. Commonwealth of Ky., 309 U.S. 83, 87-88 (1940), where the United States Supreme Court described the “broad discretion as to classification possessed by a legislature in the field of taxation”). 79 Aetna Cas. & Sur. Co. v. Smith, 131 A.2d 168, 177-78 (Del. 1957). 80 See id.; Helman, 784 A.2d at 1068 (“Courts are not super-legislatures and it is not a proper judicial function to decide what is or is not wise legislative policy.”). 81 Aetna Cas., 131 A.2d at 177. 82 HB242 § 1(1). 19 HB242 was passed in response to the 2025 reassessment, which shifted an
unanticipated tax burden onto residential properties.83 Legislators were concerned
about the hardship placed on homeowners and viewed companies as better
positioned to absorb a one-time higher tax bill.84 These equitable concerns
motivated the legislature to enact HB242 to mitigate the initial hardship on
homeowners.85 These are rational reasons to distinguish between residential and
non-residential properties.86
83 Pls.’ Ex. 69 (Excerpt of August 21, 2025 Christina School District Board of Education Special Meeting) 3-4; supra note 18 (discussing the changes in tax burden); Aff. of Rep. Kimberly Williams ¶ 6. 84 See Defs.’ Ex. J (Transcript, August 12, 2025 Special Legislative Session) 171 (remarking “when you have Amazon paying $3.5 million in taxes and it’s being reduced to $1.1 million, there is a problem”); id. at 172 (discussing the $39 shift in tax burden from commercial to residential properties between 2024 and 2025); Lockman Aff. ¶¶ 10-11 (stating that “[b]usiness entities owning commercial property are better equipped to bear the costs associated with the tax increase”). It is left to the non-residential property owners whether they pass these costs onto renters or customers. 85 Pls.’ Ex. 69 at 18-19. A member of the Christina School District Board remarked: “I’d like to stress that this power is not permanent. So, the state legislature gave us this power for this year. We know that this is not the ultimate solution that we’re all looking for, for school funding, and we’re going to need to continue to work, to continue to fight to get a much better solution.” Id. 86 HB242 also includes a safeguard that caps the non-residential rate at two times the residential rate. HB242 § 1(1). This limiting principle helps ensure that the classification does not become arbitrary or unreasonable. 20 iii. The Public Schools Decision
The plaintiffs insist that the Public Schools decision, which catalyzed the
reassessment, compels the resolution of Count I in their favor.87 They read the
decision as holding that a Uniformity Clause violation occurs whenever “effective
tax rate[s]” differ across property categories, citing the court’s discussion of non-
uniformity “between commercial and residential property.”88 The plaintiffs argue
that because HB242 explicitly creates different nominal tax rates leading to different
effective tax rates for residential and non-residential properties, it replicates the
constitutional violation identified in Public Schools.89
The plaintiffs wrongly conflate the cause of the constitutional violation in
Public Schools with the legislation at issue here. Public Schools addressed the
unconstitutionality of using stale property assessments (valuations) that failed to
uniformly reflect fair market value.90 The resulting disparity in effective tax rates,
despite a uniform nominal rate, was the symptom of that underlying assessment
87 See Pls.’ Opening Br. 44-50; Pls.’ Answering Br. 37-40; see generally Pub. Schs., 239 A.3d 451. 88 Pls.’ Opening Br. 44, 46 (quoting Pub. Schs., 239 A.3d at 487, 496-97); see Tr. of Oct. 20, 2025 Trial (Dkt. 110) (“Trial Tr.”) 36-37; see also Pls.’ Answering Br. 2, 37. 89 See Pls.’ Opening Br. 48-50. 90 Pub. Schs., 239 A.3d at 464, 485-86. 21 problem.91 The constitutional infirmity was the flawed and non-uniform assessment
methodology itself.92 The remedy ordered in Public Schools—a general
reassessment—was aimed at fixing the disparate valuations by bringing them into
line with current fair market value across properties.
This case concerns a different issue: whether the General Assembly, operating
on the foundation of the reassessment ordered by Public Schools, can
constitutionally classify real property and apply different nominal tax rates to those
classes.93 Public Schools, which focused on achieving uniformity through accurate
assessments under a single rate structure, cannot fairly be read to prohibit the
legislature’s power to classify property for rate-setting purposes once a uniform
assessment methodology is in place. The court did not hold that the Uniformity
Clause bars the legislature from establishing different nominal tax rates for
reasonably distinct classes of property once the properties’ values were reassessed.
And it did not limit the legislature’s authority to create different property
classifications and apply different tax rates based on uniform assessments.
91 Id. at 486 (“The counties have used the same assessed values for so long that taxpayers . . . experience quite different effective rates of taxation . . . . The underlying assessed values diverge from present fair market value to such a degree that the reality is a profound lack of uniformity.”); see supra note 4 (providing a hypothetical to explain this holding). 92 Pub. Schs., 239 A.3d at 496. 93 See Defs.’ Opening Br. 17-18, 31-39 (making this argument); Defs.’ Answering Br. 23-24 (same). 22 iv. Pennsylvania Law
Finally, the plaintiffs cite Pennsylvania case law to support their construction
of the Uniformity Clause as prohibiting classifications.94 They accurately note that
Delaware’s Uniformity Clause was copied from the Pennsylvania Constitution, a
textual similarity and linkage acknowledged by Delaware courts.95 The plaintiffs
highlight this historical reliance on Pennsylvania law as evidence that Pennsylvania
interpretations should carry significant weight when construing Delaware’s identical
clause.96 Following this logic, the plaintiffs contend that modern Pennsylvania
precedent viewing real property as a single class shows that HB242 is facially
unconstitutional.97
Delaware courts have, however, taken a different approach from Pennsylvania
and consistently interpreted our Uniformity Clause to permit the reasonable
94 Pls.’ Opening Br. 33-34. 95 Id. at 35; see Zoller’s Est., 171 A.2d at 379-80 (addressing territorial uniformity). 96 See Pls.’ Opening Br. 35-36; Pls.’ Answering Br. 28-29. 97 See Pls.’ Opening Br. 36-37 (citing Pennsylvania cases); Valley Forge Towers Apartments N, LP v. Upper Merion Area Sch. Dist., 163 A.3d 962, 975 (Pa. 2017) (commenting that “all property in a taxing district is a single class[,]” meaning that the government cannot “treat different property subclassifications in a disparate manner”); Downington Area Sch. Dist. v. Chester Cnty. Bd. of Assessment Appeals, 913 A.2d 194, 199 (Pa. 2006) (stating that “all properties in the relevant taxing district are comparable properties” under Pennsylvania’s Uniformity Clause). 23 classification of real property for taxation purposes.98 As the defendants highlight,
Pennsylvania shifted to its stricter interpretation of the Uniformity Clause decades
after Delaware’s adoption.99 The uneven evolution of jurisprudence in a sister state
does not override Delaware courts’ steady interpretation of our Constitution as
permitting reasonable classification.
b. The As-Applied Challenge
The plaintiffs argue that even if HB242 is facially valid, it is unconstitutional
“as applied by the School Board[s].”100 This theory focuses on the law’s
implementation: whether the defendants’ “arbitrary misclassification of thousands
of properties” created non-uniformity in practice.101 To evidence their concern, the
plaintiffs cite examples of nearly identical apartment buildings, located blocks apart,
98 See, e.g., Phila., B. & W. R., 57 A.2d at 765; Brennan, 104 A.2d at 797 (holding that the “requirement of uniformity in the rate of taxation” of real property prohibits “[d]eliberate discrimination between the taxpayers in the valuation of similar property”); supra note 74 and accompanying text. See Defs.’ Answering Br. 10-12 (explaining that when Delaware adopted Pennsylvania’s 99
Uniformity Clause in 1897, Pennsylvania permitted classification). 100 Am. Compl. ¶ 185. 101 See Pls.’ Opening Br. 20 (italics omitted); Am. Compl. ¶ 185. 24 being classified differently—one residential and one non-residential—and therefore
subject to different tax rates.102
Our Constitution does not demand perfection from a tax system. To be
unconstitutional, the system’s flaws must be pervasive and systemic, meaning that
they are widespread and built into the system itself. A challenger must show that
these flaws demonstrate either deliberate discrimination or create a “uniformly
non-uniform” system.103 Simple administrative mistakes that can be corrected do
not meet this high standard.
The errors complained of in the statewide property database are not systemic
or pervasive, but correctable. Of the 213,817 properties in New Castle County,
approximately 1,409 were misclassified in a way that affected their tax rate—an
error rate of 0.66%.104 This error rate does not suggest that the statute is being
applied in an irrational or “clearly arbitrary” manner.105 It merely demonstrates
administrative difficulties.
102 Pls.’ Opening Br. 16-21. 103 Pub. Schs., 239 A.3d at 496; see also Brennan, 104 A.2d at 797. 104 Defs.’ Answering Br. 40; see also infra notes 131, 216-217. 105 Betts, 263 A.2d at 293; see also Conard, 16 A.2d at 125. 25 In any event, the County is working to correct these errors through a recently
adopted formal policy.106 The availability of a corrective process for affected
taxpayers weighs against any as-applied constitutional violation. The isolated
examples of misclassification are correctable administrative errors, not evidence of
a system deliberately designed to be non-uniform. The as-applied challenge is
meritless.
* * *
“The issue before [me] is the constitutionality of the tax measure—not
whether the rate structure is the most fair, or the most practical, or the most wise.”107
HB242 meets that standard. It distinguishes—reasonably so, under the
circumstances—between a residential and non-residential property class, as
permitted by the Uniformity Clause and Delaware precedent.
By its terms, HB242 “operates alike and uniformly” within a class.108 All
properties classified as residential in New Castle County are treated alike. The same
is true for non-residential properties. The administrative errors in implementing
these classifications are not pervasive or systemic enough to make HB242
106 See Suppl. Decl. of Denzil J. Hardman (Dkt. 96) (“Hardman Suppl. Decl.”) Ex. A (Policy Regarding Correction of Errors in Assessment Classification Used for Tax Purposes, dated Oct. 14, 2025) (“County Reclassification Policy”); see Pls.’ Ex. 70; see also Defs.’ Answering Br. 8. 107 Betts, 263 A.2d at 292. 108 Aetna Cas. & Sur. Co., 131 A.2d at 178. 26 unconstitutional as applied, especially given the County’s corrective process.
Because HB242 does not violate the Uniformity Clause on its face or as applied,
Count I fails.
2. Retroactive Taxation (Count II)
Next, the plaintiffs bring a claim under Article VIII, Section 9 of the Delaware
Constitution (the “Personal Income Tax Clause”), which prohibits retroactive
taxation on “personal income.”109 A tax is retroactive when it taxes events occurring
before a given statute’s enactment.110 Enacted in August 2025, HB242 modifies tax
rates for a fiscal year that began the preceding July.111 In dispute is whether this
retroactive modification constitutes an increase in the rate of taxation on personal
income under Article VIII, Section 9.
The plaintiffs argue that HB242 contravenes the Personal Income Tax Clause
because the 2025 reassessment used an “income approach” to value their
109 Del. Const. art. VIII, § 9; see Pls.’ Opening Br. 57. 110 See Saul Levmore, The Case for Retroactive Taxation, 22 J. Legal Studs. 265, 266 (1993) (“[R]etroactive taxation, or other civil legislation, can be defined as entailing (that is, rewarding or burdening) triggering events that occurred in the past.”); see also Julie Roin, Retroactive Taxation, Unfunded Pensions, and Shadow Bankruptcies, 102 Iowa L. Rev. 559, 565 (2017) (“[R]etroactive taxation may appear to be just another way of passing off the cost of government to ‘the man behind the tree’ who is not only unseen, but in no position to defend against the imposition of an unfair burden.” (citation omitted)). 111 HB242 § 1(1); Stipulated Facts ¶¶ 25, 38-49; supra note 40 (quoting HB242 in full). 27 properties.112 Their challenge is an as-applied one concerning whether their
members, whose non-residential properties were assessed using the income
approach, yielded rent-based valuations. But their claim obfuscates the plain
meaning of the constitutional provision. It fails for this reason alone.
a. The Personal Income Tax Clause
Once again, my analysis begins with the constitutional text. Article VIII,
Section 9 of the Delaware Constitution states that “[a]ny law which shall have the
effect of increasing the rates of taxation on personal income for any year or part
thereof before the date of the enactment thereof . . . shall be void.”113 Because the
provision is unambiguous, I need not read beyond the plain text.114
Perhaps self-explanatorily, the provision refers to personal income—not
property—taxes. The two are distinct concepts. An “income tax” is “[a] tax on an
individual’s or entity’s net income.”115 Personal income is the “total income
112 See Am. Compl. ¶ 195. 113 Del. Const. art. VIII, § 9. Notably, the parties cite no case law so much as mentioning this provision. My own research has uncovered none. 114 See Marker v. State, 450 A.2d 397, 399 (Del. 1982) (“Constitutional phrases must, if possible, be given their ordinary or plain meaning . . . [such that] the words found therein must be given the meaning ordinarily ascribed to them.”); Op. of the Justs., 274 A.3d at 272. 115 Tax, Black’s Law Dictionary (12th ed. 2024). 28 received by an individual from all sources.”116 A “property tax,” by contrast, is
defined as “[a] tax levied on the owner of [the] property (esp[ecially] real property),
usu[ally] based on the property’s value.”117 As Henry Campbell Black’s
foundational treatise on income tax observes:
An income tax is distinguished from other forms of taxation in th[e] respect[] that it is not levied upon property, nor upon the operations of trade and business or the subjects employed therein, nor upon the practice of a profession or the pursuit of a trade or calling, but upon the acquisitions of the taxpayer arising from one or more of these sources or from all combined.118
The tax authorized by HB242 is an ad valorem property tax—a tax according
to “the value of the property” itself.119 It does not tax the acquisitions or profits of
the taxpayer. The language of the Personal Income Tax Clause is specific, and if the
framers had intended this prohibition to apply to all forms of taxation, they could
have used broader language.120
116 Income, Black’s Law Dictionary (12th ed. 2024) (defining “personal income” in a sub- category). 117 Tax, supra note 115. 118 Id. (quoting Henry Campbell Black, A Treatise on the Law of Income Taxation Under Federal and State Laws § 1, 1 (1913)). 119 Id. (quoting 71 Am. Jur. 2d State and Local Taxation § 20, Westlaw (database updated May 2025)). 120 The drafters of the Personal Income Tax Clause, or its subsequent editors in the legislature, could have included property taxes within the provision, much like in the Uniformity Clause. But they did not. Cf. Leatherbury, 939 A.2d at 1291 (“Where, as here, when provisions are expressly included in one statute but omitted from another, we must conclude that the General Assembly intended to make those omissions.”). 29 The distinction between property and income taxes is underscored by the
division between the authority to tax income and property in Delaware. The State
taxes personal income.121 Counties, municipalities, and school districts tax real
property.122 School districts lack the statutory authority to levy taxes on personal
income, confirming that the tax at issue is a tax on real property.
b. The “Income Approach”
The plaintiffs ask this court to overlook the Personal Income Tax Clause’s
text and focus on the method used to calculate the property taxes. They maintain
that because Tyler’s assessment of non-residential properties relied on an “income
approach” that measured the “income stream associated with” the property, the tax
is functionally one with the plaintiffs’ members’ personal incomes.123 This
argument confuses the method used to calculate the property tax with the nature of
the tax itself.
Using an income-based approach to raise property taxes does not create a
personal income tax. Instead, it is a standard appraisal methodology used to estimate
121 30 Del. C. §§ 1101-26. 122 9 Del. C. § 8002 (“A county governing body may adopt different tax rates for real property based on different real property classifications adopted by the county governing body.”); see also Am. Tel. & Tel. Co. v. Everett, 152 A.2d 295, 299 (Del. Ch. 1959) (stating that the “provisions governing taxation of real property in Delaware contemplate taxation of such property by the counties or other political subdivisions of the State rather than by the State itself”). 123 Am. Compl. ¶ 195. 30 a property’s fair market value with income as the input.124 The income approach is
Delaware’s “preferred method [for] evaluating [the value of] income producing
properties.”125 Relevant here, it is a technique to value real property, which is later
taxed “by the counties or other political subdivisions of the State.”126 Its purpose is
to determine what a willing buyer would pay for the property as an investment—not
to tax the owner’s income.127
There is an obvious distinction between this appraisal methodology and the
plaintiffs’ members’ incomes. The income approach primarily uses market rental
data and capitalization rates to estimate a hypothetical income stream, not the
specific financial performance of a particular property.128 The record shows that
99% of Tyler’s valuations for non-residential properties were based on such market
data rather than actual income data provided by the plaintiffs’ members.129
To accept the plaintiffs’ reasoning would lead to an absurd result where the
same tax is simultaneously a “property tax” for a homeowner (valued using sales
comparisons) and an “income tax” for a neighboring apartment building (valued
124 See Wilm. Hous. Auth. v. Greater St. John Baptist Church, 291 A.2d 282, 284-85 (Del. 1972); see also Tyler Report 27-32 (describing the three methods). 125 Seaford Assocs., L.P. v. Bd. of Assessment Rev., 539 A.2d 1045, 1048 (Del. 1988). 126 Am. Tel. & Tel. Co., 152 A.2d at 299. 127 See Tyler Report 29. 128 Tyler Report 29-30; see Defs.’ Opening Br. 51. 129 Hardman Decl. ¶¶ 8-10; see Defs.’ Opening Br. at 51. 31 using the income approach). The nature of a tax does not change based on the
appraisal technique used to value the underlying asset. Regardless of the appraisal
method used, the final tax is levied on the resulting assessed value of the real estate,
not the dollars of income the property generates in a given year.
Article VIII, Section 9 of the Delaware Constitution does not apply to the
property taxation scheme contemplated by HB242. The use of an income approach
to value certain properties does not convert a tax on property into a tax on personal
income. Count II therefore fails.
3. The Due Process Clause (Count VI)
The plaintiffs next contend that the County defendants’ plan to correct certain
property classifications after the School Boards set tax rates under HB242 violates
the Due Process Clause of the Fourteenth Amendment of the United States
Constitution.130 The County has identified approximately 1,409 properties that “are
misclassified in such a way that correcting the error in classification will change the
property’s designation as residential or non-residential for tax purposes.”131 The
130 Am. Compl. ¶¶ 228-37. 131 See Hardman Suppl. Decl. ¶ 4 (stating that 1,382 properties are misclassified); Decl. of Nicholas J. Brannick ¶ 2 (addressing a spreadsheet error); Trial Tr. 14, 18 (stating that the County had identified another 28 misclassified properties). I use the higher, 1,409 figure in this decision. See infra notes 213-214. 32 plaintiffs argue that reclassifying 966 of those properties from the residential to
higher-taxed non-residential category, without adequate notice or an opportunity to
be heard, constitutes an unconstitutional deprivation of property.132
The Fourteenth Amendment provides that a state cannot “deprive any person
of life, liberty, or property, without due process of law.”133 “The fundamental
requirement[s]” of procedural due process are notice and “the opportunity to be
heard at a meaningful time and in a meaningful manner.”134 Due process is “flexible
and calls for such procedural protections as the particular situation demands.”135 In
the taxation context, states need not provide pre-deprivation remedies.136 Post-
deprivation remedies, like an opportunity to “dispute . . . the validity of the tax
assessment” and “a partial refund to petitioner[,]” are sufficient.137
132 Am. Compl. ¶¶ 230, 232-33. 133 U.S. Const. amend. XIV, § 1. The Delaware Constitution’s due process protections are coextensive with the United States Constitution. See Blinder, Robinson & Co. v. Bruton, 552 A.2d 466, 472 (Del. 1989). 134 Mathews v. Eldridge, 424 U.S. 319, 333 (1976) (citation omitted); United States v. James Daniel Good Real Prop., 510 U.S. 43, 53 (1993). 135 Slawik v. State, 480 A.2d 636, 645 (Del. 1984); see also W.L. Gore & Assocs., Inc. v. Wu, 2006 WL 905346, at *4 (Del. Ch. Mar. 30, 2006) (stating that “[t]he amount of process required to safeguard an individual’s due process rights varies greatly depending on the facts and issues involved in each case”). 136 McKesson Corp. v. Div. of Alcoholic Beverages & Tobacco, Dep’t of Bus. Regul. of Fla., 496 U.S. 18, 36-37 (1990) (“[States] may choose to provide a form of ‘predeprivation process,’ . . . [but] it is well established that [they] need not [do so].”). 137 Id. at 37, 41. 33 The plaintiffs’ procedural due process claim falters at the threshold because
they have not shown a protected private interest implicated by the County’s
correction of classification errors. Even if they articulated a sufficient interest, the
Mathews v. Eldridge balancing test also weighs against the plaintiffs.138 Without
demonstrating a cognizable due process deprivation, Count VI fails.
a. Protected Property Interest
Procedural due process protections are triggered only by the deprivation of a
protected interest in life, liberty, or property.139 To have a protected interest in a
government benefit, “a person clearly must have more than an abstract need or
desire” or a “unilateral expectation of it.”140 She must have “a legitimate claim of
entitlement to it.”141 Such entitlements arise from independent sources like state
law—not from the Constitution itself.142
The plaintiffs claim a property interest in the retention of a favorable—albeit
incorrect—property classification.143 But taxpayers generally lack a vested property
right in the continuation of a tax classification, not to mention the perpetuation of an
138 See infra note 163 and accompanying text. 139 See U.S. Const. amend XIV, § 1. 140 Bd. of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972). 141 Id. 142 See Town of Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005). 143 Am. Compl. ¶ 230. 34 administrative error that results in lower taxes.144 The deprivation alleged here is
not a legitimate entitlement, but the loss of an effective tax windfall resulting from
an administrative error in classification.145 Absent a protected property interest in
the erroneous classification, the Due Process Clause is not implicated by its
correction.
b. Adequacy of Post-Deprivation Remedies
The plaintiffs counter that the relevant property interest is the money being
taxed due to the misclassification.146 In McKesson Corp. v. Division of Alcoholic
Beverages & Tobacco, Department of Business Regulation of Florida, the United
States Supreme Court held that the “exaction of a tax constitutes a deprivation of
property.”147 As a result, the state must “provide procedural safeguards against
144 See Welch v. Henry, 305 U.S. 134, 146-47 (1938); cf. Croda, Inc. v. New Castle Cnty., 2021 WL 5027005, at *4 (Del. Ch. Oct. 28, 2021) (noting that landowners lack vested rights against zoning changes). 145 See Trial Tr. 54-56. 146 Am. Compl. ¶ 235. The plaintiffs also assert that the “absence of any mechanism to contest or obtain review of a property reclassification” amounts to a deprivation of property without due process. Id. ¶ 234. I questioned the plaintiffs on this point at trial and was told that “it’s pretty clear that when you’re changing somebody’s tax, there is absolutely a due process interest in having a meaningful process around how that is going to be determined and having both whatever administrative process that the government may stand up, but as well as having the right to judicial review.” Trial Tr. 55. After reviewing the plaintiffs’ papers, however, I cannot locate support for this proposition. Cf. Cohen v. State ex rel. Stewart, 89 A.3d 65, 88 (Del. 2014) (providing that “vague and amorphous interest[s],” resting on an inadequate foundation, do not “constitute a property interest that deserve[s] substantial weight”). 147 496 U.S. at 36. 35 unlawful exactions in order to satisfy the commands of the Due Process Clause.”148
Yet, McKesson held that post-deprivation remedies are generally sufficient in the tax
context. That principle applies here.
Even if the increased tax liability resulting from the reclassification involves
a loss of protected property (i.e., the money paid), the available post-deprivation
procedures satisfy due process. The Supreme Court has recognized that requiring
taxpayers to pay first and litigate later is constitutionally permissible given the
government’s strong interest in prompt revenue collection.149 The essential factor is
the availability of a “clear and certain remedy” after payment.150 Both Delaware law
and County policy provide such remedies through a multi-level post-deprivation
process.
The plaintiffs primarily argue that adequate process is lacking because the
statutory deadline for assessment appeals has passed. This argument rests on a false
equation of assessment with classification. Assessment is the process to “establish
the market value” of parcels within a given district.151 In contrast, properties are
148 Id. 149 See id. at 37 (“[I]t is well established that a State need not provide pre-deprivation process for the exaction of taxes.”). 150 Id. at 39. 151 Tyler Letter 4; see also 2 John Martinez, Local Government Law § 23:16, Westlaw (database updated Oct. 2025) (describing a two-step process: (1) a “list or roll of taxable property” is compiled, and (2) a “valuation of that property” occurs). 36 classified—by the State, the County, and school districts—to assign certain property
tax rates.152 These are separate events, taking place at different times.153
Thus, the unavailability of the assessment appeal process under 9 Del. C §
8311 is not dispositive. That statutory process, with its March 31 deadline, governs
challenges to the assessed value (i.e., fair market value) determined during a
reassessment.154 It does not, by its terms, apply to disputes over property
classification used for applying tax rates.
First, property owners receive notice of their classifications and applicable tax
rates through their tax bills. At trial, the County expressed its willingness to provide
specific notice of any classification change in the revised bills.155
152 HB242 §1(1); see also 22 Del. C. § 1107 (delegating authority to municipalities to assign different tax rates for residential and non-residential real property). 153 In conducting an assessment, assessors may rely on certain classifications to conduct their valuations. This was true for Tyler’s 2025 reassessment. See Tyler Report 8-9. But the classifications relied on by Tyler are different in meaning and scope from those promulgated by the County. For example, New Castle County defines “residential” property as that “classified as either Residential or Farmland” in the County’s parcel records. Defs.’ Ex. H (Substitute No. 1 to New Castle County Ordinance No. 25-048) § 10; see also Stipulated Facts ¶ 107. It defines “non-residential” property as that “classified as any classification other than Residential or Farmland” in the County’s parcel records. Defs.’ Ex. H § 10; see also Stipulated Facts ¶¶ 56, 117-18. Tyler’s report does not expressly define “residential” properties, but it treats agricultural, commercial, and industrial properties as “non-residential.” Tyler Report 11, 17. 154 See 9 Del. C. § 8311(a). The Board of Assessment Review’s jurisdiction appears limited to matters of improper assessment. Id. § 1371B(1). 155 See Trial Tr. 122-23 (confirming that the County is willing to “send out a notice with the tax bill” that will inform taxpayers of their ability to challenge the reclassification under the new policy). I view that as a prudent and necessary step to ensure adequate notice. 37 Second, property owners may pursue administrative challenges to their
classifications through the County’s recently adopted Policy Regarding Correction
of Errors in Assessment Classification Used for Tax Purposes.156 The plaintiffs
emphasize that the County adopted this formal policy only after their lawsuit was
brought, suggesting that it recognized a prior process gap. They note that the policy
lacks preexisting statutory authority beyond general administrative functions. Still,
the policy’s adoption demonstrates a commitment to providing a defined
post-deprivation process.
Under the policy, a taxpayer may submit a written challenge of a property
classification to the New Castle County Division of Assessment within six months
from the billing date, and a written decision will be issued within 60 days of
submission.157 The policy is untested in practice due to its recent adoption. But it is
an available administrative avenue providing the first step for resolving
classification disputes.158
156 See supra note 106 and accompanying text. 157 County Reclassification Policy, Procedure (3); 10 Del. C. § 8125. The County policy was adopted amid the present litigation. Before its adoption, the County used an informal, ad hoc procedure. I do not see a due process issue with this timing because the new policy is in place before taxpayers receive their new tax bills, which will reflect any reclassification. See Trial Tr. 119-22. 158 The plaintiffs caution that the policy can be rescinded as easily as it was adopted. Pls.’ Answering Br. 23-24 (describing the policy as “entirely a matter of administrative grace”). At trial, defendants insisted that their concern is needless for two reasons. First, the official
38 Third, if dissatisfied with the Division of Assessment’s decision, a property
owner may pursue judicial intervention.159 She may file a writ of certiorari to the
Superior Court, which allows the court to review the County’s final administrative
decision for errors of law. Although the plaintiffs question the adequacy of this
relief, courts have deemed a writ of certiorari appropriate and adequate for reviewing
classification determinations.160 Despite the practical impossibility of completing
both an administrative challenge and certiorari review before the November 30
payment deadline, taxpayers retain the ability to recover later, consistent with the
post-deprivation framework permitted under McKesson. Both State and County law
provide mechanisms for refunding taxes paid erroneously.161
policy squares with the County’s preexisting informal practices. And second, the County “has represented to this court and is asking this court to rely on this policy,” while understanding the implications of such an ask. Trial Tr. 119-20. I take the County at its word. 159 County Reclassification Policy, Procedure (3); see New Castle Cnty. Code §§ 14.03.001-.002; 14 Del. C. § 1921. 160 See Goldstein v. City of Wilm., 598 A.2d 149, 152 (Del. 1991); Green v. Sussex Cnty., 668 A.2d 770, 773 (Del. Super. 1995); Gillespie v. Sussex Cnty., 1999 WL 463532, at *1 (Del. Super. Mar. 31, 1999) (stating that the Superior Court has jurisdiction to “review the legality of property assessments[,]” which may include a review of the classification). The plaintiffs caution that the Superior Court does not review factual determinations below and instead limits its review to errors of law. Pls.’ Answering Br. 22-23. The appliable standard, however, requires a meaningful opportunity to be heard—not the best possible review. As discussed, the overall process provided meets the minimum constitutional requirement for due process. 161 New Castle Cnty. Code §§ 14.03.001-.002; 14 Del. C. § 1921. 39 This combination of notice, administrative challenge, judicial review, and a
refund mechanism constitutes a “clear and certain” remedy sufficient for due process
to correct tax classifications.162
c. Mathews Balancing
To assess the process due in a specific context, courts apply the three-factor
balancing test from Mathews v. Eldridge, considering:
[(1)] the private interest that will be affected by the official action; [(2)] the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and [(3)] the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedur[es] . . . would entail.163
An application of these factors confirms the constitutional adequacy of the County
and State’s post-deprivation process.
The first factor considers the private interest.164 That interest is purely
financial: the payment of higher taxes due to a corrected classification. This interest
is personally significant to any taxpayer, but the constitutional interest is diminished.
The plaintiffs are not being deprived of a vested legal entitlement. They are being
162 McKesson, 496 U.S. at 39 (stating that post-deprivation remedies, like a “fair opportunity to challenge the accuracy and legal validity of their tax obligation,” that also provide a “‘clear and certain remedy’ . . . for any erroneous or unlawful tax collection[,]” are sufficient (citing Atchison, Topeka, & Santa Fe Ry. Co. v. O’Connor, 223 U.S. 280, 285 (1912))); see State v. Rumpff, 308 A.3d 169, 197 (Del. Super. 2023). 163 Eldridge, 424 U.S. at 335. 164 W.L. Gore, 2006 WL 905346, at *4. 40 asked to pay the correct tax after benefitting from an error. The post-deprivation
refund process protects their core interest in paying no more than what is lawfully
due.
As for the second factor, which involves the risk of error and value of added
safeguards, the potential for erroneous deprivation is mitigated by the
post-deprivation challenge and refund process. Though the plaintiffs highlight
potential errors in the County’s reclassification data, the new administrative policy
allows these issues to be addressed. To require a universal pre-deprivation hearing
for potentially thousands of classification corrections before revised tax bills are
issued would impose undue administrative burdens. It would also be of limited
incremental value compared to the available post-deprivation review and refund
remedy.
Finally, regarding the third factor, the government’s interests are substantial.
There is a strong interest in accurate and uniform application of tax laws, which
logically includes correcting classification errors.165 There is also an essential
interest in the timely and orderly collection of tax revenue to fund public services
(schools) and maintaining financial stability—an interest underscored by the
165 See McKesson, 496 U.S. at 37 (discussing the government’s “exceedingly strong interest in financial stability in th[e] context” of taxation). 41 November 30 deadline for all taxpayers.166 Attempting mass pre-deprivation
hearings on a highly expedited timeline before that deadline would risk significant
administrative chaos, increased taxpayer confusion, and delayed revenue collection.
Postponing the individualized challenge process until after the revised bills are
issued serves these significant interests, aligning with the principle that tax collection
need not await pre-deprivation resolution where adequate post-deprivation remedies
exist.167
Balancing these factors, the post-deprivation remedies provided by County
policy and State law are constitutionally sufficient for the correction of property tax
classifications. That is especially true considering the limited nature of the private
interest (avoiding payment of the correct tax during one fiscal year) and the
substantial government interests in efficient tax administration and revenue
collection.
The plaintiffs have not established a protected property interest in an
erroneous tax classification. Had they, the post-deprivation administrative and
judicial remedies available to affected property owners provide a clear and certain
166 See id. 167 Id. 42 remedy sufficient to satisfy the requirements of the Due Process Clause in this tax
context. Judgment on Count VI is for the defendants.
B. Statutory and Ultra Vires Claims (Counts III, IV, and V)
The plaintiffs’ remaining claims allege that the defendants’ actions were ultra
vires, or beyond their legal authority.168 Rather than challenge the constitutionality
of the underlying statutes, these claims suggest that the defendants violated the
statutes’ plain terms.
Each claim presents pure questions of law and statutory interpretation.169 The
presumption of constitutionality does not apply. Instead, the plaintiffs must prove,
by a preponderance of the evidence, that the defendants exceeded the authority
granted to them by the legislature.170
“The rules of statutory construction are well settled.”171 The court must
determine “whether the statute under consideration is ambiguous,” meaning that the
statute is “susceptible of two reasonable interpretations.”172 If a statute “is
168 See Haddock v. Bd. of Pub. Educ. in Wilm., 84 A.2d 157, 162-63 (Del. Ch. 1951) (holding that a school board’s action was ultra vires because it did not “comply with the strict provisions of the statute”); see supra note 48 (defining “ultra vires”). 169 See Taylor v. Diamond State Port Corp., 14 A.3d 536, 538 (Del. 2011) (outlining the rules of statutory construction). 170 See Oberly v. Howard Hughes Med. Inst., 472 A.2d 366, 390 (Del. 1984) (noting the preponderance of the evidence standard in the Court of Chancery). 171 Taylor, 14 A.3d at 538. 172 Id. 43 unambiguous, then [the court] give[s] the words in the statute their plain
meaning.”173 If a statute is “ambiguous, however, then [the court] consider[s] the
statute as a whole, rather than in parts, and . . . read[s] each section in light of all
others to produce a harmonious [text].”174 “[T]he golden rule of statutory
interpretation . . . is that unreasonableness of the result produced by one among
possible interpretations . . . is reason for rejecting that interpretation in favor of
another which would produce a reasonable result.”175
1. Ultra Vires for Lack of Referendum (Count III)
The plaintiffs claim that the School Boards acted outside their statutory
authority by increasing tax rates for non-residential properties without first obtaining
voter approval through a referendum.176 14 Del. C. § 1916(b), passed in 1972, sets
out a two-step process for school boards to adjust tax rates after a general
reassessment of property values.177 First, the school boards make an initial rate
173 Id. (citation omitted); see also CML V LLC v. Bax, 28 A.3d 1037, 1041 (Del. 2011). 174 Taylor, 14 A.3d at 538. 175 Del. Bay Surgical Servs., P.A. v. Swier, 900 A.2d 646, 652 (Del. 2006) (citation omitted). 176 Am. Compl. ¶¶ 199-207. 177 The full text provides: Whenever the qualified voters of a reorganized school district have approved a specific rate of taxation or specified amount of taxation under § 1903 of this title and a subsequent general reassessment of all real estate in the county changes the total assessed valuation of the school district, the local board of
44 calculation that may increase revenue by up to 10% compared to the fiscal year
before the reassessment.178 Second, any further increases by the school board must
be put to a referendum:179
[A]ny subsequent increase in rate of taxation shall be achieved only by an election of the qualified voters in such local school district according to the procedures in § 1903 of this title.180
education of each such local school district shall calculate a new real estate tax rate which, at its maximum, would realize no more than 10% increase in actual revenue over the revenue derived by real estate tax levied in the fiscal year immediately preceding such reassessed real estate valuation. In the event the qualified voters of a reorganized school district approve a specific rate of taxation or specified amount of taxation under § 1903 of this title to be collected, and there is a reassessment effective after voter approval, but before actual revenue is derived from increased taxation resulting from such voter approval, the local board of education of each such local school district shall calculate a new real estate tax rate which, at its maximum, would realize no more than a 10% increase in actual revenue over the revenue announced, projected or calculated to be derived by such voter approval and prior voter approvals. Any subsequent increase in rate of taxation shall be achieved only by an election of the qualified voters in such local school district according to the procedures in § 1903 of this title. 14 Del. C. § 1916(b); see also id. §1903 (“Before any school board levies a tax under § 1902 of this title, it shall determine whether the tax shall be on the basis of a specified amount or of a specified rate of taxation and shall call a special election to be held at the polling place or places designated by the Department of Elections conducting the election. There shall be not more than 2 such special elections held during any 12-month period.”); id. § 1911 (“If the majority of the votes cast at the election, under § 1903 of this title, shall be for additional tax, the tax shall be levied and collected as provided in this chapter.”). 178 Id. § 1916(b); see supra note 177 (quoting the statute in full). 179 These referendum requirements do not apply to defendant New Castle County Vocational Technical School District, which is governed by a different statute. See 14 Del. C. § 2601(c) (addressing post-reassessment rate setting for vocational technical districts). 180 Id. § 1916(b) (emphasis added); see supra note 177 (quoting the statute in full). 45 The plaintiffs assert that the School Boards completed the first step when they
set new tax rates in July 2025 and issued tax warrants after the reassessment. They
view the School Boards’ later approval of even higher rates for non-residential
properties under HB242 as a “subsequent increase” that implicates the statute’s
second step.181 The statute was violated, they argue, because the School Boards
failed to put the revisions to a voter referendum.182
This claim centers on the interplay between Section 1916(b), which concerns
post-reassessment tax adjustments, and HB242. A careful assessment of the relevant
statutes reveals that the referendum process addressed in Section 1916(b) is in
tension with HB242’s specific directives. Because HB242 provides a limited
exception to the general rule in Section 1916(b), the School Boards acted within their
statutory authority.
a. Increase or Reallocation
To start, I consider whether the action authorized by HB242 constitutes a
“subsequent increase in rate of taxation” under Section 1916(b).183 Read in context,
Section 1916(b)’s referendum requirement applies when a school district seeks to
181 See Pls.’ Answering Br. 47, 50. 182 See id. at 47-50. 183 14 Del. C. § 1916(b); see Defs.’ Opening Br. 55 n.216 (“The process at issue in the instant matter permits school districts to increase tax rates so as to realize up to a 10% projected increase in revenue, or projected revenue, following a reassessment.”). 46 increase its overall authorized revenue beyond the level set immediately after a
reassessment, which itself permits up to a 10% increase. The referendum
requirement gives voters the ability to approve a higher overall tax burden on the
community to support a school district’s increased spending.184
HB242, however, explicitly prohibits such an increase. It requires revenue
neutrality compared to the original 2025-2026 tax warrant.185 It permits a
reallocation of the taxes being levied between different classes of property, not an
increase in the total levy itself.186
That is, HB242 does not increase the overall tax burden authorized for a
school district. It merely reapportions how that existing burden is shared within a
revenue-neutral framework. This reapportionment does not trigger the referendum
requirement of Section 1916(b) because the statute’s core purpose—voter approval
for higher overall taxes—is not implicated.
b. The Practical Conflict
Even if the rate adjustment under HB242 were an “increase” subject to Section
1916(b), the plaintiffs’ claim still fails because the statutes conflict in operation.
“[W]hen the General Assembly enacts a later statute in an area covered by a prior
184 See supra note 177 (quoting Section 1916(b) in full). 185 See HB242 § 1(1); supra note 40 (quoting HB242 in full). 186 See HB242 § 1(1); see also Defs.’ Answering Br. 53 (explaining this point). 47 statute, it has in mind the prior statute[,]” such that “statutes on the same subject
must be construed together . . . unless there is an irreconcilable conflict . . ., in which
case the later supersedes the earlier.”187 Harmonization is impossible given
HB242’s explicit timeline.
HB242 begins:
Notwithstanding any provision of law to the contrary, . . . the school board of a school district located entirely in New Castle County may, for the 2025-2026 school tax year, reset the local school tax rate using a residential and a non-residential tax rate.188
It directs that any such new rates “must be reported to the County and delivered with
a new warrant not later than 10 business days from the effective date of this Act.”189
Enacted on August 12, 2025, this text required action by August 26. 190 The
compressed timeframe reflects the emergency nature of legislation aimed at
providing immediate relief and certainty for the County, school districts, and
taxpayers before new tax bills were due this fall.
187 State, Dep’t of Lab. v. Minner, 448 A.2d 227, 229 (Del. 1982); see also Wilm. Tr. Co. v. Barron, 470 A.2d 257, 264 (Del. 1983) (explaining that “it is assumed that whenever the legislature enacts a provision it has in mind previous statutes relating to the same subject matter,” and so “in the absence of any express repeal or amendment therein, the new provision was enacted in accord with the legislative policy embodied in those prior statutes”). 188 HB242 § 1(1) (emphasis added); see supra note 40 (quoting HB242 in full). 189 HB242 § 1(1) (emphasis added). 190 Id. § 1(2). 48 The referendum process set by Section 1916(b) (incorporating Section 1903
procedures) requires more time than was available. Even absent specific minimum
notice periods in Chapter 19 itself, general election statutes require published
notices.191 The logistical requirements of holding special elections across multiple
large school districts could not plausibly have been met within ten business days.
This reality leaves the plaintiffs’ suggestion that the School Boards could have
complied with both statutes factually untenable. To enforce compliance with
Section 1916(b) would bar realistic compliance with HB242’s mandatory deadline,
leaving the relief authorized by HB242 a nullity.
This irreconcilable conflict triggers settled canons of construction. HB242,
enacted decades after the relevant provisions of Section 1916(b), specifically
addresses the unique circumstances of the 2025-2026 tax year in New Castle County
post-reassessment. Section 1916(b) provides a general rule that applies statewide
and across time. “[W]hen a specific statute is enacted that appears to conflict with
an existing general statute, the subsequently enacted specific statute is
controlling.”192
191 See, e.g., 14 Del. C. § 1074(b). 192 Cede & Co. v. Technicolor, Inc., 758 A.2d 485, 494 (Del. 2000). 49 That conclusion is reinforced by HB242’s preface: “[n]otwithstanding any
provision of law to the contrary . . . .”193 As the United States Supreme Court has
recognized, this clause “signals the drafter’s intention that” the text that follows
“override[s] conflicting provisions of any other section.”194 The General
Assembly’s inclusion of the clause reveals its intent that preexisting procedures, like
the referendum process in Section 1916(b), not impede HB242’s time-sensitive
operation. Insisting on a referendum would contravene this legislative command
and defeat HB242’s very purpose.
HB242 governs as a limited exception to the general referendum requirement
of § 1916(b). The School Boards’ actions in resetting the tax rates under the
authority and timeline granted in HB242, without holding a referendum, were not
ultra vires. Count III is resolved in the defendants’ favor.
2. Ultra Vires for Failure to Capture Fair Market Value (Count IV)
The plaintiffs next contend that HB242 as implemented violates Delaware’s
“True Value Statute,” 9 Del. C. § 8306, which mandates that all property “shall be
193 HB242 § 1(1). 194 Cisneros v. Alpine Ridge Gp., 508 U.S. 10, 18 (1993); see In re Fed.-Mogul Glob. Inc., 684 F.3d 355, 368-69 (3d Cir. 2012) (explaining that a federal “notwithstanding” clause preempted state law); see also Notwithstanding, Black’s Law Dictionary (12th ed. 2024) (defining “notwithstanding” as “[d]espite, in spite of”). 50 assessed at its fair market value.”195 The claim proceeds in two steps. First, the
plaintiffs argue that because HB242 retroactively increased the tax burden on
non-residential properties after the 2025 reassessment was finalized, the assessments
no longer reflect the properties’ fair market value.196 Second, they assert that they
are being deprived of due process because the deadline to appeal assessments passed,
leaving property owners with no recourse to challenge valuations that they believe
were rendered inaccurate by the new law.197
a. Fair Market Value
The plaintiffs posit that HB242 contravenes the True Value Statute because
the higher tax liability on non-residential properties causes a corresponding
reduction to the properties’ fair market values. Since a willing buyer would pay less
for a property that carries a larger tax bill, the plaintiffs reason, the recent assessment
is now obsolete and inaccurate.198
This argument is rational from a purely economic standpoint. But it fails as a
matter of law based on the plain and unambiguous text of the True Value Statute.
The statute does not define “fair market value” as a fluctuating figure that must be
195 Am. Compl. ¶¶ 208-18; see 9 Del. C. § 8306. 196 Pls.’ Opening Br. 64-65. 197 Id. at 66. 198 Id. at 64-65. 51 updated with every change in market conditions or tax policy. Instead, it has a
temporal limitation. The statute commands that property “shall be assessed at its
fair market value as of the date of the most recent reassessment base year in the
county.”199 For the 2025 reassessment, that date is July 1, 2024.200
Put differently, the statute creates a legal snapshot in time using a base year
method, which the Delaware Supreme Court has confirmed is a permissible way to
implement the constitutional mandate of tax uniformity.201 By fixing the assessment
value to a base year date, a uniform basis for levying taxes is set for the subsequent
period. Events after the July 1, 2024 valuation date—such as the passage of HB242
in August 2025—are legally irrelevant to the validity of an assessment set according
to the statutory base year.202 To hold otherwise would ignore the statute’s clear
temporal limitation.
The plaintiffs’ position also creates an unworkable, circular logic. An
assessment establishes the foundational value on which a tax is calculated.203 If the
199 9 Del. C. § 8306(a) (emphasis added). 200 See Stipulated Facts ¶ 20; see also Defs.’ Opening Br. 58. 201 See Bd. of Assessment Rev. for New Castle Cnty. v. Stewart, 378 A.2d 113, 116 (Del. 1977); see also Defs.’ Opening Br. 59. 202 See Defs.’ Opening Br. 58 (making this argument). 203 Trial Tr. 112; Carr v. Bd. of Assessment Rev., 1995 WL 109003, at *2 (Del. Super. Feb. 22, 1995) (defining assessment as the “assessment[] of the value of property for tax purposes”). 52 resulting tax could retroactively invalidate the assessment, the process would
become an endless loop. Every change in a tax rate would necessitate a new round
of assessments, which would then require new tax rates, and so on. Such a system
would be administratively unworkable and prevent the government from achieving
the finality needed to collect revenue. The True Value Statute’s method of linking
valuation to a base date avoids this circularity.
b. Due Process
The second part of the plaintiffs’ argument is that the sequence of events
creates a due process problem.204 They assert that since HB242 was enacted after
the March 31, 2025 deadline to appeal property assessments, they were deprived of
a meaningful opportunity to be heard.205 Had their members known the tax rates
would ultimately be higher, the plaintiffs say, more would have challenged their
initial assessed values.206
This argument is baseless. A property tax appeal is a challenge to the assessed
value of the property as of the base year—not to the resulting tax liability.207 The
tax increase implemented under HB242 in August 2025 would have no legal bearing
204 See Am. Compl. ¶ 216. 205 See Pls.’ Opening Br. 66. 206 See id. 207 See 9 Del. C. §§ 8311(a), 137B(1); see also Defs.’ Opening Br. 66. 53 on a property’s fair market value as of July 1, 2024, and could not have formed the
basis for a successful tax appeal.208 Because the plaintiffs’ members were not
deprived of the opportunity to make a meritorious argument, they were not
prejudiced. And absent a showing of prejudice, their due process challenge fails.209
3. Ultra Vires for Lack of Revenue Neutrality (Count V)
The plaintiffs’ final ultra vires claim involves whether HB242 is violated by
the County’s plan to reclassify properties after the School Boards set split rates.210
The plaintiffs argue that the planned reclassification breaches HB242’s revenue
neutrality requirement because changing property classifications—particularly from
residential to the higher non-residential tier—after fixing rates will cause total
projected revenue to exceed the school districts’ original projections.211 They further
maintain that this breach is incurable because the ten-business-day deadline for
setting new rates lapsed in August.212 Both arguments are belied by the plain text
and practical application of HB242.
HB242 provides that if a school district resets its tax rates to distinguish
between residential and non-residential properties, “[t]he total amount of revenue
208 See Defs.’ Opening Br. 66. 209 See id. at 69. 210 Am. Compl. ¶¶ 219-27. 211 See Pls.’ Opening Br. 21; Pls.’ Answering Br. 6-13. 212 Pls.’ Answering Br. 4; see HB242 § 1(2). 54 projected to be collected through use of the [revised] tax rates may not exceed the
total amount of revenue the district was projected to collect under its original 2025-
2026 tax warrant.”213 The use of “projected” is dispositive.214 It reveals that the
School Boards had to calculate revenue based on the data available when tax rates
were reset within the ten-business-day window after HB242’s enactment. HB242
imposes a duty to create a projection—an estimate—using the County’s property
classification data as it then existed. It did not, and realistically could not, require
perpetual alignment between the initial projection and the final, actual revenue
collected after later data refinements or corrections.
HB242 lacks a knowledge element. It does not say that a school district’s
collection must be accurate based on perfect data. Nor does it require the School
Boards or County to have identified all potential classification errors before a
projection was made. The School Boards were charged with setting a tax rate based
on the official County data they possessed in the moment. Their compliance with
HB242 must be judged against that specific, time-bound requirement and the
then-available data.
213 HB242 § 1(1) (emphasis added); see supra note 40 (quoting the statute in full). 214 Projection, Merriam-Webster, https://www.merriam-webster.com/dictionary/ projection (last visited Oct. 24, 2025) (defining the term as “an estimate of future possibilities based on a current trend”); see also CPC Parts Delivery, LLC v. Ohio Bureau of Workers’ Comp., 2024 WL 51232, at *2 (Ohio Ct. App. Jan. 4, 2024) (“Revenue neutrality does not equate to cash flow neutrality.”). 55 Even if a knowledge element could be read into the statute, the defendants
would still prevail. HB242 was adopted on August 12, 2025, prompting an August
26 deadline for tax warrants. Although the County was aware of a handful of
anecdotal classification flaws before then, knowledge of a potentially larger problem
first arose on August 17, when a single member of the Christina School Board
identified multiple misclassified properties.215 This realization was five days after
HB242’s enactment, and halfway through the window the School Boards had to
calculate, approve, and deliver new tax warrants. It would be unreasonable to expect
the School Boards to halt their task and risk violating the statutory deadline to
incorporate incomplete information possessed by one person in one school district
rather than the official County data before them.
The full scale of errors since discovered remains relatively small.216 The
County identified errors affecting the classification of approximately 1,409
properties out of 213,817 countywide.217 This is an error rate of 0.659%. It does not
215 See Decl. of Kenneth N. Dunn, Sr. (Dkt. 85) ¶¶ 5-6. 216 The plaintiffs argue that the error is not de minimis because it implicates $863 million of value. See Trial Tr. 18. The total dollars at issue has little bearing on the legal question of whether the School Boards complied with HB242’s mandate to ensure projected revenue neutrality using the data available when rates were set. Id. 217 See Hardman Suppl. Decl. ¶ 4; Defs.’ Ex. I (Resp. and Objs. to Pls.’ First Set of Interrog. to Defs.’ Henry and Del Grande) ¶ 22; supra note 131. 56 make the overall classification system arbitrary or invalidate the School Boards’
revenue projections.
The plaintiffs’ reading of HB242 ignores the practical realities of tax
administration. Tax rolls are dynamic. Classifications can change, new properties
are added, values are adjusted through appeals, and supplemental assessments
occur.218 Requiring initial revenue projections to be accurate despite subsequent
administrative actions and corrections would be unworkable, effectively freezing the
tax rolls or forcing the County to perpetuate known errors.219 The legislature’s use
of “projected” in HB242 accounts for this reality. It signifies that the revenue
neutrality check in HB242 was a time-measured mandate based on the moment of
rate setting.
HB242 does not bar the County’s efforts to correct errors in its own tax
classification records. The revenue neutrality requirement functioned as a one-time
218 See Defs.’ Ex. J (Transcript, August 12, 2025 Special Legislative Session) 193 (discussing how over 5,000 assessments were undergoing the appeals process); Defs.’ Ex. D (IAAO Standard on Mass Appraisal of Real Property) § 3.3.4 (stating that “[p]roperty characteristics data should be continually updated in response to changes brought about by new construction, new parcels, remodeling, demolition, and destruction”); Defs.’ Ex. M (IAAO Standard on Property Tax Policy) § 4.1.5 (discussing the standard for appeal). 219 See Defs.’ Answering Br. 37; Tyler Report 3 (cautioning that various “events, conditions, or circumstances” after-the-fact may “affect[] . . . properties’ market value[,]” and that a property’s “estimated value is based upon estimates and assumptions which are inherently subject to uncertainty and variation, depending upon evolving events”). 57 limitation applicable to the School Boards when they set their new rates using
available County data. Count V fails.
III. CONCLUSION
The General Assembly’s enactment of HB242 represented a swift policy
response to an unexpected and significant tax burden shift onto residential
homeowners after a court-ordered reassessment. The plaintiffs, representing
non-residential property owners who now bear a larger share of that burden, have
challenged the legislature’s solution and its implementation. For the above reasons,
each of the plaintiffs’ claims fails, and judgment is entered for the defendants on all
counts. The only relief warranted is that the County must include with its tax bills a
notice of any reclassification and a description of the new policy for disputing
reclassifications. The plaintiffs’ request for declaratory and injunctive relief is
otherwise denied. The parties are to confer on a proposed final order to implement
this decision, which must be filed by noon tomorrow unless the parties request
additional time.
Related
Cite This Page — Counsel Stack
Newark Property Association v. State of Delaware, Counsel Stack Legal Research, https://law.counselstack.com/opinion/newark-property-association-v-state-of-delaware-delch-2025.