In July 2026, Governor Matt Meyer signed Senate Bill 322 into law after it passed the senate and house in June. The bill repeals the ability of school districts to raise taxes by up to 10 percent after property reassessments, limiting the increase to only two percent. The senate passed the bill with 18 yes votes and zero no votes. The House passed the bill with 29 yes votes and eight no votes.
The act was related to controversy after properties were reassessed throughout Delaware last year. The reassessments were required under a court order as property assessments in the state had not been completed for decades. New Castle County properties were last assessed in 1987, Kent County in 1987 and Sussex County in 1974. In January 2018, a lawsuit, Delawareans for Educational Opportunity v. Carney, was filed in Delaware Court of Chancery. In May 2020, the court ruled that outdated property assessments violated Delaware law regarding equal taxation.
All three counties reached agreements that led to the reassessment of all properties in the state. At the time, school districts were permitted to increase taxes by up to 10 percent after properties were reassessed. Only seven districts in the state chose to increase taxes. Five of them, Appoquinimink, Christiana, Colonial, Brandywine and Red Clay Consolidated are in New Castle. Capital School District is in Kent and Indian River in Sussex. Both Brandywine and Red Clay reversed their increase in August 2026.
With the passage of Senate Bill 322, districts are now unable to raise taxes by 10 percent after reassessment. Districts can increase referendum-approved taxes by up to two percent annually without voter approval. The portion of school tax that is referendum approved includes operations, which covers utilities, teacher salaries and other expenses, and debt service which covers the cost of major capital improvements like new schools. In addition, the law requires districts to have an operational reserve fund balance of no more than 10 percent of the annual revenue to increase taxes.
The portion of the law that talks about operational reserves limit means that districts with considerable savings cannot use this bill to increase taxes. For instance, if a district has $100 million of annual revenue, but held $12 million in reserves, they would be ineligible to increase taxes by two percent.
The change will not take effect until fiscal year 2031 and districts cannot increase taxes using this law until there is another general assessment.
