On November 6, the Senate will convene to consider revising the property tax due date—currently set for November 30—due to delays in issuing revised tax bills.
Property Tax Deadline Extension and $400 Million Budget Shortfall Top Legislative Agenda
By Brent Budge, Contributing Journalist
The Delaware General Assembly is preparing for back-to-back special sessions in November as the state faces significant fiscal hurdles caused by Property Tax and Budget challenges. On November 6, the Senate will convene to consider revising the property tax due date—currently set for November 30—due to delays in issuing revised tax bills. These delays stemmed from recent legal proceedings in the Delaware Court of Chancery, which ruled on October 30 on the constitutionality of the “split-rate” taxation system adopted during an earlier Special Session on August 12. Lawmakers are expected to debate postponing the tax deadline, with December 31 under consideration as the new date.
Just a week later, on November 13, the General Assembly will reconvene at the request of Governor Matt Meyer to address a newly identified $400 million budget shortfall projected over the next three years. This gap was highlighted in the latest Delaware Economic and Financial Advisory Council (DEFAC) revenue forecasts and is attributed to a combination of changes in federal tax law—nicknamed “The Big, Beautiful Bill”—and the state’s spending patterns in recent years.
State officials note that Delaware’s spending increases have dramatically outpaced revenue growth in the past three years. While the state budget has grown by 29%, overall inflation during the same period was just 9%. The upcoming sessions are expected to spark important debates on fiscal responsibility and the future direction of state finances.
Of particular concern is the impact of the depreciation provision in the “Big Beautiful Bill.” Under this provision, businesses could again “expense” large R&D expenditures in the year those purchases were made, instead of depreciating them over the course of several years. This “bonus” depreciation reduces the current tax liability for businesses and creates an incentive for R&D investment to improve the business and create higher, future revenues (and taxes). Businesses will also be able to go back retroactively to the last three tax years to claim those deductions. Governor Meyer is concerned that, as Delaware’s tax laws mirror federal law, this will reduce the current revenue for the state of Delaware. He has proposed “de-coupling” the Delaware and federal tax code in some ways to avoid this impact. Several other Northeastern states have made similar decoupling moves, although none have decoupled from this R&D provision. In fact, 10 states had actually extended this benefit during the 3 years that it had waned.
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