Officials not happy with potential loss of funding

By Lynn R. Parks

The city of Seaford is upset at two of the 18 recommendations contained in a report expected to have been delivered to the governor Wednesday, on ways to provide more funding to the state's Department of Transportation. If adopted by the state legislature, they would mean a loss of funding to the city, City Manager Dolores Slatcher said. One recommendation calls for the elimination of municipal street aid, currently paid by the Department of Transportation. Darrell Cole, spokesman for DelDOT, said that eliminating municipal street aid would save the department about $10 million a year. But it would cost Seaford more than $200,000 a year, Slatcher said. The street aid funds are used for things such as road improvements, new curbing and snow removal. If the city loses those state funds, payment for road improvements would have to come out of the city budget, Slatcher said. "And that means that something else is cut out," she added. The city and the county are both concerned about a second proposal, which calls for the elimination of some realty transfer tax that is paid to the county. The state charges a 3-percent transfer tax whenever property is bought or sold. Half of that tax goes to either the county or the municipality in which the property is located. The proposal would eliminate payment of that transfer tax to counties, when the tax is generated as the result of new development that is taking place outside of Livable Delaware parameters. Livable Delaware is Gov. Minner's plan to control growth throughout the state. The tax generated from property sales in those areas instead would go to DelDOT. The state took in $247 million in realty transfer tax in the 2005 fiscal year, and is expected to take in about the same amount this year. Of that $247 million, $25 million went to Sussex County.

County administrator Bob Stickels estimates that under the task force proposal, the county would lose about $8 million a year. The county would receive the transfer tax only on sales in designated growth zones, about 25 percent of its area. "To think that 75 percent of the county won't be developed is not thinking properly," Stickels said. Mayor Dan Short said at the recent city council meeting that elimination of any county funding has the potential to hurt the city. Stickels said that if the county loses $8 million, it will have to look at eliminating budget expenses such as the 18 state troopers it pays for, a new ace paramedic unit, its open space program, which so far has spent $4.5 million on putting acreage in the Sussex Land Trust, and revenue sharing with municipal police forces, which totals $525,000. "There will be no lay-offs and we will continue to pay our electric bills, but we will have to look at things that everybody benefits from," Stickels said. The city is also worried that this could be the first step in reductions in transfer taxes paid to towns, Slatcher said. "We wanted to get our position out front," she said. "That way our legislators know how important this money is to municipalities." Slatcher said that the amount of transfer tax the city of Seaford receives varies. "The most we have gotten in one month has been about $200,000, the least $2,000 to $3,000," she said. Since the city started charging the transfer tax, it has received slightly more than $1 million, she added. Cole said that DelDOT is not endorsing any of the task force proposals. "What we support is that we absolutely need to have more transportation funding for the future," he said. "Our state is growing and something needs to be done for the future, or the folks in Seaford won't be able to get out of their driveways." DelDOT requested nearly $700 million from the state legislature for fiscal year 2006, beginning in July. When the state's annual bond bill was settled, funding for the department of transportation had been slashed by $287 million, to $408 million. That meant the cancellation of many projects, including the replacement of the Woodland Ferry. Cole said that the governor will review the task force recommendations and submit her own recommendations to the legislature, for approval before the end of the fiscal year June 30.

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