Newark is a Gov. Matt Meyer signature away from being able to levy a per-student tax on UD

Yahoo

24-05-2025

A per-student tax from Newark on its hometown college is closer to a reality than ever.
The Delaware Senate passed House Bill 34, which would amend Newark's city charter to allow it to levy a per-student tax on the University of Delaware. UD is the largest university in the state and the economic and cultural heartbeat of Delaware's third-most populated city. There weren't any "no" votes from any state representative or senator against the bill.
The bill allows the city to levy a tax of up to $50 per student, per semester. City officials have long been searching for an additional revenue stream to help with rising property taxes and utility costs. UD occupies nearly 40% of the city's municipal borders, and it sits on untaxable land. But its students, faculty, staff and their families are the drivers of Newark's economy.
Now the bill has to be signed by Gov. Matt Meyer. The governor's office said the legislation is under review, but did not indicate anything further.
Newark Mayor Travis McDermott said this is a long time coming and thanked the bill's sponsor, state Rep. Cyndie Romer, a Democrat from Newark, for her work to get it through.
"I think it's a piece of the puzzle to achieving equitable funding for the city of Newark," he said.
The bill has one amendment, deleting the cost-of-living adjustment made to the tax rate every year, keeping the limit at $50. If signed, it will be up to the city to put this into action.
McDermott said if the bill is signed into law, the city would not rush to levy a tax. After all, graduation is this weekend.
He said the council and city staff would look at what the best rate is, and he did not think the tax would start at the maximum allowed $50 rate. If signed, the City Council will take a look at the rate while formulating next year's city budget.
CLOSER LOOK AT UD STUDENT TAX House bill allowing Newark to tax University of Delaware per student gains momentum
"I don't want to just throw an arbitrary number out and say this is what the fee is going to be," he said. "I think we need to do an analysis of what the services cost and what would be the appropriate fee to set. So, that's going to take some work on city staff's part to see where we want to put that number out."
At its maximum rate, the city could pull in $2.4 million, which is about an 8% increase in revenue. Utility payments make up 75% of the city's revenue. It has already hiked property taxes by 7.5% for the 2024-25 budget.
UD's economic output is indelible. Blue Hens contribute more than $3 billion annually, according to a report in 2022. Despite its output for the city and state, the city collects only around $180,000 from the university annually from deals made in 1965 and 2002.
In an emailed statement to Delaware Online/The News Journal on May 23, UD said it shares an interest in Newark's improvements, financial viability and strength, and that the city's issues with rising costs reflect its own problems. UD's focus remains on access to its education.
"We prepare students, including thousands of Delawareans, for success in their professions, communities and beyond," the university said in its statement. "Our goal is and remains centered on providing an accessible and affordable pathway to a UD education for our students – those who contribute social, cultural and economic value to the City of Newark."
Shane Brennan covers Wilmington and other Delaware issues. Reach out with ideas, tips or feedback at [e-mail].
This article originally appeared on Delaware News Journal: Bill allowing Newark to tax UD awaits Meyer signature