A Tax Proposal Taken in Stride

But although home values in some areas have tripled and quadrupled in the past decade, their assessed values in the city's financial books have largely stayed the same. The city still uses assessment formulas from 1968 -- when the median annual household salary was $7,743 and a gallon of gas sold for 34 cents, a time when a man walking on the moon was still a dream and the New York Jets had a shot at the Super Bowl.

"It's crazy. Everyone knows it's crazy," City Manager Greg Ferrese said. Walking along Rehoboth's boardwalk last week, he pointed out several beachfront mini-mansions and rattled off their tax bills and assessments.

"Something like this could go for up to $5 million today," Ferrese said, nodding toward a small mansion with a blue-tiled roof and glass windows all along its ocean-side view. The home last sold for $3.1 million in 2001, but as far as the city's concerned, it is still worth $143,680.

There has been talk of an assessment, but unlike the proposed tax increase, that plan has not gained serious traction.

It is a matter of politics, Ferrese explained. Most residents associate assessment with higher taxes, when in fact an assessment would probably not raise annual tax revenue much.

A three-decades-old provision in the city's charter bars officials from collecting more than $1 million in property taxes each year. With the city close to that cap, an assessment would lower Rehoboth's tax rate and produce little change in the total taxes collected.

Most jurisdictions have regular cycles for assessments. Maryland's counties, for example, assess a third of the land every year. But Sussex County, which contains Rehoboth, hasn't had an assessment since 1974. And although home values in such coastal regions as Dewey Beach and Fenwick Island have soared, those in inland areas such as Bridgeville have risen much more slowly.

"It means the people who are poorest in the county, who need the tax break most are getting the worst of the deal," said Mike Mock, a Sussex resident and real estate broker, who has pushed for assessments for two decades. "It's an issue of fairness."

There's also the issue of cost. The bill for a countywide assessment could run as much as $8 million and bring in little increased revenue in return.

"If we did a total reassessment, about a third of the county [tax bills] would decrease, a third stay the same and a third increase," said Sussex's assessment director, Eddie Parker, who has pushed for assessments for much of his 26 years with the county. But after making his case to countless committees, legislators and residents, he has learned not to get his hopes up.

"It's not like people are knocking down my door because they think their assessment is unfair. We're still getting calls from people wanting to know if what they got is a monthly or quarterly bill when in fact it's their annual bill."