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Nation's Largest Taxpayer Group Calls Local Delaware Officials' Vote to Hold $208 Million in Surplus a "Tax Grab"

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(Alexandria, VA) -- A unanimous vote by New Castle County Council Members Tuesday evening to create separate accounts for tax and sewer funds in order to retain a revenue surplus of $208 million amounts to little more than a tax grab, according to the 350,000-member National Taxpayers Union (NTU), which condemned the action in a statement today. The citizen group has 1,362 members in Delaware.

"By voting to hoard millions of hard-earned tax dollars that were accumulated illegitimately in the first place, New Castle County leaders have created a government slush fund, not genuine savings accounts," said NTU Director of Government Affairs Paul Gessing. "County officials claim that this money is necessary to 'bridge the budget gap,' but what it really adds up to is a scheme to overtax County residents in order to pay for future government spending excesses."

The Council's action was impelled by a February Chancery Court ruling on a lawsuit -- which charged illegal stockpiling of tax dollars -- brought against New Castle County by attorney Ronald Poliquin on behalf of taxpayers Richard Korn and Andrew Dal Nogare. In his ruling, Chancellor William Chandler declared that the $200-plus million in off-budget reserves were illegal, and prompted the County to take action in order to be in compliance with the law.

In late February, plaintiffs Korn and Dal Nogare amended the complaint to include two counts alleging that the County had also violated the Delaware Constitution, which limits the State from having any more than 5 percent of total revenues for the fiscal year in the general fund's reserve account. "NTU is supportive of efforts to roll back this tax grab, including legal action to compel New Castle County to return this money to taxpayers," Gessing said.

"Holding on to excess revenues in order to balance future years' budgets avoids the real crux of the issue: the County's 33 percent run-up in spending over the past several years," Gessing concluded. "If County Council Members would look for ways to cut back on unnecessary spending instead of legal loopholes to keep this ill-gotten revenue, New Castle County taxpayers would each have $700 more in their pockets."

NTU is a non-profit citizen group founded in 1969 to work for lower taxes, smaller government, and more accountability from elected officials at all levels. Note: For more information, visit www.ntu.org.

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