Dewey Beach Mayor Declares "War" on House Bill - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Dewey Beach Mayor Declares "War" on House Bill

DEWEY BEACH, Del. - The mayor of Dewey Beach has declared "war" on a Delaware House Bill. 

"This is war," Mayor Diane Hanson said. "Because this is so important."

Hanson was talking about House Bill 333, which would limit the taxing powers of the towns and cities of Delaware if it were to pass. The primary sponsor for this bill is Democratic Speaker of the House Peter Schwartzkopf, of the Rehoboth Beach area. The bill came out of committee on Wednesday. 

The bill clarifies the "All Powers" clause that is present in 31 of the 57 municipalities in the first state. Some towns such as Dewey Beach have interpreted this clause as permission to impose new taxes, without getting the approval of the state assembly as typically needed for changes to the charter. 
Schwartzkopf said that the new bill would make it clear that towns need to go through the state house first. 

"The intent of the bill is to reaffirm the fact that the general assembly maintains providence over taxation in our state," he said. "So if a town wants to put a new tax in, they have to come to us for us to vote and put it into their charter."

At first, the bill also included a section that would have restricted towns from collecting fees beyond mere administrative costs on businesses, professions, or occupations as well. This part of the bill prompted concerns from nearly every municipality in the state. In an amendment Wednesday, this part of the bill was removed. 

After the amendments were made, both the Sussex County Association of Towns as well as the Delaware League of Local Governments reversed their initial position of opposition.

But in Dewey Beach, the bill has stirred up some serious debate, as the Town Council has unanimously announced their opposition to the bill. They voted Monday to spend up to $50,000 on lobbyists or legal advice, in an effort to defeat the bill. Hanson said the bill threatened the town's autonomy. 

"Towns and their local officials know more about that town than anyone else," she said. "They know what's fair and reasonable. They know what people can accept or not accept..."

Schwartzkopf said the town's understanding of the "All Powers" clause is fundamentally flawed. 

"I think she's wrong," he said. "I think she's terribly wrong. The bottom line is the all powers clause - it's not even enumerated what that all means. It doesn't say in the all powers clause we give you the right to tax." 

Central to this conflict is the fact that the town is currently entangled in a lawsuit against business owner Alex Pires, in which the exact same issue is being debated. Pires sued the town in February of 2013, saying that the town lacked the authority to create any new taxes without state approval. That case was eventually dismissed by the courts, but it is now on it's way to the Delaware Supreme Court. 

The case started when Pires objected to high business license fees, which his attorneys argued were high enough to be considered a tax. Hanson said the court decided the town was allowed to tax. For this reason, she said the bill would undercut not only the town but the court system as well. 

Hanson said Schwartzkopf was taking action in order to support Alex Pires, and his case. 

"He's not really representing the people right now," she said. "Or the town. He's representing businessmen. The wealthy ones over the needs of the people."

The state representative vehemently denied this accusation. He said the bill is meant to follow constitutional law, saying that taxing rights have long come from the state, and not the towns. 

"If we as a state are letting you as a town operate, we're telling you what you're allowed to do," he said. "It doesn't mean you can do what ever the heck you want to do. You're allowed to do what's in your charter." 

Schwartzkopf said the country's founding fathers purposely put the power to tax in the hands of the state, so that increasing taxes would be difficult.

"Why does she think that we would be willing to take that protection for the citizenry - of a 3/5 vote - and give it to three people on a town council..." he asked. "Cause that's all she says you need to pass on a town council. It's 3 people." 

But back in Dewey Beach, Hanson had a clear message for her state representative. 
"Stay out of our business," she said. "We won the lawsuit. Let it stand. Let the courts decide." 
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