Special Session of State Senate Scheduled for Thursday, November 6, Legislation to Extend Deadline for NCC Property Tax Payments on the Agenda

A special session of the Delaware State Senate is scheduled for this Thursday, November 6th at 1:00 p.m. The Senate Agenda includes Senate Bill 206 (Walsh) which was introduced today (November 4th). The bill’s synopsis reads as follows:

An extension of the deadline for payment of property tax bills in New Castle County for the 2025-2026 tax year established under Chapter 135 of Volume 85 of the Laws of Delaware (House Bill No. 242, as amended by House Amendment 1, of the 153rd General Assembly) is required because property tax invoices could not be timely delivered due to subsequent, unforeseen expedited litigation before the Court of Chancery (Newark Property Association, et al. v. State of Delaware, et al., C.A. No. 2025-1031-LWW). The current deadline is November 30, 2025, however this Act changes the deadline to December 31, 2025, to ensure that taxpayers have a commercially reasonable period to review and pay property tax invoices and to help prevent the inequitable imposition of statutorily-mandated penalties and interest.

This legislation was introduced following a Delaware Chancery Court ruling issued by Vice Chancellor Lori Will on Thursday, which is discussed later in this update.

 

Del. Chancery Court Ruling Upholds House Bill 242 (Split Property Tax Rates, NCC)

In an October 30 ruling, Vice Chancellor Lori Will upheld the constitutionality of House Bill 242 which was enacted (w/ HA 1) during the August 12 special session of the Delaware House and Senate. House Bill 242 was among a number of bills enacted in response to concerns regarding residential tax rates in New Castle County resulting from the recent statewide property reassessment.

 

Vice Chancellor Will stated the following in the conclusion of her opinion:

The General Assembly’s enactment of HB242 represented a swift policy response to an unexpected and significant tax burden shift onto residential homeowners after a court-ordered reassessment. The plaintiffs, representing nonresidential property owners who now bear a larger share of that burden, have challenged the legislature’s solution and its implementation. For the above reasons, each of the plaintiffs’ claims fails, and judgement is entered for the defendant on all counts. The only relief warranted is that the County must include with its tax bills a notice of any reclassification and a description of the new policy for disputing reclassifications. The plaintiffs’ request for declaratory and injunctive relief is otherwise denied. The parties are to confer on a proposed final order to implement this decision, […]
 

Under the provisions of HB 242, payment of property tax bills is due on November 30. HB 242 applies to the 2025-2026 tax year. As a result of the legislation and the Chancery Court ruling, the split residential – nonresidential tax rates will apply. [Note: Should the General Assembly pass SB 206, and if Governor Meyer signs the bill, that deadline would be extended to December 31 of this year.]

In September, a group of plaintiffs including the Delaware Apartment Association, Delaware Hotel and Lodging Association, and the First State Manufactured Housing Association filed suit against the State of Delaware, New Castle County, and the school boards for districts located in New Castle County (including the Vocational & Technical School District, which encompasses all of New Castle County.)

Uncertainty Results from Apparent Mixed Messaging from White House on SNAP Benefits following Federal Court Order; White House Press Secretary Sought to Provide Clarification in Tuesday Press Briefing
 

Following and oral ruling on Friday, October 31st, and a written ruling the next day, by a federal judge in District Court in Rhode Island, it was reported on Monday that the Trump Administration would issue partial Supplemental Nutrition Assistance Program (“SNAP”) benefits for the month of November in an amount that would use the totality of funds in a dedicated previously appropriated USDA reserve account. The roughly $4.65 billion in benefits would allow for partial issuance of benefits which would cost $9 billion if issued in full.
 

In a social media post earlier today (Tuesday, November 4th), President Trump contradicted that reporting in a social media post which stated that SNAP benefits “will be given only when Radical Left Democrats open up government, which they can easily do, and not before.” In a White House press briefing today, Press Secretary Karoline Leavitt appeared to either walk back or clarify those remarks stating “[t]he administration is fully complying with the court order” and indicated that President Trump was referencing benefits due following the court ordered disbursement. She also said that “recipients need to understand that it is going to take some time to receive this money” and that the administration would issue “as much as we can, and as quickly as we can, but its going to take some time.”
 

42 million people in America rely on SNAP to meet their nutritional needs. According to FY 2024 data, 11.2% of Delawareans rely on SNAP assistance, which amounted to roughly 117,000 people. Based on current state government sources, that number now exceeds 120,000. The most pressing matters are the immediate implications for families and individuals who rely on SNAP. There are additional and pressing concerns from a community and business/economic standpoint. (An update forthcoming this week will provide additional detail.)

 

On October 31, a Federal Judge Ordered the Payment of November SNAP Benefits

In an action brought by a number of plaintiffs in response to the pending November 1 cessation of benefits to the 42 million Americans who rely on the Supplemental Nutrition Assistance Program (“SNAP”), Judge JohnJ. McConnell, Jr. of the United States District Court for the District of Rhode Island, issued an oral order on Friday, October 31 instructing the United States Department of Agriculture and the Trump Administration to issue November SNAP benefits Monday, November 3.

 

Judge McConnell’s Friday, October 31 oral order was followed by a written order on Saturday, November 1. In his written ruling, Judge McConnell stated the following:

In summary, the Government must make full SNAP benefit payments by Monday, November 3, 2025. If they choose to use their discretion and not use other funds in [addition] to the contingency funds to make full payment, then they must make a partial payment of the total amount of the contingency funds and they must do this by Wednesday, November 5, 2025.

At issue is assertion by the Administration that the federal government shutdown (now more than one month in duration) precludes the issuance of SNAP benefits as of November 1. The plaintiffs, among many other individuals and organizations throughout the country, argue that a roughly $4.65 billion (some sources put the number at or around $6 billion) contingency reserve previously appropriated by Congress for the purposes of continuing SNAP payments during government shutdowns, should be used, in addition to other existing reserve funds to issued SNAP benefits. The Trump Administration has asserted that the shutdown precludes such payments.
 

In response to Judge McConnell’s oral ruling on Friday, President Trump signaled a willingness to issue benefits but indicated that additional guidance would be needed from the Court. Administration lawyers filed a brief requesting the same. In the McConnell’s November 1 written ruling, he stated “So, here’s the ORDER and here’s the written direction from the Court.” Judge McConnell also thanked President Trump for the Administration’s timely response in the footnotes of his written order. A key excerpt from the written ruling follows:

There is no question that the Congressionally approved contingency funds must be used now because of the shutdown; in fact, the President, during his first term issued guidance indicating that these contingency funds are available if SNAP funds lapse due to a government shutdown.

 

The order allowed wo options to issue the SNAP benefits. The first option would involve the payment of the entire $9 billion in SNAP benefits for November by the end of the day on Monday, November 3. This option would require some combination of other previously appropriated funds (such as drawing from a $23 billion reserve fund set aside for child nutritional assistance to the states) and allowing for some portion of the $6 billion in SNAP reserve funds to be used. N The second option, should the Administration choose to forego the use of other discretionary funds, requires that the entire $6 billion in the SNAP reserve be used to disburse benefits by Wednesday, November 5. This option would result in partial benefits as the total expense for full SNAP benefits for the month totals roughly $9 billion.
 

It remains to be seen what impact this ruling will have regarding the current State of Emergency in Delaware declared by Governor Matt Meyer in response to the SNAP benefits crisis. Governor Meyer and legislative leaders from both parties are seeking to assist Delawareans impacted by the current SNAP benefits crisis. The NCC Chamber thanks them for their efforts. A message from the NCC Chamber with additional information on the issue and how you and/or your organization can help is forthcoming this week. In the interim, you can visit the Food Bank of Delaware “Donate” page which provides information on ways you can contribute to those in need. To quote Governor Meyer “we are a state of neighbors,” the NCC Chamber agrees with the Governor and hopes for a swift resolution that will provide the sustenance on which more than 120,000 of our neighbors rely.

Governor Meyer Calls Extraordinary Session to Address Budget Shortfall
 

On Friday, October 31, Governor Meyer announced that he is calling a special session on Thursday, November 13 at noon to address the projected structural shortfall indicated by the October projections of the Delaware Economic and Financial Advisory Council (DEFAC).

The Delaware Constitution allows a governor, to call a special session on “extraordinary occasions”. [Del. Const. art. III, §16].

Decoupling Certain Delaware Tax Provisions from the Federal Tax Code Among Proposals Under Consideration to Address State Budget Concerns.

As is the case with a number of states, Delaware “piggybacks” on the U.S. Tax Code for certain tax code provisions (personal and corporate). The federal reconciliation bill passed in June and signed into law on July 4th (the One Big Beautiful Bill Act, H.R. 1, 119th Congress) included a number of corporate tax breaks, two of which figure prominently in the current discussion regarding decoupling in Delaware?.

The first is what is referred to a “bonus depreciation,” which, allows businesses to immediately deduct the cost of qualifying assets instead of depreciating them over time – a provision restored by H.R. 1 that had been unavailable for a number of years. The second is the restoration of the ability to deduct the cost of research and development (R&D) costs up front instead of amortizing the deduction over five years. For forty four years prior to 2022, companies had been able to immediately deduct R&D costs up front. Provisions in the Tax Cuts and Jobs Act of 2017, which took effect in 2022, set forth requirements that domestic R&D costs needed to be amortized over five years and foreign R&D costs be amortized over 15 years. H.R. 1 (the One Big Beautiful Bill Act), restored the immediate deduction for companies.i

According to Spotlight Delaware, the restoration of these provisions resulted in the Delaware Economic and Financial Advisory Council forecasting a reduction in General Fund revenue resulting from the Delaware Corporate Income Tax of $155.1 million for FY 2026 (the current fiscal year) and by $169.7 million for FY 2027 (which begins on July 1 of 2026). Spotlight also reports that 24 states have already decoupled from the federal code where bonus depreciation is concerned but no states have as yet done so where R&D cost deductions are concerned. Additionally, the article noted that 10 states had extended the R&D deduction during the three years since 2022 that the Tax Cuts and Jobs Act amortization provisions were in place.ii

NOTE: The NCC Chamber is gathering information and soliciting input on this potential proposal. As of this writing there are differing opinions between the Republican and Democratic Caucuses in the Delaware House and Senate, and among observers as to the implications of decoupling. The Chamber is seeking to assess the potential impact on economic development and on businesses in Delaware (particularly among its membership). Input is welcome and can be sent to Fitzgeraldj@ncccc.com. Please include  “decoupling proposal” in the subject line of the email.

October DEFAC Projections (from October 20th Update)

At the Monday, October 20th meeting of the Delaware Economic and Financial Advisory Council (DEFAC). the panel released a forecast indicating that the reductions in federal funding resulting from the enactment of the federal reconciliation bill, also known as the One Big Beautiful Bill Act, H.R. 1, 119th Congress (OBBA), are likely to result in a substantial structural shortfall for Delaware state government.

Current forecasts indicate that the state appropriations limit for FY 2027 will be $352.1 million less than the current FY 2026 number. The State’s Budget Stabilization Fund has a current balance of $469.3 million. However, as was indicated by OMB Director Brian Maxwell during this past February’s budget presentation, absent policy changes or budget cuts, and assuming 5% budget growth for FY 27 and FY 28 respectively, the state would need to draw $325 million from the Budget Stabilization Fund for FY 27. In FY 28, he indicated that the state would need to exhaust the remainder of the fund and would still face a shortfall of roughly $400 million. His guidance was based on projections from early this year and before the enactment of H.R. 1 at the federal level. 

 

One DEFAC meeting remains for this calendar year (December). The revenue projections released at the December meeting will form the basis for the FY 2027 Governor’s Recommended Budget package.

[NOTE: Given the Medicaid, Medicare, and SNAP Work Requirement provisions – among other items in the OBBA – and uncertainty regarding what additional fiscal impact they will have on Delaware’s budget, the scope and scale of the actual fiscal impact is unclear at this time. The Meyer Administration and the General Assembly have discretion to decide whether and how they address any impact from the bill’s provisions. A constitutional balanced budget requirement with households and small businesses already facing financial pressures makes such decisions particularly challenging.]
 

i Tabeling, K. (2025, October 7). Delaware hopes to see gains with the return of R&D expensing. Delaware Business Times.

https://delawarebusinesstimes.com/insider-only/delaware-hopes-to-see-gains-with-the-return-of-rd-expensing/

ii Owens, J. (2025, October 30). Delaware legislature may decouple tax code to thwart Trump cuts. Spotlight Delaware.

https://spotlightdelaware.org/2025/10/29/delaware-couple-tax-code/