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Lewes, Delaware
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May 1, 1998     Cape Gazette
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18 - CAPE GAZETTE, Friday, May I May 7, 1998 Beach task force taking hard look at charging renters to raise funds By Michael Short The state beach replenishment task force is likely to consider a rental tax in order to raise money for beach replenishment. The task force met again on Fri- day, April 24, in a no-holds barred discussion of ways to raise money to fund beach replenishment. The discussion touched on county funding, a beach replenishment tax district, rental taxes or chang- ing the state's existing accommo- dations tax. The committee, chaired by Rep. Shirley Price, D-Millville, Rep. John Schroeder, D-Lewes, and Sen. George H. Bunting Jr., D- Bethany Beach, threw all the op- tions on the table. No, decisions .were made  but it was clear that a rental tax was considered one of the most promising options. That's because there is currently no state tax on rental units, prompting some to at- gue that renters get the equivalent of a free ride. "We need to capture some of that," Bunting said. "It is just fair." Currently, 1 percent of Delaware's accommodations tax is used for beach replenishment. Towns are reimbursed for their share of the cost through that ac- commodations tax. But the tax only affects hotel and motel accommodations; there is no state rental tax, although many local towns have separate rental taxes. Cindy Small of the Sussex County Convention and Tourism Commission estimates that there are 3,600 renters in Rehoboth Beach's 19971 area code. Such figures are far higher than the number of hotel rooms that are taxed. "The real ticklish issue is that some municipalities already have it," Schroeder said, meaning a Sussex judiciary wants a building to bank on By Rosanne Pack Delaware judicial officials have taken their case to the state Legis- lature's Joint Bond Bill Commit- tee as they attempt to alleviate what is described as serious over- crowding and resulting delays in scheduling. Judges have recom- mended that the state consider purchasing the Wilmington Trust bank building located on The Cir- cle in Georgetown; the cost of the building is reported to be approxi- mately $750,000. Rep. John Schroeder, D-Lewes, said he thinks the opportunity to buy the bank building is too good to pass up. The legislator sits on the bond committee and he said he advised committee members that purchasing the building would be a smart move. "We have [Supreme Court Jus- tice] Randy Holland and [Sussex Chancery Court Judge] Bill Chan- dler, all having to work out of the Family Court Building, and of course, Family Court has its own busiliess to carry out," Schroeder said. "Here is a building in good repair, on The Circle, near the oth- er judiciary; I don't believe it will be passed up." The Department of Administra- tion will evaluate purchasing the building along with other alterna- tives, such as providing additional court space in an annex to the ex- isting courthouse. Members of the judiciary have stated that they would prefer the three-story colonial Wilmington Trust building, which dates from the late 1800s. It has undergone several renovations since it was first built as the Brick Hotel; it is being sold because the bank is building a new facility. Moms, you should make the men cook for you: Our Men RehOlleth CountryYGrill lie Mother's Day Reservations  226-5220 Rt. 1, Rehoboth Outlet 2, Rehoboth Beach Turn By Exxon Station Steaks Seafood Comfort Food Bakery rental tax could mean some com- munities pay more than their share. But it's far from the only idea that was discussed. John Hughes, the director of the Department of Natural Resources and Environ- mental Control's Soil and Water Conservation Division called the session blue sky hipshooting, meaning everything is potentially on the table. Hughes has supported a beach tax district concept, which would tax people based upon how much they benefit. The closer you are to the beach, the more you would benefit. Bunting has also expressed sup- port for such an idea. Bunting has also suggested that the 1 percent state share be in- creased to 2 percent. He said per- haps it could also be used for oth- er efforts, like disaster relief, to make it more palatable to upstate legislators. The other way that beach re- plenishment, the placement of ex- tra sand on Delaware beaches, is funded is through an annual allo- cation in the state bond bill. The bond bill is used for capital im- provement projects like libraries and museums, and there is usually $1 million set aside annually. Those are the two current ways beach replenishment is funded. Towns help pay, but are reim- bursed through the accommoda- tions tax. The county currently pays nothing and Bunting said he does not think the county will take on the responsibility of helping pay the bill. County Council President Dale Dukes and County Administrator Bob Stickels have both said it's unlikely the county will get in- volved. Price said that this is a state is- sue and that everyone has to play a role. Bunting said, "we have a lot of folks who use our beaches and I think they would be willing to pay to help replenish them." "We're both nervous about the condition of Rehoboth's beach," Hughes told Rehoboth Beach Mayor Sam Cooper. South Bethany Beach Mayor Joseph McHugh suggested a restaurant tax. Schroeder said the intent of the next meeting is to explore all funding options. Schroeder has al- ready said he wants to move fast in order to make some recommen- dations to Delaware's legislature. A look at local rental taxes Many communities already have taxes on rental properties. A state tax is being mulledover as a way to fund beach replenishment, but many beach communities have beaten the state to that funding punch. Robert Henry with the Department of Natural Resources and En- vironmental Control (DNREC) compiled this list of local rental or accommodation taxes. Fenwick Island - A 3 percent tax on hotel and motel accommo- dations, in addition to the state tax, and a 7.5 percent tax on season- al rentals. Dewey Beach - A rental license fee, which most other towns al- so share. But Dewey has no rental tax. Bethany Beach - A 3 percent tax on hotel and motel accomoda- dons, in addition to the state tax, and a 5 percent rental tax. Rehoboth Beach - A 3 percent residential renter tax, which, with the license fee, brings in more than $400,000 annually in income, according to Henry. South Bethany - A 6 percent tax on commercial and residential renters RE-ELECT FOR MAYOR Saturday, May 9, 1998 DEPENDABLE DEDICATED INVOLArED PROVEN LEADERSHIP - PAID FOR BY FRIENDS OF GEORGE SMITH -