Uniformity Means Uniform Within Reasonable Classes: Delaware Supreme Court Upholds Split‑Rate School Taxation and Clarifies “Projected Revenue” Under HB242

Introduction

In Newark Property Association v. State of Delaware (Del. Nov. 12, 2025), the Delaware Supreme Court, per Chief Justice Seitz, affirmed the Court of Chancery’s post‑trial decision rejecting constitutional and statutory challenges to House Bill 242 (“HB242”). HB242 authorized New Castle County school districts to implement temporary split‑rate property taxation—permitting different real estate tax rates for residential and non‑residential property—after the county’s first comprehensive reassessment since 1983 dramatically shifted tax burdens onto residential property owners.

Plaintiffs—trade associations representing owners of apartments, manufactured housing, and hotels—limited their appeal to two questions:

Whether Article VIII’s Uniformity Clause prohibits the General Assembly from authorizing split‑rates that distinguish between residential and non‑residential real property; and
Whether New Castle County’s post‑HB242 correction of a small population of classification errors violates HB242’s “revenue neutrality” limitation by causing districts to “collect” more than initially projected.

The Court answered both questions against the Plaintiffs: the Uniformity Clause allows reasonable legislative classifications with uniform taxes within each class, and HB242’s revenue cap looks to “projected,” not “actual,” revenues at the time school districts reset their rates, permitting later clerical corrections without statutory violation.

Summary of the Opinion

Facial challenge fails. Plaintiffs brought only a facial challenge. Because there are plainly constitutional applications of HB242, the challenge fails.
Uniformity Clause permits reasonable classes. Article VIII, § 1 requires uniformity within the “same class of subjects,” and Delaware’s original public meaning and long‑standing precedent allow the General Assembly to create reasonable property tax classes (here, residential and non‑residential) so long as taxes are uniform within each class.
HB242’s classifications are reasonable. Defining smaller dwellings as residential and treating larger apartment buildings and commercial property as non‑residential is rational and not “purely arbitrary,” particularly given the law’s short‑term remedial purpose after reassessment shock.
“Projected” revenue neutrality is measured at the reset. HB242 caps “revenue projected to be collected” under new split rates at the amount “projected” under the original 2025–2026 warrants. The cap applies at the time districts reset their rates. Subsequent county error corrections to the tax roll—like reclassifying misidentified parcels—do not violate HB242, which purposefully uses “projected,” not “actual,” revenue.
As‑applied arguments are out. Complaints about how “non‑residential” was implemented would be as‑applied challenges; Plaintiffs abandoned them on appeal.
Judgment affirmed. The Supreme Court affirmed the Court of Chancery and issued the mandate forthwith.

Background

Following the Court of Chancery’s decision in In re Delaware Public Schools Litigation (2020), which found county assessment rolls violated the “True Value” statute and Uniformity Clause due to decayed assessments, New Castle County completed a countywide reassessment effective July 1, 2025. The reassessment revealed a large shift in the tax base from non‑residential to residential property, producing substantial tax increases for residents.

The County adopted split‑rates for county taxes in June 2025. School districts initially set a single uniform rate using the new assessments. After public outcry, the General Assembly enacted HB242 (Aug. 12, 2025), authorizing school districts in New Castle County, for 2025–2026 only, to reset rates on a split basis (non‑residential rate at least equal to, and not more than twice, the residential rate), provided “projected” revenue under the new warrants did not exceed the “projected” revenue under the original warrants.

After split‑rates were adopted, the County identified misclassifications affecting less than one percent of parcels, converting 994 properties from residential to non‑residential and 415 in the opposite direction. The school districts estimated the net effect would increase total collections about $4 million above the original projections—prompting the litigation.

Analysis

Precedents and Authorities Cited

Text and original public meaning. The Court started with the language of Article VIII, § 1—“All taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax”—and the methodology set out in Capriglione v. State ex rel. Jennings for discerning the framers’ intent. The provision regulates uniformity within classes; it does not limit legislative power to define classes in the first place.
1897 Constitutional Convention Debates. Delaware borrowed Pennsylvania’s uniformity clause language, but the 1897 debates showed no intent to restrict classification; the focus was on avoiding favoritism within classes and preserving legislative flexibility. Delegates emphasized that if one within a class is exempted, all similarly situated must be.
Delaware’s classification line of cases.
- Philadelphia, B. & W. R. Co. v. Mayor & Council of Wilmington (Del. Ch. 1948): The legislature may classify property for taxation if the classification is reasonable and not purely arbitrary; inherent differences, including use, may justify classification.
- Aetna Cas. & Sur. Co. v. Smith (Del. 1957): Confirmed non‑arbitrary classification power.
- Green v. Sussex County (Del. Super. 1995), aff’d (Del. 1995): Reiterated the reasonableness standard and burden on the objector.
- Conard v. State (Del. Super. 1940): Uniformity means same treatment for those similarly situated; reasonable classifications are proper.
Misplaced reliance on Pennsylvania. Plaintiffs cited Pennsylvania’s modern no‑subclassification rule (e.g., Valley Forge Towers), but Delaware noted that when Delaware adopted its clause, Pennsylvania permitted legislative classification. Pennsylvania’s later divergence is not controlling in Delaware.
In re Delaware Public Schools Litigation (Del. Ch. 2020): Addressed intra‑class non‑uniformity from outdated assessments. It did not prohibit inter‑class rate differences supported by reasonable classifications.
In re Zoller’s Estate (Del. 1961): Clarified that progressive rates can apply to non‑property taxes (estate tax context). It did not impose a stricter standard for real property classifications.
Statutory and interpretive canons. The Court relied on Salzberg v. Sciabacucchi’s canon giving effect to each word—here, the General Assembly’s deliberate use of “projected” rather than “actual.” It contrasted HB242’s wording with 14 Del. C. § 1916(b), which uses “actual” in a different post‑reassessment cap, underscoring that “projected” was chosen to accommodate later changes.
Standard of review and facial posture. Constitutional questions and statutory interpretation are reviewed de novo (CML V, LLC v. Bax). Facial challenges carry a heavy burden and fail if any constitutional application exists (Del. Bd. of Med. Licensure & Discipline v. Grossinger; Republican State Comm. v. Dept. of Elections).

Legal Reasoning

1) Uniformity Clause

The Court engaged in a plain‑text and original‑meaning analysis: uniformity is required within the “same class,” implying the legislature may draw classes, subject to reasonableness. The 1897 debates confirmed the framers’ concern was arbitrary exemptions within a class, not limiting the General Assembly’s ability to classify the objects of taxation.

Delaware’s precedent has long held that classification is permissible so long as it is not “purely arbitrary,” and courts presume reasonableness, recognizing that taxation is not an exact science. Applying this settled doctrine, the Court found HB242’s residential/non‑residential split is reasonable:

Legislative purpose. HB242 was a short‑term, remedial response to reassessment‑driven tax shock on residents, with a policy judgment that business entities were better positioned to absorb rate increases.
Coherent boundaries. Treating single‑family and small multi‑unit dwellings as residential, and larger apartment buildings and commercial properties as non‑residential, tracks common fiscal and federal classifications; any contour imperfections do not render the classification arbitrary.
Uniformity preserved within classes. There was no claim that the school districts applied non‑uniform rates within either class.

The Court rejected Plaintiffs’ reliance on Public Schools and Zoller’s Estate. Public Schools condemned intra‑class disparities caused by decayed assessments; it did not preclude inter‑class rate differentiation. Zoller’s Estate addressed progressive rates in a non‑property context and imposed no special strictures on real property taxation classifications.

2) HB242’s “Revenue Neutrality” Limitation

HB242 allowed districts to reset split rates so long as “the revenue projected to be collected” under the new warrants “does not exceed the total amount of revenue the district was projected to collect” under the original 2025–2026 warrants. The Court construed this language to:

Measure the cap at the time of reset. The statute requires a projection at the time the new rates are set; it does not mandate ongoing conformance to that projection.
Accommodate dynamic rolls. The General Assembly used “projected”—not “actual”—to accommodate normal post‑levy events (appeals, delinquencies, supplemental assessments, reclassifications). Demanding a perpetual “true‑up” would be administratively unworkable and would undermine the accuracy of the tax roll by discouraging error correction.
Allocate responsibilities correctly. The revenue cap appears in HB242 § 1(1), which regulates school districts’ rate‑setting. County corrections to the assessment roll were not subject to a separate neutrality cap, and the districts complied at the reset point.

Because the districts’ projections at the time of reset did not exceed the original projections—and the later $4 million increase flowed from legitimate error corrections—the statute was not violated.

Impact and Implications

Reaffirmed constitutional standard. The decision cements a clear rule: under Article VIII, the General Assembly may establish reasonable classes of property for taxation; the uniformity requirement runs within each class. This aligns with decades of Delaware precedent and the 1897 framers’ intent.
Green light for split‑rate school taxation. New Castle County school districts’ split‑rate systems, bounded by non‑residential ≤ 2× residential and overall projection neutrality at reset, are constitutionally sound. Other Delaware jurisdictions considering classification‑based rate policies have strong guidance on how to structure them.
Drafting and administration lessons.
- When the legislature uses “projected,” courts will not read it as “actual.” Drafters can manage post‑levy variability by selecting terminology intentionally.
- Taxing authorities should document the projection at the time of rate setting; later corrections (appeals, reclassifications) can proceed without fear of violating a projection‑based cap.
- Uniformity scrutiny remains acute for intra‑class disparities. Public Schools still polices assessment uniformity within each class; selective assessment practices that create intra‑class disparities remain vulnerable.
Scope of future challenges. The Court emphasized Plaintiffs pursued only a facial challenge. Parties who believe particular implementations are unreasonable (e.g., anomalous classification lines or discriminatory within‑class treatment) must bring as‑applied claims supported by concrete evidence.
Originalist interpretive approach. The opinion’s reliance on the 1897 debates and divergence from modern Pennsylvania doctrine underscores Delaware’s commitment to its own constitutional text, history, and precedent in matters of state taxation and local finance.

Complex Concepts Simplified

Uniformity Clause (Art. VIII, § 1). Requires consistent taxation of those in the same tax class. It does not forbid the legislature from creating classes (e.g., residential vs. non‑residential). The yardstick is reasonableness of the classification and uniform taxation within each class.
Facial vs. as‑applied challenge. A facial challenge argues a law is unconstitutional in all applications—a high bar. An as‑applied challenge targets a specific application or implementation of a law.
Split‑rate taxation. Setting different tax rates for different classes of property (e.g., a higher rate on non‑residential than residential property), with uniformity preserved within each class.
Projected vs. actual revenue. “Projected” is an estimate made at a particular time based on then‑available data. “Actual” is the amount ultimately collected. The choice of term in a statute matters—projection‑based caps allow later roll corrections without violating the cap.
Tax warrant. The instrument or formal authorization by which a taxing authority levies and collects a property tax for a fiscal period.
Inter‑class vs. intra‑class uniformity. Inter‑class differences (e.g., residential vs. non‑residential) are permitted if classes are reasonable. Intra‑class uniformity demands that properties within the same class be treated evenly; failures here trigger constitutional problems (as in Public Schools with outdated assessments).

Conclusion

Newark Property Association confirms two core principles of Delaware tax law. First, the Uniformity Clause does not freeze “real property” into a single class. The General Assembly may authorize reasonable classifications—like residential and non‑residential—and require uniform taxation within each class. Second, HB242’s revenue cap is a projection‑time safeguard, not a perpetual accounting constraint; it does not preclude subsequent tax roll corrections that alter collections after the rates are reset.

In the wake of a generational reassessment, the decision empowers school districts to use targeted, time‑limited tools to mitigate tax shock while preserving intra‑class uniformity and administrative integrity of the rolls. It also offers a clear interpretive signal: Delaware courts will read the Constitution consistent with its original public meaning and its own precedents, and they will respect legislative line‑drawing in taxation so long as it is reasoned and even‑handed within classes.