Gov. Meyer signs bill allowing Newark to tax University of Delaware

• The tax, capped at $50 per student, could generate $2.4 million for the city.
• The University of Delaware acknowledges the city’s financial needs and aims to maintain affordable education.
• The Newark City Council will determine the exact tax rate, considering student-related expenses and inflation.

The city of Newark is now allowed to tax the University of Delaware for every Blue Hen.

Gov. Matt Meyer signed a bill on June 24 amending Newark’s city charter allowing the city to levy a per-student tax on UD, which is by far the largest economic and cultural force in the city. The public university sits on about 40% of the city’s land, but is nontaxable.

Newark’s government has been searching for new revenue streams amid cost and tax increases. Most of the city’s revenue comes from utility payments, which have increased.

The bill was introduced in January by Democratic State Rep. Cyndie Romer, from Newark. It passed both the House and Senate unanimously.

“We’re happy the governor saw this as fit to sign,” Newark Mayor Travis McDermott said.

The law allows the city to tax up to $50 for every student, which could rake in an additional $2.4 million in tax revenue. The city collects around $180,000 annually from UD from deals made in 1965 and 2002. In addition to being a local pillar, UD is responsible for billions of dollars in statewide economic output every year.

In a statement to the News Journal from May, the University of Delaware said it has a shared interest in Newark’s improvements. It remains committed to access to its education.

“We are understanding of and sympathetic to the city’s needs, which — in many ways — reflect ours, due to inflation-induced costs and other financial pressures,” the statement from May 23 reads. “Our goal is and remains centered on providing an accessible and affordable pathway to a UD education for our students — those who contribute social, cultural and economic value to the City of Newark.”

It is now up to the City Council to come up with how much they plan on taxing the institution. The new tax rate might not be at the maximum rate, either. McDermott said the council will find out how much the city is spending on students and then find a rate to reflect that, while leaving room for inflation-related hikes in the future.

Hearings to shape the city’s next annual budget are coming up, and this new revenue stream would need to be factored in. McDermott said he wants a tax rate established by the time budget hearings begin, which should be within the next month.

Shane Brennan covers Wilmington and other Delaware issues. Reach out with ideas, tips or feedback at slbrennan@delawareonline.com.