Newark Property Association v. State, 348 A.3d 497 (Del. Ch. Oct. 30, 2025), aff’d, — A.3d —, 2025 WL 3157392 (Del. Nov. 12, 2025)

Connolly Gallagher attorneys successfully defended the State of Delaware and Governor Matthew Meyer in expedited litigation against a challenge to House Bill 242’s (“HB 242”) allowance of School Districts to set split-tax rates among residential and non-residential properties.

The General Assembly enacted HB 242 to equalize the burden among residential and non-residential property owners in response to the sharp rise in residential property taxes due to the first reassessment in over forty years following the Court of Chancery’s decision in In re Delaware Public Schools Litigation. 

Several non-profit trade organizations sought declaratory and injunctive relief to bar the application of HB 242, alleging that HB 242 violated the Uniformity Clause of Delaware’s Constitution, due process, and various state statutes. In addition to asserting claims against the State of Delaware and Governor Meyer, Plaintiffs also brought claims against New Castle County’s six School Districts, County Executive Marcus Henry, and Chief Financial Officer David Del Grande. 

The Court of Chancery ruled in favor of the Defendants on all counts. Rejecting Plaintiffs’ attempt to apply Pennsylvania law, the Court of Chancery held that Delaware precedent allows for the classification of residential and nonresidential properties under Delaware’s Uniformity Clause.

Plaintiffs Below, Appellants raised two issues on appeal: (1) whether HB 242 was constitutional under Delaware’s Uniformity Clause and (2) whether interpretation of HB 242’s plain language required complete “revenue neutrality.” A three-judge panel of the Delaware Supreme Court affirmed the Court of Chancery’s decision and held that HB 242 was constitutional and its plain language did not require strict “revenue neutrality.”