SUSSEX COUNTY, Del. - Sussex County leaders are proposing a new fee on building permits aimed at helping local school districts manage the impacts of continued residential growth.
Under the proposal, the county would charge $5 for every $1,000 of construction value on most building permits. Of that amount, $4.70 would go to local public school districts, while $0.30 would support Sussex Technical School District.
Based on 2025 permit activity, Sussex County estimates the fee could generate about $7 million annually for schools. Cape Henlopen and Indian River school districts are each projected to receive roughly $2.8 million per year.
Indian River School District Superintendent Jay Owens said the district’s growth has left many buildings at or above capacity.
“Our school system here at Indian River has grown, over the years, substantially,” Owens said. “Most of our buildings are at or over capacity. So with that, we have to look at things like new buildings, renovations to our existing buildings, additions.”
District leaders say the money could help offset major capital costs tied to growth, including construction and expansion projects. The funds are only to be allocated to capital and infrastructure expenses, meaning they cannot be used for day-to-day operational costs.
Builders across Sussex County told CoastTV they agree schools need additional support, but many said the added fee would likely be passed on to homebuyers, increasing housing costs. One builder said the proposal could “significantly stunt building” and hurt the local economy.
Cape Henlopen School District voiced strong support for the proposal in a statement to CoastTV.
“Sussex County is currently the only county in Delaware without an impact fee tied to new residential growth,” the district said. “Sussex County is long overdue in addressing this issue and we commend them on working with districts to put this impact fee in place.”
The district added that rapid residential growth continues to strain facilities, transportation systems and public infrastructure throughout Sussex County, arguing current taxpayers should not bear the full financial burden created by future development.
“Every dollar generated from growth related impact fees is a dollar that does not have to come directly from current residents,” the statement said. “This is about responsible planning, long term sustainability, and ensuring growth helps contribute toward the impact it creates.”
The proposed fee comes as Sussex County officials work to finalize the county’s fiscal year 2027 budget before the June 30 deadline. County Council is scheduled to hold a public hearing on the proposal June 16.
