Divided commission cites possible impact on business, tax rate
There will be no property tax revaluation in 2012 for Union County. By a 3 to 2 vote, commissioners rejected the idea during their March 7 meeting, with members of the board majority arguing it wasn’t the right time.
“A reval is not gonna add one penny to the $221 million we need to pay our bills,” Board Chairman Jerry Simpson said, adding that he understood regardless of the decision, some people were going to be hurt.
Under North Carolina law, counties have to conduct a revaluation at least every eight years. As Union County’s last one was in 2008, another one isn’t required until 2016. The previous county board moved that timeline up to 2012, hoping to help lower the property tax bills for some residents, whose homes were last evaluated in 2008, at the height of the real estate market.
The reason for that increased tax bill is a decline in real estate sales. Over the last three years, Union County tax records show sales have dropped from 3,388 in 2008 to 1,515 homes sold in 2010. The high end housing market has suffered the most. Out of those homes sold in 2010, only 93 were defined as excellent or above. Over 1000 were classified as ‘average’ or ‘fair’ by the tax office. If home sales keep dropping, the real estate tax base will drop 14 percent by 2012, meaning the funds brought in by property taxes would be lower at the current rate.
“In actuality, two thirds of our homeowners (would) write a bigger check to the county (if case of a reval) and get less services,” commissioner Jonathan Thomas said. “Not the same services, (but) less services. We’ve got to cut government.”
Supporters on both sides of the issue spoke to commissioners, with several towns officially turning over resolutions. Monroe Mayor Bobby Kilgore and Hemby Bridge Mayor Kevin Pressley both read their respective statements into the record, each in support of postponing a revaluation. Additionally, Stallings resident Louis Philippi argued that by revaluating now, the commission was basically saying they were going to raise his taxes, an idea he didn’t support.
On the other side, unincorporated Union County resident Liza Kravis said it was unfair to leave homeowners paying inflated bills, based on property values that were no longer accurate.
“Yes, we have unprecedented changes in the financial landscape,” Kravis said. “(But) they’re not gonna change overnight. In the meantime, we have a lot of houses that are incorrectly valued. I believe there are many houses in the county that are unfairly pulling the burden of taxes for other parts. It’s really important everyone pay their fair share.”
Across North Carolina, 12 counties postponed their revaluations from 2011 because they have don’t have enough sales.In the past, the county used a sales ratio to determine fair market property values, calculated by dividing the property assessment by the sales price. Since the 2008 revaluation, Union County has seen a 70 percent decline in homes sales, and many sales took place in neighborhoods with foreclosures. Although assessment equations do not include foreclosure sales, there is no doubt sales figures in recent years were affected by homes sold at bargain-basement prices.
“(Should) some residents carry the burden of others?” Commissioner Tracy Kuehler asked. “That’s not a Republican principle. To tax people on property that’s wrongly valued is unfair taxation. Some people have been forced (to sell) and we’re letting that happen,” Kuehler said.
Kuehler’s comments were supported by fellow commissioner Kim Rogers, who argued that people need to only pay their fair share, not what she saw as overtaxation.
“The purpose of a reval is not to increase revenues, it’s based on the value of your home, (so) property owners pay their fair share of the taxes” Rogers said, adding that in North Carolina, 70 of the state’s 100 counties planned to do a revaluation sometime in the next three years. According to state tax records, Union County ranks among the top ten counties most out of synch with property values in the current economy, coming in with properties an average of 18 percent higher than the actual value. Under state law, a revaluation is automatically triggered once that figure hits 20 percent.
Commissioner Todd Johnson said if the county was forced to do a revaluation, that’s one thing, but to willingly start one earlier than required made no sense right now.
“I think it’s reckless and I think it’s careless,” Johnson said. “What I want to know is who on this board is gonna (vote to) raise the taxes (if revenues decline)?” A revaluation, Johnson argued, would hit people right as the county is looking for ways of plugging a budget deficit. There’s no need to make it bigger, he said.