Commission agrees to lower property tax during budget sessions
The tax rate for Union County will drop next year, the only question is how much. During their Monday, Dec. 5 meeting, county commissioners unanimously voted to reduce the property tax rate this year.
“We find ourselves in Union County in a unique situation, with the infusion of cash from the pending hospital deal,” Commissioner Jonathan Thomas said. “I think it would be extremely premature for this board to be looking at how we could divvy up the money and spend the money when we all profess to be Republicans and conservatives.”
Under the terms of the approved lease between the county and Carolinas Healthcare System for CMC-Union, the county will get $54 million in January. Thomas proposed and the board later voted to use that money to lower the tax rate. Once the budget is set for next year, commissioners will plug in the $54 million, reducing the amount needed from property taxes
“This was the people’s hospital, let’s give a portion of the money back to them,” Thomas said.
The decision came after several weeks of campaigning from Waxhaw resident Frank Aikmus and his group, Citizens for Union County Tax Relief. Aikmus started a Facebook campaign, also going on television, calling on the county to use the extra money to lower taxes.
“I ask you to do the right thing and give our citizens tax relief,” Aikmus said, speaking at Monday’s meeting.
Right now, residential property taxes account for 84.9 percent of the county’s current tax base, with 15.1 percent coming from commercial. Out of counties of similar size and population across the state, that ranks as the third highest amount of residential, next to Harnett’s 87.2 percent and Chatham’s 85.3 percent. The current tax rate stands at 66.5 cents per $100 of assessed value, where it has remained since 2008. For comparison, nearby Mecklenburg has a tax rate of 81 cents per $100. According to the North Carolina tax office, Union County’s tax rate is 6 cents higher than the average for all 100 counties.
Pay off debt?
But some commissioners and audience members questioned using the money to lower property taxes, at a time when the county still has more than $400 million in outstanding debt.
Union County resident Richard Helms also spoke, asking commissioners to use the money to pay down some of that debt.
“We need to review our debt,” Helms said. “Look at it a little further. We don’t need to put ourselves in a box.”
Thomas said he had asked county staff to review if that was an option, due to early payment penalties. The next round of bond debt, $49 million, comes due in 2016. To pay that off early, county staff estimated it would cost $60 million.
“It makes absolutely no sense to be able to waste money in such a manner,” Thomas said. “We’re in tough economic times.”
Other commissioners argued any tax cut should go hand in hand with a revaluation, which the county postponed earlier this year.
“There are some people who are still paying a tax increase that was done in 2008,” Commissioner Tracy Kuehler said.
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 lower property tax bills for some residents, whose homes were last evaluated in 2008, at the height of the real estate market.
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 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. In giving his presentation to the county commission earlier this year, tax administrator John Petoskey explained that homeowners would probably see a double digit decline in property values, leading to a budget deficit.
Across North Carolina, 12 counties postponed their revaluations from 2011, due to an insufficient number of sales. According to state tax records, Union County ranks among the top 10 counties most out of synch with property values in the current economy.
“When we do the revaluation, two thirds of our people are going to pay more out of pocket,” Thomas said.
Kuehler and fellow commissioner Kim Rogers argued that without a revaluation, the county’s not really cutting the amount of money coming from residents.
“I’m all for looking at a reduction in taxes, (but) I want to make sure when we look at tax relief, we’re looking at it across the board,” Commissioner Kim Rogers said. “I don’t want to see a reduction in property taxes only to see an increase in another area. Let’s look at reducing the amount coming out of citizens’ pockets.”
Just because the commission agreed to cut taxes now doesn’t mean they can’t look at cutting fees in other areas during the budget cycle, Thomas said. He challenged Rogers to help lead the effort to do
Discussions on the county budget begin in January.