Commissioners fear process would adversely affect middle class
It appears that the Macon County Board of Commissioners will push back property revaluations to 2015, going back to the county’s traditional eight-year cycle, which they hope will save middle-class Maconians money. Otherwise, according to County Tax Director Richard Lightner, property taxes would probably increase for many Macon County residents with a 2013 revaluation.
Additionally, commissioners want to maintain a revenue neutral budget which requires approximately $26 million in ad-valorem taxes just to keep the delivery of county services intact. In the case of a 2013 revaluation, a revenue neutral budget implies adjusting the tax rate to make up for decreasing property revenues. The county’s property tax rate is currently $.279 per $100, lower than any other county in the state.
The special meeting was held last Thursday, Sept. 22, because a decision on the matter must be made soon, as Lightner and his staff would need to start the process in October in order to sufficiently prepare for a 2013 revaluation.
The majority of the board members seemed to be wary about who would suffer the most in a revaluation, believing that middle class residents would take on most of the burden since their home prices have not been as adversely affected compared to higher priced homes.
While the Board of Commissioners did not endorse an official decision, their dialogue seemed to indicate that they would opt for a 2015 revaluation. The State of North Carolina mandates local governments to do revaluations every eight years, so if the county pushes the process back to 2015, they will not be able to prolong the process any further. There is certainly no guarantee home prices will stabilize by then, but commissioners hinted that they were willing to take the risk.
Brian McClellan, chairman of the Board of Commissioners, gave a brief history of Macon County’s revaluation process to open up the special called meeting and quickly explained why the board was apprehensive about conducting the process in 2013.
“Traditionally, we have been on an eight-year cycle. We went to a four-year cycle in 2003 and followed that up in 2007. We did that because property values were rising so quickly, home owners and land owners were getting sticker shocked with an eight-year window,” explained McClellan. “We were set to do another one in 2011, but by that time, the housing crisis had hit and we were seeing a lot of odd prices for housing.
“We made a decision as a board to put it off for at least two years to 2013, and the reason for that is because we had very few comps, which are comparisons of similar prices close by in a localized area, where we felt we could get realistic and appropriate values. Of course, since that time the housing market has gotten worse and there have been fewer sales. So it looks like we still don’t have a lot of comps, even less than we had before, and it may put the county in a situation of having to defend revaluation values, and we may not have enough information to defend our revaluations,” said Mc- Clellan.
The appeals process could be an issue for the county with a 2013 revaluation. The process works like this: After a citizen receives a new value notice they have 30 days to apply for an informal review if they disagree with their assessment. Macon County’s tax administration office then looks at the available data to determine if the assessment was justified. When that review is completed, another county notice is sent to the citizen who can then appeal to the board of equalization and review.
The latter hearing is much more formal, but the burden of proof is solely on the tax payer. After this process is completed a citizen has a right to appeal to the Property Tax Commission in Raleigh. In the past 26 years Macon County has won all appeals cases in Raleigh.
After McClellan’s prelude, Lightner approached the podium to present information about the pros and cons of going forward with a revaluation in 2013, and the pros and cons of pushing the process back to 2015.
Lightner’s PowerPoint presentation revealed some gloomy facts about Macon’s property market. Macon County sales for 2011 were still very slow; 54 percent of sales are actually foreclosures or sales by Macon County agents in surrounding counties. Lightner also noted that 2011 commercial sales in the county are nearly nonexistent.
After Lightner presented some of his findings on Macon County’s property market, commissioners talked about what they should do, moving forward.
“The way that I read it, even a slight improvement in some of the home prices would make a big difference,” commented Commissioner Beale. “If a million dollar house goes back from $500 to $700, it’s huge. Most Maconians live in a $299,000 or less house, but yet, they are the ones that have the potential to be hurt the worst with a reval,” said Beale. Lightner responded saying, “They will be hit at every angle. All their personal and real properties, everything will be hit.”
Commissioner Kevin Corbin also questioned Lightner. “So you are saying the more valuable properties will have a larger decrease in value, percentage wise, than the smaller properties. So the person who owns the $150,000 home on one acre, if we kept a revenue neutral budget, that person would actually see their taxes go up and the larger homes would see their taxes go down,” asked Corbin. Lightner responded, “in many cases, yes, that would be true.”
Even more worrisome to Lightner and some of the commissioners is the fact that a 2013 revaluation could “open up a whole new can of worms.” Lightner feels like the county simply does not have enough sales to defend new values, which could lead to lengthy and expensive appeals. “In the past, we had enough information to defend our revaluations. We never had many people question the process, let alone challenge us because we had the data, but now we simply don’t have those sales anymore,” he said.
“Everything that is selling now is selling for a fraction of what it was once worth, and the people who are pushing for this revaluation are the middle class,” said Commissioner Ronnie Haven. “We are looking at about $26 million we have to have to operate our county budget, from property revenues,” he said.
“The point is, in the mind of the people, if this property revaluation comes down they are expecting not to be able for us to take in $26 million, they are expecting us to lower our budget. When we try to explain to them that there is a problem, it is difficult. What are we supposed to do, are we supposed to cut the police department, the health department? That’s why I really want the people to be involved in seeing what we are up against, so they will know that we need $26 million in property taxes just to run this county,” said Haven.
Haven’s frustrations were shared by most of the commissioners.
Lightner also issued a stern warning for board members at the end of the meeting. “This board needs to understand and I don’t feel like it would be professional of me not warn you, that when these chips fall, there are no guidelines on how they will fall,” said Lightner.
Commissioner Bob Kuppers voiced his concerns about going forward with a 2013 revaluation as well. “I think we can predict with some degree of certainty about where the chips are going to fall. I think unfortunately, that the folks meeting us on the street are going to be hit with the chips. All we are determining by going ahead or not going ahead is who is going to pay the taxes. The amount of taxes we collect will be the same,” said Kuppers.
Commissioners agreed at the end of the meeting to make a decision about the revaluation process in the near future.