Tax rates climb in 32 counties

• County-by-county tax rates: HTML (below) | Excel spreadsheet

By Todd McGee
Director of Communications

Many property tax payers hoping for a trickle-down effect from the state’s $2.4 billion budget surplus will be disappointed this fall when they receive their county property tax bills.

The state was able to provide up to $27.4 million to cap county Medicaid costs at 2005-06 levels, and counties will begin to receive school construction money from the state lottery. But despite the new revenues and the fact that it’s an election year, 32 counties were forced to raise taxes for 2006-07 due to increasing school construction costs and the Medicaid share.

“This is the second year in a row that we are seeing a large number of counties – both urban and rural, east and west – raise property taxes to keep pace with the demands being placed upon them,” said NCACC Executive Director David F. Thompson. “The county Medicaid share and school construction continue to be the major budget drivers for counties.”

Thompson pointed out that for 2005-06, 45 counties representing more than 50 percent of the state’s population increased property taxes, including 19 counties with increases of 10 percent or greater.

Many counties are budgeting to pay off school bonds that were recently approved by voters. Carteret County added 2 cents to its property tax rate to begin paying off the first $22 million of a $50 million bond for school improvements and additions that was overwhelmingly approved by voters last year. Lenoir County increased its property tax rate by 5 cents to begin paying down a $69.7 million school bond referendum approved by voters in May.

Some counties were forced to use an appropriation from their fund balance to avoid a tax increase. Vance County appropriated $1.2 million from its general fund balance to hold the property tax rate steady at 92 cents per $100. Without the appropriation, the county could have been forced to raise property taxes by 6 cents, said County Manager Jerry Ayscue. Edgecombe County used $4.7 million of fund balance in its $55.5 million budget, according to Manager Lorenzo Carmon. However, both Ayscue and Carmon said that the fund balance appropriation might not be needed due to budget management practices employed by the counties.

Capital projects were also on the minds of Rockingham County commissioners, but schools aren’t the driving force. The board passed a 5-cent property tax increase to fund new county facilities, including a new courthouse and jail and some emergency communications facilities.

The Graham County Board of Commissioners were able to realize a politician’s dream when they reduced the county property tax rate by 11.5 cents. The county won a longstanding legal battle with Alcoa last year that saw the company’s property tax valuation jump from $44 million to $150.3 million. The company owed more than $2 million in back taxes and interest to the county.

Several counties were able to pass more modest tax cuts. Pamlico County had a budget surplus of nearly $1 million for 2005-06, which enabled commissioners to reduce their property tax rate by 2 cents for 2006-07. Pasquotank County was able to reduce its property tax rate by 1.1 cents from its revenue neutral rate after a revaluation revealed property values had increased by more than 100 percent countywide. Pasquotank is also one of a handful of counties with authority to charge a land transfer tax. That tax will generate more than $2.7 million for the county in this fiscal year, according to County Manager Randy Keaton. Cabarrus ($0.0011), Gaston ($0.013), Mecklenburg ($0.0179) and Rutherford (1 cent) counties were also able to reduce taxes for 2006-07.

A handful of counties saw drastic increases in property values after revaluation. Properties in Pasquotank County went up more than 100 percent. The county determined that its revenue neutral rate would be 49.1 cents, a significant drop from the 2005-06 rate of 84 cents.

Notes:
¹ = Revaluation and increase
² = Revaluation and decrease
³ = Revaluation, revenue neutral rate
^ = Cleveland County merged its countywide school tax rate with its general property tax rate with both rates remaining the same from 2005-06.
* = These counties revalue more frequently than every 8 years.

Summary of actions
Increases = 25
Revaluation and increase = 7
Decreases = 6
Revaluation and decrease = 1
No change = 58
Revaluation, revenue neutral rate = 2
Interim budget = 1

Average rate: $0.6520
High rate: $1.1000 (Scotland)
Low rate: $0.2600 (Dare)
Average increase: $0.0239
Highest increase: $0.1000 (Allegany)
Largest decrease: $0.1150 (Graham)