There will be no revaluation next year in Orange County.
The Board of County Commissioners voted 6-1 Tuesday night to delay a revaluation until 2015. Commissioner Earl McKee dissented, concerned about the perception that the county was only delaying because values had declined, and wasn't following its past commitment to the four-year revaluation system.
When is a $200,000 savings not a savings?
If you’re an Orange County commissioner, it’s when the savings could cost you more in public credibility than it’s worth.
Tax Administrator Jo Roberson told the commissioners last night they can save money by delaying the next scheduled tax revaluation. The county revalues every four years, but with sales flat and surveys showing Orange’s current tax values among the most accurate in the state, Roberson said the commissioners might want to delay two years.
The county has until next month to decide. But commissioners don’t seem interested.
Many residents are still angry over the last revaluation, which raised property values as home prices nationally were tanking, Commissioner Barry Jacobs said. Many still don't think their values are accurate.
“I’d be very concerned about delaying,” agreed Commissioner Steve Yuhasz. As much as he said he’d like to save the $200,000, “sending a message that a reval is only important when it suits the county is not the message to send.”
P.H. Craig, businessman, appraiser, has strong opinions about former Tax Assessor John Smith.
Craig thinks Orange County botched last year's revaluation and that we botched our story by not saying so. I told him we reported the story fairly: we noted the record number of appeals, the higher than normal percentage of reversals, and the fact that the county can't say how far off those initial assessments were. We also interviewed two residents who were upset with the process, including one who is now taking his appeal to the state.
What Craig was most upset was tax Administrator Jo Roberson's saying the county was, in fact, pleased with the number of people who came forward with information that changed their assessed tax values. He thinks that was pure PR and that we gave her a platform for saying as much.
I wasn't going to win with Craig, but I did follow up on one of his concerns. He thought it was outrageous that the county would hire former assessor Smith as a consultant after overseeing a revaluation that saw 5,000 appeals, about one in every 10 taxable properties in the county.
So I called County Manager Frank Clifton.
He quickly guessed I had spoken with Craig. And he stood by the contract and the revaluation. Smith will be paid $45.82 per hour, up to $46,706 to help the county tax office transition to new appraisal software and to "provide expert testimony" before the county Board of Equalization and Review and/or the state Property Tax Commission, among other tasks. (The expert testimony part also riled another reader, who has a letter coming in Sunday's paper.)
"I've been in three different counties," Clifton said. "The revaluation process is not as simple as some might think." The number of appeals may have been unusual for this county (five times normal, as we reported), Clifton said, but they're not unusual for counies in general, especially during the recession. "I was in Onslow County; we had the same numbers."
And as Roberson said in the article, Clifton said the data support the county's numbers. Average home sales have been coming within spitting distance of the county's assessed values (all right, he didn't say spitting distance). "Everybody wants a higher value," he said, "but not when you apply taxes to it."
Remember the Orange Tax Revolt?
Hundreds of people crowded meetings months ago to protest Orange County's revaluation. They said the new assessments were too high for a recession and would lead to higher property taxes.
Some 5,000 taxpayers appealed, four times what the county had seen in prior revals. Many assessments were lowered, but overall, the county said the assessments were accurate. The new values fell in line with what area homes were actually selling for.
Last week I sat down with Mark Zimmerman, a Realtor and columnist for the Chapel Hill News. Mark believes we will see a resurgence of Tax Revolt in September when the county mails out property tax bills. Why? Because, as we've reported, revenue neutral -- a term by which the county says it will generate the same amount of tax revenue as the year before revaluation -- doesn't mean revenue neutral.
As we reported even the county commissioners were stunned to learn real property tax bills will rise under the revenue neutral rate to make up for declines in other taxable property. The average property owner will see a $159 increase in his or her county tax bill. But Mark has done additional research for a column running Sunday that shows just how much tax bills are increasing throughout the county.
Since Mark is a Realtor, I asked him what motivated him. I mean, higher property values mean higher commissions, right?
"I think [revenue neutral] is a Trojan horse that allowed them to raise [tax] rates without having to say they effectively did so," he said. "People are going to get their tax bills, and I think people are going to fall off their chairs."
As much as Realtors trading in high end properties might benefit, Zimmerman said he does not want to see Chapel Hill become a Greenwich, Conn.
"There are people who are not going to be able to live here who made this a place people want to live in."
Read Mark's column Sunday in The Chapel Hill News.
Orange County Voice sent us the following information, courtesy of Orange Tax revolt, about the Howell property. The Howell property off N.C. 54 in White Cross, is one of two sites the county is considering for its future solid waste transfer station.
Based on the county's 2009 revaluation, the property's new tax value is $931,000. Yet, the groups say, when the county had a professional market appraisal done as part of the transfer station project, the property's market value was estimated at $820,000.
That puts the new tax value at $111,000 or 13.5 percent above its market vaue. The 2008 tax value was $748,201. The 2009 value of $931,000 is an increase of 24.4 percent, about the average increase in assessments countywide.
Mr. Howell's willingness to sell the property is one of the reasons the county has said it is a finalist site.The other site, also in White Cross, is owned by OWASA, which says it needs it for application of sewage sludge.
NOTE: The following letter came too late for tomorrow's Chapel Hill News. It was written in response to a story about the county budget that ran in Wednesday's News & Observer. The letter will appear in Wednesday's CH News.
The Orange County Board of Commissioners seeks to avoid a tax increase in 2009 and is committed to spending cuts and a revenue neutral tax rate (no increase in income to the county).
We accept the county attorney’s opinion that rescinding the 2009 revaluation is not legal at this date, and believe that such an adjustment would not solve our collective and individual financial difficulties.
The other night the commissioners directed the county manager to produce a budget for fiscal year 2009-10 that reflects a rate of spending no higher than supported by a revenue neutral tax rate. Assumed is a spending level reduced by a minimum of $8.7 million from 2008-09, about 5 percent.
The manager also was asked to provide recommendations for additional, significant, targeted cuts below that rate of spending. Those reductions, to be considered later this spring, could allow property taxes to be set below the revenue neutral rate. Further cuts will be balanced against our historic commitment to public safety, education, environmental protection, and support for those least able to help themselves.
The commissioners agreed to apply the same cap on increases for all taxing districts, including the district tax for the Chapel Hill-Carrboro City Schools and fire department tax rates, subject to consultation with each affected entity.
The commissioners pledged to dedicate 48.1 percent of Orange County’s spending to our public schools, a previously agreed-upon target that maintains a longstanding tradition of superior support for education.
We also directed staff to send letters that offer assistance in reviewing and reducing appraised values to the approximately 10 percent of Orange County property owners who saw the largest valuation increases, 40 percent or more. (The average increase was 24 percent.) County staff will assist with appeals through June 2009. The back page of the letter will provide eligibility information for seniors and the handicapped seeking homestead exemptions and circuit breaker assistance under state law.
The Orange County commissioners understand and share concerns raised by taxation, government spending, and shrinking services in these difficult economic times. We remain committed to responding to, and balancing, the needs of all the residents of Orange County.
Valerie Foushee
Alice Gordon
Pam Hemminger
Barry Jacobs
Mike Nelson
Bernadette Pelissier
Steve Yuhasz
Orange County Board of Commissioners
The Orange County tax office has received about 1,900 appeals on the county's 51,225 taxable properties. That's a 3.7 percent appeals rate.
In a typical year, Tax Assessor John Smith says his office adjusts 15 to 20 percent of assessments upon appeal. In a phone interview, Smith says this year that rate could be twice as high. He encourages people who think their property has been overvalued to contact the Tax Assessor's Office at 245-2100 or at the office located on the second floor of the Gateway Center, 228 S. Churton St. in Hillsborough.
"One thing that impresses me is the quality of the appeals," Smith says. "In the past we've gotten [people saying] 'It's too high' and nothing else." One of the reason for the increase in successful appeals, he says, is that properties were valued incorrectly in prior years and people have only come in now to challenge them.
We'll have more on tax revaluation Sunday in advance of Monday night's Orange Tax Revolt meeting at 7 p.m. in the Orange High Gym and the county commissioners' meeting the following night. Look for our story and columns by County Manager Laura Blackmon and Jim Postma, who asks if it's time for a Proposition 13 in North Carolina, in Sunday's Chapel Hill News.
Last time we checked more than 1,600 property owners had appealed their new valuations. On Saturday, the Orange County GOP, at its annual convention, passed this resolution calling on the county to rescind its revaluation. The county commissioners have asked staff to report to them on the revaluation at a future meeting.
Meanwhile, the second meeting of the citizens group Orange County Tax Revolt wil be held at 7 p.m. Monday, March 23, at the Orange High School Gym in Hillsborough.
RESOLUTION REGARDING ORANGE COUNTY PROPERTY VALUATIONS
Whereas the recent revaluation of properties in Orange County for taxation purposes has resulted in an average increase of 22 percent in assessed property values;
Whereas with the economic downturn in the housing market in Orange County the average home price is $50,000 less than January 2007 prices and the 22 percent increase in assessed values represents a large gap between the real value of properties and the assessed values;
Whereas the median household income in Orange County has not increased nearly as much 22 percent;
Whereas the Orange County tax rate of 99.8 cents per $100 is the second highest property tax rate in all of North Carolina and the rates in Orange County have resulted in 20 straight years of higher property taxes;
Whereas the County Commissioners' policy of discouraging commercial development has caused the percentage of residential tax revenues to total property tax revenues to increase from 64.6 percent of in 2002-2003 to 70.1 percent in the current fiscal year;
Whereas despite the Commissioners' spokesman's statements that a revenue neutral rate will be sought, past history points to the rate staying the same, which would result in a de facto tax increase for Orange County property owners;
Whereas state law does not require Orange County to revalue property until 2013, and other counties have set aside property revaluations; and
Whereas the Orange County Republican Party believes that after 20 years of tax increases, that the County Commissioners should be able to practice fiscal discipline and find ways to live with the revenue that the current property tax rate and valuations would raise;
Resolved the Orange County Republican Party calls upon the County Commissioners to set aside the recent tax revaluations and to use current valuations until state law mandates revaluations;
Resolved that if the Commissions do not nullify the revaluations, the Orange County Republican Party calls upon the Commissioners to establish a revenue neutral property tax rate and that a program would also be put in place to provide property owners whose tax bills do increase because of revaluation a rebate; and
Resolved that the Orange County Republican Party calls upon the Orange County Commissioners to streamline programs and expenditures, and to assess the value of all programs, in order to prevent annual property tax increases on property owners in the county.
This resolution passed in Convention, March 7, 2009.
Forgot to add the link to Orange County Tax Assessor's report in the post below. To read John Smith's update, click here.
