Scotland County leaders planned to drastically lower the property tax rate, which is the highest in North Carolina, following this year’s state-mandated reappraisal.
But some say a new state law leaves them with little choice but to keep the current rate of 99 cents per $100 of property value.
The General Assembly this month passed Senate Bill 889, which puts a 12-month pause on property tax rate increases in nine of the 12 counties across the state, including Scotland and Bladen, that were scheduled to undergo reappraisals this year. Gov. Josh Stein signed the legislation into law on June 19.
Republican lawmakers who championed the legislation said it would offer relief to homeowners affected by skyrocketing property values. But some county leaders said legislators shouldn’t meddle with their ability to set property-tax rates based on reappraisals—especially during the height of budget season. Under state law, every county must pass a balanced budget before July 1.
Scotland County Commissioner Tim Ivey said he expressed his frustrations to legislators in Raleigh.
“I made it very clear how unfair it was to Scotland County, the people of Scotland County especially, to be playing these games,” he said during a commission meeting on June 11.
Crews are done reappraising the 23,000 properties throughout Scotland, according to County Manager April Snead. The new values were up by an average of 60%, she said.
As a result, commissioners planned to lower the property tax rate nearly 30 cents, to 69.9 cents per $100 of value. They expected to pass a $57 million budget for the fiscal year that begins July 1, up $1 million from the current year, Snead said.
Some commissioners said they hoped lawmakers would exempt Scotland County from the one-year moratorium through Senate Bill 474. The state House passed the legislation almost unanimously—Garland Pierce, a Democrat who represents Scotland County—cast the lone “no” vote. It ultimately failed in the Senate.
“The prices of people’s houses went up terribly, and a lot of—particularly our citizens and older folks—they just could not deal with that,” Pierce told The News & Observer.
With a tax rate of 99 cents per $100 of value, a homeowner with a $200,000 property would pay $1,980 a year. If the property value increased to $320,000 and the property tax rate was 69.9 cents per $100 of value, the homeowner would pay $2,236.80.
Snead, who proposed a $57 million budget for the fiscal year that begins July 1, said uncertainty from the state complicated the process of crafting a spending plan. The county is dealing with rising costs for everything from employees’ health care benefits to gasoline, she said.
“It’s like taking a stab in the dark on what to do with your budget,” Snead said.
Like Snead, Bladen County Manager Sam Croom said he prepared two budgets for commissioners—one with the existing property values and one with the newly reappraised values.
Commissioners planned to lower Bladen’s property tax rate from 78.5 cents per $100 of value to 67.5 cents, but that won’t happen now, Croom said.
He said the county will have to use more than $7 million from its fund balance to pay its bills, instead of the $4.7 million it planned to use from the fund based on new property values.
“I can understand the legislators and governor are concerned about property values, especially our elderly and poorer individuals,” Croom said. But, he said, it has created uncertainty.
Commissioners in both Scotland and Bladen counties have agreed to ask voters in November to increase the local sales tax rate by a quarter-cent.
Snead said the tax will allow Scotland County to generate revenue from visitors who stop at local restaurants and stores. Groceries, fuel, and medicine would not be affected.
The additional revenue would allow Bladen County to build a multipurpose facility that could host concerts, art and livestock expos, family reunions, and high school graduations, Croom said.
“It would be something the entire community could use,” he said.