To increase or not to increase: the tale of Charlotte property tax
Posted on 6 May 2011 by Larry Shaheen Jr.
When Shakespeare wrote the play “Hamlet” and created the famous tragic hero, he crafted one of the most memorable characters in literary history. With that in mind, it might be appropriate for the Mecklenburg County Commission to apply for a name change to our favorite hero’s namesake with all the hemming and hawing it’s doing right now about our property tax rate. It’s time to have an honest discussion though so here it is in plain English.
Folks, there is a very realistic chance that the amount you pay in property taxes could go up!
No one can deny or ignore that this is a very real possibility. For those of you who do not know (Which, if you don’t and are a property owner, I would be shocked!), this year Mecklenburg County underwent a revaluation of all county property. The last county revaluation was in 2003 and state statute mandates that the county undergo a revaluation every 8 years.
So how does that mean you may have to pay more in property taxes? So glad you asked. Let’s talk.
Rate neutral vs. revenue neutral
In Mecklenburg County your property taxes are determined by the value of your property multiplied by the property tax rate. That property tax rate is not the same for everyone and each individual’s rate has been the same since 2003.
This year that might change. For the first time in eight years there is a conversation taking place between the county commissioners, staff, and taxpayers about whether to increase the amount of revenue.
In North Carolina there are three approaches to changing the tax revenue after a revaluation:
- revenue neutral
- revenue decrease
- revenue increase
In plain English, this means that the property tax revenue, which means money brought in by the property tax, can increase, decrease, or stay the same. By law the county has to publish the revenue neutral rate so that taxpayers may know how much the county is either increasing or decreasing their taxes. (here)
Now remember this next part because it is important:
If the county adopts a revenue neutral approach and does not increase revenue, your rate will go down or up depending on the change in your property value, so you pay roughly the same amount. (here)
Have you heard anything about that yet? No? I’m not surprised.That is because no one is using the terminology we just discussed to talk about the possibility of a property tax increase. Instead, elected officials and county staff, like Mecklenburg County Chairwoman Jennifer Roberts (twitter feed here) are using a term sounding similar to revenue-neutral called rate-neutral. This is most likely unintentional, and not deliberately misleading, however it is confusing.
A rate-neutral approach to your property tax rate means that instead of proactively adjusting the rate, the county would leave the rate where it currently is and let the revenue that comes in be determined by the increase or decrease in the amount of your property. Considering that some citizens saw as much as a 60% increase in their home value that may be a significant change in their tax bill. Adopting this approach would mean about $55 to $78 million in additional tax revenue.
So in layman’s terms, by doing nothing the county commission can leave the property tax rate right where it is, and if you had an increase in your property value you will see an increase in your property taxes.
So what will they do?
Whether to increase the property tax revenue will ultimately be a decision to be made by our county commissioners and they are already feeling the pressure.
There has already been a request made by the Charlotte-Mecklenburg School system for 55 million additional dollars from the county (here) and a request made by the Library Taskforce for 2.5 million additional dollars (here). County Manager Harry Jones has made giving his staff a pay increase his number one priority (here) and in a budget presentation to citizens, staff signaled an intent to begin to re-invest in programs and departments that had been cut in previous years.
So the question remains will they or will they not increase the property tax revenue by adopting a rate neutral approach?
Much like Hamlet, we are hearing some very indecisive words on whether or not we will see an increase in property taxes from a few of our elected officials. At-Large County Commissioners Harold Cogdale (D) and Jennifer Roberts (D) both have declined to state which avenue they will support, with Cogdale stating “it would irresponsible to comment on this topic at this time” during the election and Chairwoman Roberts stating, “I haven’t made up my mind yet and won’t until I see the County Manager’s budget.” However, Chairwoman Roberts has made it very clear that to her when addressing this topic, “It is about doing what is fair.”
Conversely, we are also hearing some very decisive statements being made from their colleagues. Former Sheriff and current At-Large Commissioner Jim Pendergraph ® and District 1 Commissioner Karen Bentley ®, both have stated that they will not support an increase in tax revenue and will oppose adopting a rate-neutral approach.
“At this time of financial hardship, we cannot finance an increase in tax revenue on the backs of already struggling taxpayers,” says Pendergraph, “we have to make tough choices to insure that our citizens can still afford to feed themselves and their families.”
Bentley addressed the rising prices of commodities stating, “We would be out of touch with our citizens if we attempted to increase their property taxes now when gas and grocery prices have increased so dramatically.”
There are some very good reasons for supporting a property tax revenue increase and some very good reasons not to support it.
Stephanie, a CMS mother associated with Meck Future, who has three children, two of which atttend McAlpine is “100% in favor of keeping the rate where it is and increasing tax revenue.” She would like to see the money spent on education to make up for the cuts and jobs lost last year.
Her, and others at Meck Future, believe that increasing property tax revenue is necessary due to the recent cuts in education and services around the county.
Jack, a self-employed programmer, believes that the money he would spend on increased property taxes, “are better served in the market supporting local businesses and helping strengthen the jobs and economy of our city”
Those who believe as Jack does would rather see the county learn to live within its means and function more as a business as “as he would not give the county any more money until they prove to be good stewards of the citizen’s trust.”
So the question remains for you, the citizen. Should they or shouldn’t they increase the property tax?
Whatever you believe make sure you speak up and are heard this summer when the county addresses the tax situation and the budget. The commissioners need your input and your opinion. Stay informed. This is your money, you should know where it goes, and you should have a say in how it is spent so that nothing ever rots in the great state in Mecklenburg.