(Source: By Karen Cimino Wilson | Concord Independent Tribune, Independent Tribune, Concord, N.C.) – Official property tax values for all homes and other real estate in Cabarrus County will likely decrease in early 2012 as the county completes the final portion of its 2012 Revaluation and begins alerting property owners to the changes.
Officials expect an overall decrease in property tax values to reflect true market values. The result could be a lower tax bill for some citizens and landowners unless Cabarrus County, Kannapolis and Concord elected officials opt to increase local tax rates to a revenue neutral amount, meaning an amount that does not increase the amount citizens pay, but doesn’t decrease it either.
Kannapolis City Manager Mike Legg and Concord City Manager Brian Hiatt said they both expect to take a hard look at their city budgets as the revaluation information is released in 2012 and they head into their budget season for fiscal year 2013.
Fiscal year 2012, the current fiscal year, ends on June 30, 2012, and 2012 tax bills are mailed out in August and September. They are due in early January, meaning the impact of the revaluation will not be felt by the cities until fiscal year 2013, Legg and Hiatt said. But they will begin planning for it in the next several months.
The county tax assessor’s office, which has been working on the revaluation for the past year, originally lowered the base rate for single family homes in Cabarrus County from $71 per square foot to $70 per square foot. Then, after receiving feedback from citizens and further reviewing market changes, county officials lowered the base rate again to $68 per square foot. That number reflects the estimated cost to rebuild that home now, said J. Brent Weisner, Tax Administrator for the county.
Other factors are also considered in determining the property value. Cabarrus County commissioners approved a schedule of values that includes everything from location and type of dirt to whether a house has a fireplace or tile flooring to help further narrow down the value of a home to most accurately reflect the market value, according to county officials.
County appraisers evaluated more than 600 neighborhoods in Cabarrus County, looking at each individually and evaluating properties based on the characteristics and sales history of each neighborhood.
Hiatt said Concord officials must wait to hear final numbers from the county to determine what it will mean for the city’s budget.
“You are required every time there is a revaluation to recalculate a revenue neutral number,” Hiatt said. “In past years, when there was a lot of growth in the tax base and once we calculated what revenue neutral was, the council always lowered the tax rate. This year will be unprecedented.”
Cabarrus County does revaluations every four years. State law requires counties to do a revaluation every eight years. Mecklenburg County does one every eight years so the overall impact for many homeowners there was an increase in their values despite the depressed housing market.
Cabarrus County realized the appreciation that occurred between 2004 and 2008 in the last revaluation in 2008. That’s why the 2012 revaluation is expected to decrease property values, officials said.
In the last three revaluations Hiatt has experienced as Concord’s city manager, none has included a decrease in values and all three included a reduction in the city’s tax rate, which is now 42 cents per $100 valuation, or the equivalent of an $840 tax bill on a $200,000 house. Hiatt said the decrease in property values is so unprecedented that he cannot recall a time in his lifetime when property values decreased instead of increased.
No decisions have been made yet about whether Concord would raise its tax rate to maintain the same level of revenue it collects now. But the pressures on the city’s finances have been great in recent years because of the economy and loss of industry, Hiatt said.
“We’ve already lost approaching $3 million in property taxes from the loss of Philip Morris,” Hiatt said. “We’ve lost over $2 million per year in sales tax. Because of that, we’ve had to eliminate and freeze positions and find new ways of doing things.”
There’s also the added pressure of increasing numbers of foreclosures, which usually result in reduced property tax collection rates or delayed collections.
“It’s been more challenging with the number of foreclosures to collect taxes,” Hiatt said. “All the local governments have done a good job of trying to keep up with the foreclosures and trying to get that money once the legal action is over.”
Legg, Kannapolis’ City Manager, said he thought Kannapolis was doing pretty well considering the current economy and the challenges it presents for the city, but that the revaluation presents new challenges. Kannapolis’ current tax rate is 49 cents per $100 valuation, or about $980 bill on a $200,000 house.
“They’ve kind of thrown some numbers out to us. But it would be unfair to throw those out there right now,” Legg said. “The assessor’s office said they have seen a pattern, but they haven’t even gotten to Kannapolis yet.”
Kannapolis City Council members said they are concerned about the impact that Cabarrus County’s upcoming property tax revaluation will have on revenues for the city. Kannapolis straddles the Rowan and Cabarrus county line. Rowan County’s 2011 revaluation lowered property tax value in the city by about $40 million, but the city experienced a nearly equal increase in property tax value on the Cabarrus County side of the city. The Cabarrus County revaluation, however, is expected to have more of an impact, Legg said, because there hasn’t been much growth on the Rowan County side of the city.
“What we have to do is be prepared,” Kannapolis Finance Director Eric Davis said. “I really hope they’re wrong in what they’re telling us that the values are. But it is what it is and we’ll adjust and bring you what they’re telling us,” he said.
All Cabarrus County citizens also pay the county’s tax rate of 63 cents per $100 valuation, or about $1,260 on a $200,000 home. Cabarrus County commissioners have discussed raising the tax rate to a revenue neutral rate in the past, but no decisions have been made.
To learn more about the 2012 Cabarrus County Revaluation, visit http://www.cabarruscounty.us/government/departments/tax/revaluation/Pages/default.aspx.
Contact reporter Karen Cimino Wilson: 704-789-9141.
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Source: By Karen Cimino Wilson | Concord Independent Tribune, Independent Tribune, Concord, N.C.