The head of Alamance County’s tax office has suggested that it would be to the county’s advantage to get a two-year head start on its next property tax revaluation, which had originally been scheduled to take effect in the opening months of 2025.
Alamance County’s tax administrator Jeremy Akins proposed this one-time change to the revaluation’s eight-year schedule last week when he approached the county’s board of commissioners last Monday to share some recent developments in the county’s forthcoming mass reappraisal of tax values.
During his report to the commissioners, Akins acknowledged that the state has ordered the county to implement the revaluation a year early in 2024 due to a growing disconnect between county’s tax values and the sale prices of real estate. The tax administrator then urged the commissioners to do the state one better and wrap up the next reval by 2023 – which he insisted will be in the financial interests of the county as well as its taxpayers.
Atkins attributed the impetus for this early revaluation to a booming local real estate market, which has sent sales prices soaring above the tax values which his office established after the last revaluation in 2017. The county’s tax administrator added that, according to his department’s own analysis, the median price of a home has jumped 31 percent over the past four years while commercial property is selling for about 25 percent a square foot more than it was in 2017.
“I’m excited about this growth, “he added during his presentation to the commissioners. “But this has caused me some heartburn, too.”
Akins went on to inform the commissioners that the disconnect between tax values and sales also snagged the attention of the N.C. Department of Revenue when it recently conducted a yearly assessment of the real estate market in Alamance County. The state agency reportedly found that, in 2020, the county’s assessed tax values were, on average, just 81.06 percent of the rates that local real estate was able to fetch on the open market.
Akins added that this discrepancy has triggered a one year advance in the county’s revaluation cycle – which automatically occurs under state law whenever the ratio of tax values to sales falls below 85 percent.
The head of the county’s tax office nevertheless acknowledged that the drop in the county’s sales ratio has also given the state’s revenue department a green light to discount the tax burden on public service companies. He added that this automatic reduction is expected to cost the county some $373,653 this year alone – and will deprive the county of even more revenue with each passing year until it completes another tax revaluation.
Akins said that this inevitable reduction in tax revenue has convinced him to suggest something that he admitted may sound counterintuitive.
“I don’t think that we need to wait for 2024 to do a revaluation;” he added. “I think we need to do it in 2023.”
Akins pointed out that the $270,000 which his office will spend on the revaluation pales in comparison to the nearly $1.2 million in tax revenue that it stands to lose from public service companies if it waits until 2024 to implement the revaluation’s results. He added that, by moving up the schedule to 2023, the county would save the county an estimated $414,053 by forestalling the anticipated loss for that year.
Akins argued that a six year period between revaluations would also ensure a more equitable tax burden for property owners whose tax values are currently most out of whack. He added that the county could always postpone the reval’s implementation in the event that the real estate market takes an abrupt nosedive as it did in 2008.
“If the worst thing happens and it bottoms out,” he said, “we have the option of moving it out two years.”
Akins stressed that his proposal for a revaluation in 2023 would be a one-time deviation from the county’s usual eight-year revaluation cycle.
“That being said,” he added. “I think it’s worth considering a four year cycle.”
Akins’ recommendation for a four-year cycle drew an endorsement from commissioner Steve Carter, who had worked as a banker prior to his election to the county’s governing board. Even so, the commissioners ultimately no action on the tax administrator’s suggestion, which Akins had characterized as a purely “informational item” that required no immediate response during last Monday’s meeting.