The head of Alamance County’s tax office has announced that the county’s tax base shot up by nearly 80 percent when he and his colleagues implemented the results of the county’s latest revaluation – which readjusted the values set during the previous mass reappraisal in 2017.
During a meeting of Alamance County’s commissioners on Tuesday, the county’s tax administrator Jeremy Akins conceded that the cumulative worth of the tax base has jumped from $11.975 billion to $21.488 billion in the wake of this mass reappraisal, which the tax office completed earlier this month after two years of preparatory legwork.
Akins admitted that this 79.4 percent spike in the tax base is even higher than his previous projection of 75 percent, which he shared with The Alamance News about a week before his appearance before the commissioners. He went on to warn that many area residents will feel the weight of this cumulative hike when they receive their individual property tax assessments later this month.
Even so, Akins assured the commissioners that this initial “sticker shock” should pass when property owners receive their actual bills over the summer – assuming that the commissioners adjust the county’s current property tax rate of 65 cents for every $100 in property value in order to massage out the bump that the tax base receives from the reval.
“People want their values to go up, but not their bills,” he went on to assure the commissioners, “and that’s where the tax rate comes in.”
Tearing the roof off the housing market
Akins nevertheless confessed that a four-fifths increase was way beyond anything he had imagined two years ago when he convinced the commissioners to move up the county’s next revaluation from its traditional eight-year cycle to a six-year interval – which is itself a mere staging post en route to a new interval of four years.
Spurred by a galloping real estate market, which had already compelled the state to hasten the county’s next reval by a year, Akins persuaded the commissioners to move up the timeline another year. He noted that, among other advantages, this move would allow the county to recover property tax revenue from private utilities that the authorities in Raleigh had docked due to the growing discrepancy between Alamance County’s real estate market and the assessed values set during the county’s last revaluation in 2017.
On Monday, Akins admitted that he had made this recommendation to the commissioners with no expectation that the buoyant state of the market two years ago would persist well into 2022.
“This is being driven by a very unusual market,” he added. “I’ve never seen anything like it…There’s no way to get around the situation that we have tremendous growth.”
An appealing procedure
Akins went on to note that he and his staff have tried to account for the runaway growth in property prices through the upward adjustment in sales data – even in cases when the figures are only a year or two old. He insisted that these calculated adjustments will mean that the tax office’s individual property assessments ought to be firmly in line with the current state of the market. He added, however, that some residents will be tempted to challenge these figures because they deviate from sale prices that are barely a year or two old.
“We expect an initial wave of 7,500 appeals, and many of these will be resolved in our first round of responses in February and March. I am hopeful that we will not receive this many appeals, but we are structured to receive this many appeals. If they come in at this level, we’re ready catch them.” – County Tax Administrator Jeremy Akins
Akins reminded the commissioners that the tax office has an appeals process in place to address the inevitable objections from individual property owners. He added that, as a general rule, a county can expect to see property owners challenge about 10 percent of the assessments which come out of a given revaluation.
“We expect an initial wave of 7,500 appeals, and many of these will be resolved in our first round of responses in February and March,” he predicted. “I am hopeful that we will not receive this many appeals, but we are structured to receive this many appeals. If they come in at this level, we’re ready catch them.”
Akins stressed that, in order to discourage knee-jerk responses from property owners, his office won’t hear any appeals from individuals who walk-in off the street. But it will consider cases that are filed online or through hardcopy forms it plans to distribute. Those who are displeased with the results of these administrative appeals can then take their concerns to the county’s board of equalization and review and, from there, North Carolina’s Property Tax Commission, which he said is unlikely to hear any of their appeals before December. Those who remain unsatisfied can then proceed to the courts – and theoretically take their complaint all the way to the state supreme court of North Carolina.
“I’m not asking for the board to trust us, but that you trust our process. When citizens contact you…please encourage them to appeal and work through the process with us.” – Alamance County Tax Administrator Jeremy Akins
In any event, Akins encouraged the commissioners to recall these procedures when they begin to hear protests from residents who are incredulous of their new tax assessments.
“I’m not asking for the board to trust us, but that you trust our process,” he added. “When citizens contact you…please encourage them to appeal and work through the process with us.”
Akins told the commissioners that he ultimately expects about 97 percent of the appeals to be settled before they approve the county’s next annual budget. He went on to note that before the commissioners sign off on that budget, he and his colleagues will have calculated the “revenue neutral,” or break-even, tax rate that’s needed to counter the revaluation’s increase in values. Akins added that, by implementing this revenue neutral rate, the commissioners can assure that the average property taxpayer would be on the hook for more or less the same amount as they would if the revaluation never took place.
COMMISSIONER COMMENTS ON THE NEED TO ADOPT REVENUE NEUTRAL TAX RATE AFTER REVALUATION – AND THE POTENTIAL FALLOUT IF THEY DIDN’T:
“Can you imagine if you didn’t do revenue neutral, how many people would be in this building?” – County commissioner Bill Lashley
“We’d have to be in the witness protection program.” – County commissioner Pam Thompson
“I don’t think that there’s anybody on this board who signed up to do that.” – County commissioner Steve Carter .
“If you guys do something like that, I don’t even want to know you.” – County commissioner chairman John Paisley, Jr.
Akins conceded that residents may be less inclined to appeal their new tax assessments if they knew the new tax rate upfront. He nevertheless resisted repeated requests from the commissioners to guesstimate the rate needed for revenue neutrality. He pointed out that this figure must account for factors like the tax values of vehicles and equipment, adjustments made due to successful appeals, and the natural growth in the tax base. (Akins informed The Alamance News that a portion of the 79.4 percent increase actually derives from “natural growth” fueled by construction and renovations that occurred in 2022).
What is “revenue neutral”? Commissioner estimates range from 37 to 50 cents per $100 valuation, down from current rate of 65 cents
“There’s a lot of moving parts,” he insisted. “At this point, I have no idea what that would be.”
Akins was particularly uneasy about the potential impact that appeals will have on the overall worth of the tax base. But his misgivings weren’t shared by commissioner Bill Lashley, who predicted a revenue neutral rate of 50 cents based on his own calculations. Meanwhile, Steve Carter, the vice chairman of Alamance County’s commissioners, forecast a rate of 37 or 38 cents based on some simple, back-of-the-envelope math.
The next move
In the near term, Akins said he’d encourage any interested resident to attend a public workshop that the tax office will hold on the revaluation before it begins to mail out individual assessments to property owners on January 23. This gathering is scheduled to convene at 7:00 p.m. on Friday in the second-floor meeting chambers of Alamance County’s headquarters at 114 West Elm Street in Graham.
In the meantime, the commissioners turned their attention to what is arguably their most crucial post-revaluation decision – namely whether or not they’ll adopt the as-yet-undetermined revenue neutral tax rate. The five member board ultimately reached a consensus in favor of this break-even figure, regardless of where it eventually settles.
“Can you imagine if you didn’t do revenue neutral, how many people would be in this building?” commissioner Lashley inquired rhetorically.
“We’d have to be in the witness protection program,” agreed commissioner Pam Thompson.
“I don’t think that there’s anybody on this board who signed up to do that,” added Carter.
“If you guys do something like that,” interjected the board’s chairman John Paisley, Jr., “I don’t even want to know you.”