QUESTION: Was Barry Joyce, a one-time contender for Alamance County’s board of commissioners, correct when he recently informed the board’s current members that the county’s latest property tax revaluation benefited farms and businesses at the expense of homeowners?
ANSWER: Nine years ago, Barry Joyce launched a bid for the county’s board of commissioners that ended with a disappointing fourth-place finish in that year’s Republican primary.
Three weeks ago, Joyce made a much less dramatic return to the limelight as a public speaker during the latest meeting of Alamance County’s commissioners.
In his remarks at the podium, the one-time GOP hopeful might’ve made some old school Republicans bristle when he accused farmers and business owners of making out like bandits during the county’s recent property tax revaluation. And while impugning these two stalwart Republican constituencies, Joyce also took aim at the county’s tax office for allegedly rigging the process to allow this supposed miscarriage of justice.
“This revaluation you did is a piece of crap,” he told the current members of the county’s governing board. “I’ve talked to businesspeople all over this town, and they’re [property tax assessments] didn’t go up. That’s why you don’t have a lot of businesspeople appealing [their values]. And you don’t have farmers appealing, do you?…You’re taxing the homeowners to make up the discounts for the farmers and the businesses.”
In order to ram this point home, Joyce drew the board’s attention to Lowe’s Home Improvement, whose retail location in Burlington is currently assessed at about $6.8 million for tax purposes. Joyce compared this figure to the store’s previous tax value of $6.3 million.
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At the time that he made these remarks, the commissioners had been angling to set a new property tax rate for the county that would have effectively wipe out the county’s windfall from the revaluation. Based on the assumption that they’d implement this “revenue neutral” rate, Joyce shared a somewhat counterintuitive conclusion about Lowe’s tax liability in the new fiscal year.
“You know what they’re going to pay in the new year with your [proposed] ‘revenue neutral’ [tax] rate?” he asked the commissioners rhetorically. “They’re going to get a discount of $11,000. They’re property taxes are going down!”
Joyce’s prognostication proved a bit off the mark when the commissioners adopted a new county budget later that night. As the heart of this spending plan was a property tax rate of 43.2 cents – roughly three fifths of a penny more than the revenue neutral levy of 42.59 cents per $100 valuation.
Yet, the former candidate’s point seemed to stand in spite of the board’s deviation from revenue neutrality.
Even under the new tax rate, Lowe’s will still see a decline in its tax bill, according to the Alamance County’s tax office. In fact, the tax office’s figures show that the home improvement retailer can expect to save $29,143, or about 24 percent, on its tax bill in the new fiscal year. A similar boon also awaits other commercial property owners in Burlington, such as Belk, Dillard’s, J.C. Penney, which can look forward to reductions of 21 to 22 percent in their tax bills. Meanwhile, the Tanger Outlets in Mebane is on track for a 25-percent drop in its tax bill, which equates to nearly $120,732 in raw dollars and cents.
Based on these numbers, it may be tempting to think that Joyce was on to something in his criticism of the revaluation.
But a much more nuanced picture emerges when one digs deeper into these apparent jackpots for the county’s commercial property owners.
Joyce’s jabs at Lowe’s Home Improvement seemed especially misguided to Alamance County’s tax administrator Jeremy Akins, who insists that the former candidate has completely ignored the care and attention that the county’s tax office puts into commercial appraisals.
Akins told The Alamance News that, in the case of Lowe’s Home Improvement, the tax office scoured real estate records from across the state to find sales data applicable to the Lowe’s store in Burlington. In the end, it dredged up two other Lowe’s locations that were recently offloaded by the Mooresville-based chain. Acccording to Akins, the company sold one store in Waxhaw for $9,761,500, or about $65.52 per square foot, in August of 2022. Meanwhile, in March of 2021, it disposed of another in Rockingham for $7,589,286, or about 58.29 per square foot.
“Our value of $65.26 per square foot compares favorably with the higher of the two sales at $65.52 per square foot,” the county’s tax administrator added. “Additionally, we have obtained a list of comparable tax assessments of Lowe’s stores across the state. The median of the 111 assessments reviewed is $67 per square foot. If we limit this list to only Lowe’s stores within +/-5 years of the age of our subject and +/-5 percent of the square footage, the median of the 28 resulting sales drops to $66 per square foot. Again, this compares favorably with our assessment of $65.26 per square foot.”
Akins also observed that, in his critique of the retailer’s tax liability, Joyce overlooked the fact that most commercial property owners also pay taxes on so-called “personal property,” such as furnishings and equipment, which can account for a substantial share of their overall tax bills. Unlike taxable real estate, personal property isn’t subject to the county’s periodic revaluations. According to Akins, it is assessed up front based on its cost, and then adjusted each year based on its presumed increase or decrease in value.
“While personal property can appreciate, it generally depreciates each year,” Akins went on to explain in an interview with The Alamance News. “For some property types, such as computer equipment, this loss of value is rapid. At a revaluation, real property “catches up” multiple years of value change (typically appreciating), while personal property only gains one year (typically depreciating). This means that when tax rates are reduced [after the reval], most real property owners still see an increase, while most personal property owners may see a decrease.”
For Lowe’s Home Improvement, the depreciation of personal property accounts for about 2-percentage points of the anticipated decrease in the company’s tax bill. For other businesses, such as manufacturers with pricey production equipment, the impact is much greater. Meanwhile, most homeowners also reap some benefit from depreciation, which also affects the motor vehicles parked in front of their dwellings.
The notion that non-residential property gets favorable treatment is also undermined by the tax office’s cumulative data on different categories of real estate. Although these figures show that the overall value of the county’s residential real property rose by about 81 percent during the reval, they also reveal a 76 percent increase in the county’s industrial tax base. The revaluation also drove up the overall worth of agricultural and commercial property, which respectively posted gains of 61 and 60 percent.
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But perhaps the most telling numbers come from the commercial properties that didn’t follow the pattern which Joyce had identified for Lowe’s Home Improvement.
For some commercial property owners, the county’s latest revaluation brought considerable increases in tax values that rival even the most marketable single-family homes in the county. One case in point is Holly Hill Mall, which saw its tax valuation skyrocket from $9.2 million to nearly $15.5 million – an increase of roughly 147 percent. This change, which equates to an 82 percent spike in the facility’s tax bill, is nevertheless offset by a 14 percent drop in the mall’s personal property, which will reduce the overall increase in its owner’s next tax payment to 56 percent.
