Published: Apr 17, 2012 07:04 PM
Modified: Apr 17, 2012 07:08 PM
CARRBORO - Lower property values would force tax-rate increases across the county if the Orange County commissioners proceed with a property tax revaluation next year.
The commissioners are expected to decide May 15 whether to go forward with the scheduled revaluation, Tax Assessor Jenks Crayton told the Board of Aldermen last week. He was scheduled to make the same presentation Monday night to the Chapel Hill Town Council as today’s Chapel Hill News went to press. At this point, the commissioners are seeking input from other local leaders, Crayton said.
If approved, the reassessed values would become effective Jan. 1, 2013.
In general, counties seek revaluations when local housing values exceed 15 percent or fall below 85 percent of the market rate. The county’s housing values are roughly 5 percent above market, he said.
The number of new home sales in Orange County also fell last year – only 969 were reported, most of them in the Chapel Hill-Carrboro City Schools district, Crayton said. That number is down from a high of roughly 2,200 sales in 2007, he said.
At the same time, new construction and development rose slightly, and vehicle and business property values continued to grow, he said.
State law requires counties to conduct revaluations at least every eight years, although some counties moved to a four-year cycle to limit property owners’ “sticker shock.”
Orange County adopted a four-year revaluation schedule in 1993. In 2009, after the last revaluation, many residents complained about assessed values being unfairly high.
Seventeen of 21 Triangle area counties have already voted to delay their revaluations for two or more years to give the economy time to recover, Crayton said. While local statistics also support a delay, Orange County depends more on property taxes than its neighbors because its sales tax income is limited, he said.
If the county goes ahead with the revaluation, property values would decrease and every local government would have to raise taxes to maintain the revenue to pay for existing levels of service, he said.
The countywide property tax rate would have to increase 6.6 cents per $100 of assessed property value to prevent a loss of $9.9 million, Crayton said.
The towns would see their own increases:
• In Chapel Hill, a 4.1-cent increase would be needed to stave off a $2.6 million loss;
• In Carrboro, a 3.1-cent increase to avoid losing $590,000; and
• In Hillsborough, a 3.8-cent increase to avoid losing $280,000.
The city school district tax also would have to go up, by 1.4 cents, to avoid a $1.4 million loss, he said.
The county’s current property tax rate is 85.8 cents per $100 of assessed value. With the suggested 6.6-cent increase, the tax bill for a house valued at $150,000 would increase from $1,287 to $1,386.
If all the tax increases were passed as suggested, Carrboro’s new rate would be 62.04 cents per $100 of assessed value, Chapel Hill’s rate would be 53.5 cents, Hillsborough’s rate would be 65.8 cents, and the Chapel Hill-Carrboro school district tax rate would be 20.24 cents.