By Laura Blackmon
Orange County is a great place to live in part because we have a progressive government that constantly attempts to balance service imperatives; the desire to promote education, equity and environmental protection; and the very real burdens of taxation. Minimizing the impacts of property taxes, one of the very few revenue streams available to local governments, is a major source of concern to Orange County commissioners and other elected officials.
Lately, there’s been much talk of taxes and property revaluation in Orange County. Many good ideas have been advanced and sound questions asked. Hopefully, the following can help explain some of the process, if not address all policy concerns.
The amount of tax billed to a property owner is based on two variables: the value of the property and the tax rate. Every four years, Orange County updates listed property values. The updates help to maintain equity between properties as values change due to inflation, the location of a house or parcel, renovation and improvement or a multitude of other variables. Revaluation is also mandated by North Carolina General Statutes.Â
Over time, property values in neighborhoods change and these changes occur at different rates. For instance, values in one neighborhood may increase by 30 percent over four years while another sees increases of only 5 percent. Not to revalue would place an undue burden on property owners in the neighborhood with the slower appreciation rate.Â
A countywide revaluation is an enormous and complex task. Key to that process is a concentrated and conscientious effort to ensure that property values are accurately and equitably appraised throughout the county.
The appraisal team is familiar with the county and makes every effort to consider the many factors involved in determining property values. Field inspections are conducted and sales files analyzed. Market trends are continually monitored. Contacts are made with many real estate professionals for the purpose of remaining knowledgeable regarding market factors that affect property values.
After the revaluation process is complete, a tax neutral rate is set. For example, a tax rate of 99.8 cents per $100 of property valuation produced around $118 million for the fiscal year 2008-09 in Orange County. During a revaluation year, if property values increase, as they have over the past four years, the tax rate would be lowered to a point where the rate multiplied by all new property values would still generate around $118 million or a “tax neutral†level.Â
The next challenge for the Orange County Board of Commissioners, with recommendations from the county manager, is setting the tax rate for the upcoming year. The rate may be above, below or at the new tax neutral level. After much deliberation, presentations and public hearings, the new rate will be set in June.Â
Already this year, the board has held several budget work sessions to review the needs, constraints and fiscal requirements of Orange County. We have challenged staff to come back with a neutral tax rate. We are working to reduce costs where we can, to delay or avoid capital projects and generally to implement a more financially constrained approach, particularly in these trying economic times.
Still, many county services are mandated by law, and around half of Orange County ad valorem taxes go to fund public education for both the Chapel Hill-Carrboro City Schools and the Orange County Schools. The state of North Carolina also is keeping revenues that were designated for Orange County and were budgeted based on assurance of continued availability.
The final rate decision will not come easily. Painful service cuts may be necessary. Steps already have been implemented to reduce county expenditures this year. More belt tightening is sure to be incorporated in the upcoming 2009-10 budget.Â
Please contact the Tax Assessor’s Office at 245-2100 if you have specific questions or concerns about the current revaluation process, or visit its website, www.co.orange.nc.us/assessor/index.asp
If you have additional comments, you may contact the commissioners through the county clerk by email, dbaker@co.orange.nc.us, or by phone, 245-2130. You may also contact the county manager’s office at 245-2300.Â
Laura Blackmon is the Orange County manager.