Let's Talk Property Taxes, County Revenue, and Proposed Levy Limits

There are ways for our state legislature to do property tax reform that could help those in need, while still making sure our counties are properly funded. House Bill 1089 isn't it.

You cannot talk about the affordability crisis and Cabarrus County without talking about property taxes. If you own or rent a home in this county, then you know about the revaluation that occurred in 2024. 

My property tax bill on the home that we bought in 2020 went up just like everyone else’s, and like many of you, I am concerned for those individuals and families who are struggling to make that payment each year. 

Many people are hoping there is a way to bring costs down and not have the “sticker shock” of 2024 repeat itself. However, the proposed levy limit in House Bill 1089 is not the remedy that many think that it is. 

If you are not familiar, House Bill 1089 is a constitutional amendment requiring legislators to enact a property tax levy limit. One of the main sponsors on the bill is Cabarrus’ own Rep. Brian Echevarria, and the bill moved quickly through the General Assembly last week. Per the Carolina Journal, the ballot question will read “Constitutional amendment requiring limits on property tax increases by local governments,” and voters will decide to support or oppose it in the upcoming election. 

However, voters will not be voting on a specific limit - they will only be voting on whether or not the General Assembly has the authority to enact a law that limits how much a local government can increase property taxes. If the ballot measure is passed, then the general assembly will have to determine the specifics, such as the number or percentage, and how much inflation or population growth will factor into future rates. Therefore, it’s possible that the earliest that our state would see this law go into effect would be heading into the 2028-29 fiscal year. 

Before I get into the specifics of the potential ramifications of this amendment, it’s important to note that North Carolina already has a levy limit of $1.50 per $100 assessed property value. However, there is no limit on how much a county can increase their property tax rate year-over-year, and no counties are currently close to the $1.50 rate. The current rate in Cabarrus County is $.576 per $100 of assessed value. The rates of a few counties surrounding Cabarrus are $.4342 (Union), $.58 (Rowan), $.51 (Stanley), and $.4927 (Mecklenburg). As of this writing, the highest rate in the state is $.99 (Scotland). 

I am disappointed (but not surprised) that the bill passed the General Assembly, and I will be voting “no” in November, and here is why:

This amendment will not be “saving” taxpayers money like its most ardent supporters claim

A uniform limit is not going to solve the affordability crisis, and if enacted poorly, can actually make it worse for North Carolinians. 

We enjoy, and are proud of, the services that our county provides. We have one of the best school systems in the state, a very safe county (thanks to law enforcement, EMS, fire fighters, etc.), and most of that is paid for via property taxes. 

A significant majority (65%) of the money that funds our local government comes from property taxes. That is, by far, more than the next closest sector (sales & other taxes, which come in at 19%). 

If our county is severely limited by its ability to raise revenue via property taxes, then where will that money come from? It’s almost certainly not going to come from the state or DC, which means we might have to increase taxes elsewhere. I do not think that raising the sales tax is a good idea; it’s a regressive tax and would only put more pressure on the lower and working class. Plus, counties are limited by how much they can raise their sales tax to begin with.

If our county cannot raise the funds necessary to fully fund our government, then the question becomes what do we want to cut? We cannot afford to cut teacher pay or administrative staff in our schools. Anything affecting our kids should be the absolute last thing on the cutting block. What about our sheriff’s office? Do we think it would be a good idea to have fewer corrections officers? Or EMS workers? Or fire fighters? 

I do not! If we are not careful, those are the kinds of services that we might take for granted, and not realize how urgent they are until they are gone, or severely hampered. 

Think-tanks and county governments spanning the political spectrum think levy limits are a bad idea

Numerous county governments in North Carolina have voiced their opposition to this amendment. Counties ranging the political, ideological, and socioeconomic spectrum have released statements about why they cannot support a levy limit. 

Rural, less wealthy counties like Robeson, Bladen, and Columbus have come out against it. Major metro and urban counties such as Wake and Mecklenburg have voiced their displeasure, as well as our neighbor to the south. Union County is facing many of the same issues as we are, and their Board of Commissioners unanimously approved a resolution during April’s meeting to oppose the levy limit amendment. 

As of this writing, I have not found a single local government or municipality that has come out in favor of House Bill 1089. 

The North Carolina Association of County Commissioners has voiced their concerns, stating that “the bill creates a constitutional levy limit that would restrict counties and their ability to plan for growth and make responsible, long-term budget decisions.”

Think-tanks and political advocacy groups, ranging from progressive to strict nonpartisan to libertarian, have written about the potential downfalls of levy limits. 

Our state legislature cannot pass a budget, but they should get to decide our county’s property tax rate?!?

Not much else needs to be said, but I’ll expand anyways. 

If our elected officials can’t work together to do the bare minimum - pass a budget - how are we supposed to expect them to collaborate on a levy limit that will make sense for all 100 counties?

Also, why should elected officials from Haywood, Sampson, and Tyrrell counties have a say in how Cabarrus County chooses to fund its local government? Counties like Cabarrus, Union, and New Hanover are facing drastically different issues than those rural, less developed, and less well-off counties. 

This is a local control issue, as much as it is anything else. I trust the elected officials of Cabarrus County to understand the needs and challenges facing our county, and how best to fund them, than I do our state legislature. 

A more fair taxation system would be a significantly better way to help lower costs for citizens, while still funding local governments

It is good that our elected officials recognize that property taxes have become a burden for many people in our state, especially those that are low-income and/or on a fixed income. 

However, there are a multitude of ways that they could provide assistance to the most vulnerable, and alleviate the burden on middle and lower-class homeowners, that don’t involve a strict levy limit. Some of those ways include:

• Taxing the wealthy just a little more: Our state taxed different incomes at different levels for almost 100 years, until 2013 , when our legislature introduced a flat tax rate of 5.8%. The current tax rate is 3.99%, and will likely drop to 3.5% next year. The corporate tax rate is scheduled to drop to 0% by 2030. I do not think that it is too much to ask that the corporations that are raking in record profits, and the ultra-wealthy individuals who have prospered in our state, pay slightly more than they are right now, so that the burden on the rest of us is not so great. 

• Reform the property valuation system: accurate assessments are needed for the property tax to be fair. Revaluations could be done annually, which could lead to less dramatic increases. And increasing the staffing and training of Assessors’ offices could lead to more accurate revaluations. 

• Amend the uniformity clause: in layman’s terms, the uniformity clause says that all property tax rates throughout a taxable area (such as a county) must be taxed at the same rate. For a county that is heavily residential, like Cabarrus, that means that much more of a burden is on residential property owners than commercial. Residential values have risen much faster than commercial, and giving local governments the ability to tax those properties at a different rate could lessen the burden on residential owners. 

• Expand eligibility for targeted property tax relief: Avenues could include, but are not limited to: circuit breakers (tax credits back to property owners whose property tax bill exceeds a certain threshold), expanding homestead exemptions, and extra relief for vulnerable disabled veteran homeowners. 

In summary: I am incredibly sympathetic to those who are feeling the strain of property tax increases. I do think that change is needed at the state level to minimize the responsibility of residential taxpayers and property taxes. However, installing a strict levy limit is not the best way to offer that help. 

Local governments are already limited in how they can respond to growth, and a levy limit will just add another restraint. With a strict levy limit, the question moves from “how local governments balance revenue and need” to “how much room they are allowed to have in making that determination.” 

It is imperative that our fast-growing, dynamic county be able to continue to fund the services that help make our county great, as well as plan for the next generation. That is why I will be voting “no” on House Bill 1089 in November.