The Magically Invisible Tax Hike
There will be a revaluation of property in Mecklenburg County this year. Look out for a tax increase.
Did Jennifer Roberts really get reelected? Well it could be worse. If she transmorgrified into Parks Helms there would be no question about the chances of a property tax increase. With Helms out and Roberts in there is only a 70% chance of a property tax increase in Mecklenburg County next year.
First, Harry Jones is not particularly well known for being frugal with the taxpayer’s money. Oh, he acts like it sometimes, but only when he is pressured to. Take DSS. No, forget the nepotism, just take the wasteful spending. Millions down the tubes and Jones still hasn’t actually done anything about it. Neither has the Board of County Commissioners (BOCC), which is why the Charlotte Observer didn’t endorse Roberts. Even that group of bigger government advocates realize there is a problem of waste in county government under Jones’s direction, and that Roberts and the Democrats are doing nothing about it. But the people of Mecklenburg voted for mostly more of the same. Mostly more of the same means higher taxes in a revaluation year. Let me explain exactly how this works.
By state law, revaluation must occur at the county level at least every eight years. The reasoning has to do with the fact property values change relative to each other over time and the idea (theoretically) is to cause the property taxes to reflect the actual value of the property. So as neighborhoods increase in value relative to other neighborhoods their taxes should go up and the taxes in those other neighborhoods go down. More specifically, if you bought a house for $100,000 in 1990 and it increased in value 2% each year, at the end of eight years the value would be (not compounded for ease of math) $116,000. Over in Myers Park, where the tort lawyers live, if someone bought a house for $1,000,000 in 1990 and it increased in value at 5% per year then in eight years it would be worth $1,400,000. In 1990 your house was worth 10% of the one in Myers Park, while in 1998 it was worth 8% of the one in Myers Park. The idea of revaluation would be to change the value of the houses on the tax rolls to reflect the change in relative values, which should lower the taxes of the $116,000 house relative to the one in Myers Park. But that is only part of the picture.
Revaluation, by its very nature is a fairly large math problem. It’s not complicated, just large. Being large it is easy to lie about.
One of the terms used during the revaluation process is ‘revenue neutral’. This mean that after revaluation the county will change the tax rate so it takes in the same amount of taxes, as if no revaluation had taken place. In recent times that has meant lowering the tax rate. This is because overall property values have generally increased. Since the last revaluation eight years ago, property values Mecklenburg County have generally increased to some extent. Even with the recent slump in values, many homes are still valued at more than they were in 1992. So if Harry Jones and Jennifer Roberts, George Dunlap and his sidekick Vilma Leake, left the tax rate the same and the county revalued all the property in Mecklenburg County at, let us say, 5% more than it was valued at in 1992, then the county would take in 5% more taxes. To paraphrase Roberts, it would ‘capture all the additional value as additional taxes for the county with no vote on a tax increase’. Neat. They, the politicians, get to say they didn’t change the tax rate, but your taxes go up.
More Math: Millage rate is the name given to the property tax rate. A millage rate of 1.00 means the tax on a property worth $100,000 is $1,000 per year. If before revaluation the tax rate is 1.00 and your house is worth $100,000, then your property tax is $1000. If after revaluation your property is valued for tax purposes at $116,000, then without a change in the tax rate your property tax would be $1160 per year. So the BOCC would have to lower the tax rate to .862 to keep your taxes the same.
The problem, more exactly, the ability to lie about a revenue neutral tax rate is the fact everyone’s property is revalued so an individual can’t look at his own property tax rate and taxes and discern if the county changed the tax rate to be revenue neutral. He can only see what happens to his own taxes.
Remember the example of the house in Myers Park. It went up in value even more than the $100,000 house, so the millage rate on it would have to be lowered even more to make its taxes the same. So to get a revenue neutral tax rate you would have to average the value changes of the two homes. Then the $100,000 house would get an even lower tax rate, while the$1,000,000 home would have a higher tax rate than revenue neutral. That average rate would be .725, which would lower the taxes to $841 on the $100,000 house while raising them to $10160 on the $1,000,000 house. In fact you have to average the change in every property in Mecklenburg to know what the correct revenue neutral tax rate will have to be. But remember, it is not the purpose of revaluation to make everyone’s taxes the same as they were; it is to make the property values on the tax rolls an accurate reflection of reality. So the intentional result of revaluation is to change everyone’s taxes to some extent. Some will pay more, others less.
In order to know what that new rate should be, one would have to know how every tax value in the county changed, but only the county staff knows that and county staff works for Harry Jones. He gives the numbers to the BOCC. So even if the BOCC asks for the numbers, they don’t know if Jones is telling them the truth. And Jones has already proven he games the system.
For the past few revaluations, it is easily established that taxes have increased after revaluation. This is true, even though the county leaders, remember Parks Helms, often said the new tax rate was revenue neutral. All one need do to determine this is examine tax revenues from the years prior to and subsequent to a revaluation. It has happened every time in the past 25 years. But notice that you, the taxpayer, the one that Roberts and Jones say they work for, can’t find out until the taxes are collected, and that is years later.
So with the county complaining of spending more tax revenue than they take and a revaluation at hand, what should you expect? It will be Harry Jones telling the county commission the numbers he wants them to have. It will be Roberts leading the BOCC, she who has done little to make county staff responsible for its abuse of the purse strings. Do you trust county staff and the majority of the BOCC with your money? I don’t. Expect a tax increase and for Jones and Roberts to say it didn’t happen. And you won’t be able to get the numbers to prove what they did until years after they increase your taxes and waste the money.
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