The Guilford County commissioners aren’t just trying to reduce the county’s tax rate – now those same commissioners are attempting to keep down the tax rates for the cities of Greensboro and High Point as well.
In a very interesting move at a Thursday, Sept. 20 work session in the Blue Room of the Old Guilford County Court House, the Guilford County Board of Commissioners rejected a proposal by Guilford County Tax Director Ben Chavis to change Guilford County’s property revaluation schedule from once every five years to once every four years.
Chavis gave a string of compelling reasons why the county should make the change; however, in the end, the board voted against it. The reason? The Guilford County commissioners know that the property revaluations are used by the City of Greensboro and the City of High Point to push “hidden” property tax increases on the citizens in those two cities, and moving to a shorter tax revaluation cycle would mean more frequent opportunities for the two city’s to do that. So the Guilford County commissioners voted down the tax director’s proposal and they let it be known why.
Every county in North Carolina is required by law to hold a revaluation of all parcels of property in that county at least once every eight years. Since property values almost always increase over time, most land, houses and commercial buildings are valued higher after a “reval,” as the process is known.
Unless the governing body reduces the property tax rate when the new values go into place, the town, city or county gets a jump in revenue at the expense of taxpayers because the higher assessed property values mean higher tax bills under the existing tax rates.
For that reason, when the commissioners adopted a new county budget for 2017-2018, the board reduced the county’s tax rate so that it was “revenue neutral” – that is, so that the amount of revenue coming in from property taxes would remain the same. The county’s tax rate on July 1, 2017 went from 75.5 cents per $100 of assessed property value to 73.05 cents to account for the revaluation. To have left the tax rate at the previous level would have meant a tax hike on the citizens.
Since 2012, when Republicans won a majority of seats on the Board of Commissioners, the Republican-led board hasn’t increased property taxes and in fact has been steadily bringing the tax rate down. In keeping with that philosophy, after the countywide property revaluation of 2017, the board lowered the tax rate to a revenue neutral rate.
It was a different story for the Greensboro and High Point city councils, however. Both left their tax rates the same after the 2017 revaluation. That meant Greensboro collected about $5.8 million more from its citizens while High Point collected $2.6 million more.
There were also news reports in the summer of 2017 stating that the Greensboro City Council and the High Point City Council didn’t raise taxes – although, really, a failure to adjust the rate meant that the cities did in fact increase property taxes on those who live in the two cities.
So when, at the Sept. 20 work session, Chavis came before the Guilford County commissioners and asked for the shorter revaluation cycle, the commissioners said he had a good argument but it still wasn’t going to happen.
Chavis stated that the shorter cycle would better capture the true value of homes and property in the area. He said a shorter revaluation cycle puts property valuations back in line with real market values and he added that, the longer the interval between revaluations, the farther property values get out of alignment with their true market values. The tax director also said more frequent evaluations helps reduce appeals and keeps everyone paying a “fair and equitable” amount.
After Chavis’ presentation, Commissioner Jeff Phillips made a motion for the county to keep the revaluation period at the current interval of once every five years. Commissioner Skip Alston pointed out that, if the board wanted to leave the cycle as it was, no motion was required.
However, Phillips said he thought it was important that the board make the motion and pass it. He asked Guilford County Attorney Mark Payne if there were any reason the board couldn’t make a motion to leave things as they were. Payne’s response was that the board could either “not take action or make a motion to stay the same.” It was clearly six of one and a half-dozen of the other.
The board had had a similar discussion on this topic at a retreat in February. At that time, Phillips was one of several commissioners who spoke on the inherent tax increases when the two cities kept their tax rates the same after the 2017 revaluation. After the retreat in February, the Rhino Times ran an article about the discussion with a headline, “Guilford County Commissioners to Greensboro and High Point: We Know What You Did Last Summer.”
“I’m not going to belabor this because I’ve said it before and I’m not going to make a bigger deal out of it,” Phillips said at the Sept. 20 work session before the vote was taken. “I can’t get there. I’m not going to get there. I’m just one vote but I can’t, in all good conscience, support what I believe to be an almost certain tax increase on the citizens of Greensboro and High Point should we go with [the shorter cycle]. And that is even if we do the responsible thing – in my view – and go revenue neutral after a reval.”
Phillips said he appreciated Chavis’ effort and his presentation.
Commissioner Hank Henning, an anti-tax increase Republican like Phillips, also said he didn’t believe the county should make the change,
“The reality is that the other municipalities have proven they are just going to keep the money,” Henning said.
Henning also said that keeping this area competitive for attracting and keeping businesses and residents means keeping the costs of living here low. He said that going to a shorter revaluation cycle was “tantamount to a tax increase” for the citizens of Greensboro and High Point. He said that when the cities did not go revenue neutral it “increased the burden on our citizens.”
Henning, like the four other Republicans on the nine-member board, has never voted to raise taxes and has voted to lower them several times.
“I just can’t in good conscience justify making it one year easier for us to just take more and more,” he said. “Because all we’re doing is taking advantage of a good economy to take more and more from citizens. For that reason, I just don’t feel comfortable – because I know what the result is going to be.”
Just as Phillips did, Henning told the tax director he appreciated his work.
At the Sept. 20 work session, Guilford County Commissioner Justin Conrad said of the proposed shorter cycle, “It would be a tax increase. I think we did the responsible thing after the reval by staying revenue neutral. I think we were the only board that did that if I’m not mistaken.”
Conrad said the cost of living was a key issue for people when deciding where to locate.
“I’d like to keep us going in the right direction,” Conrad said.
There was one voice of dissent on the board. Alston said that, as a Realtor of 35 years, he believes a higher assessed tax value on property helps the seller.
“You’re robbing the homeowners of the true value of their homes when they get ready to sell it,” Alston told the board.
However, many in the room said that the listed tax value doesn’t really influence the price that one gets for homes and other property.
Guilford County Commissioner Alan Perdue said, “I recently purchased a property and the tax value had no bearing on it – it’s a market issue.”
At the meeting, Phillips made the motion to leave things the same and that motion passed with Alston as the only no vote.
After the work session, Henning said he wanted to state on the record that he was prepared to vote for a shorter reval cycle prior to the summer of 2017 when Greensboro and High Point took advantage of the revaluation to implement a stealth tax increase on citizens in those cities.