When the Guilford County Tax Department got the property tax collection rate up over 99 percent in fiscal 2015-2016 – for the first time in 15 years – some county officials questioned if the department could realistically get that rate even higher in fiscal 2016-2017.
Well, on June 30, the books closed out for that year and those just released collection numbers show the answer is a resounding yes: The Tax Department could go higher.
The collection rate climbed to 99.14 percent of the property taxes levied in the fiscal year that just ended, which was up from 99.09 in 2015-2016.
A high tax collection rate is important to Guilford County officials because it means that almost all property owners are paying their “fair share” and it assures that the Guilford County Board of Commissioners has access to nearly all of the legitimate property tax revenue its entitled to spend on county services and projects. Property tax revenue is the number one source of county funding each year, followed by sales tax revenue, which comes in a distance second.
Between July 1, 2016 and June 30, 2017, Guilford County was charged with collecting $331.7 million in property taxes, and, as of the end of June, only about $2.8 million of that remained uncollected.
This week, Guilford County Tax Director Ben Chavis said several factors are responsible for the new high in county collection rates. He said those include an improving economy, the transfer of the responsibility for collection of motor vehicle taxes from the county to the state, and a major foreclosure effort by Guilford County that has let citizens know the county means business when it comes to collecting property taxes.
Chavis said that more county residents have jobs these days and he said improving economic conditions also make it easier for them to pay their tax bills.
“The economy has gotten better, but it’s not as improved as we would like,” Chavis said.
Chavis also said the transfer, starting in 2013, of motor vehicle tax collection responsibilities from county tax departments to the State of North Carolina helped in two ways: One, it increased the collection rates on vehicle property taxes because people have to pay the taxes owed to get their registration renewed; and, two, it meant that county tax collectors didn’t have to spend their time collecting taxes on automobiles.
Chavis said there are about 425,000 motor vehicles on Guilford County’s tax roles and that collecting taxes on those have been onerous in the past. Cars are harder to collect on than houses, because, unlike houses, cars can be moved around.
For all those reasons, Chavis said, he’s happy to see those collection duties now in the hands of the state.
“We’re not distracted by motor vehicle collections,” Chavis said. “We’re able to concentrate on real estate full on. I think that has been key for us. We’re in the best place with that.”
Assistant Guilford County Tax Director Jim Roland said the data for other North Carolina counties for fiscal 2016-2017 is still coming in, but he added that Guilford County is now “certainly in the top 10” of all counties in the state when it comes to the collection rate. He said his best guess at this point is that Guilford County will end up seventh or eighth this year in the collection rate out of 100 North Carolina counties for fiscal 2016-2017.
Like Chavis, Roland said the county’s intense foreclosure effort has unquestionably elevated the collection rate.
“I think that has really made a difference,” he said.
Roland said that, before the program was in place, Guilford County barely used foreclosure as a tax collection tool.
Ten or 15 years ago, for instance, the county might have foreclosed on a half dozen properties a year, while, earlier in 2017, the county had nearly 1,500 parcels of property either in active foreclosure proceedings or on the waiting list to be foreclosed on.
“We decided, yes it may be painful for a while,” Roland said of the new foreclosure effort the county established a few years ago. “But we got everyone on board from county staff to the commissioners.”
The Tax Department even created a website that lists which property owners are being foreclosed on.
Roland said Guilford County is finally starting to get a grip on the giant backlog of foreclosure cases that resulted from the new strategy.
About three years ago, the county set up the in-house foreclosure shop – an operation that was a joint effort between the Tax Department and the legal department.
Roland said another thing that has helped bump up the collection rate is a decline in appeals filed by taxpayers. He said the Guilford County Board of Equalization and Review, which hears those appeals, decides matters in a timely fashion; however, he added, the same can’t be said for the North Carolina Department of Revenue when Board of Equalization and Review decisions are appealed to that department.
“If it goes to the state, it can be there for years,” Roland said of tax appeal cases.
Every appeal that lingers past June 30 each year brings that fiscal year’s collection rate down.
Roland said that, even on the remaining uncollected taxes, the county will be pursuing those payments for years and will likely get the money in the end. Some foreclosures are on tax bills that are only a couple of years old.
Chavis said he was also extremely pleased with the outcome of the county’s reevaluation of all county property. He said there weren’t a lot of complaints from property owners over their new assigned values.
“It turned out great,” Chavis said. He said that there were about 2,500 “informal” reviews at taxpayer request after the revaluation and about 1,400 cases ended up with the county’s Board of Equalization and Review.
“That worked out beautifully,” the tax director said of the countywide revaluation conducted in 2016.
In fiscal 2016-2017, about $2 million more in revenue was collected in real property tax than in 2015-2016. The property tax bills go out in July each year and, for the purposes of calculating the collection rate, the department looks at the percentage of those taxes collected before June 30 the following year.
Over the last several years, the Tax Department has also been upping its game when it comes to finding all the taxable property in the county and any improvements to it. Chavis said the addition of high-tech tax tools – such as an advanced computer pictometry system – has helped his department discover unregistered new structures and home improvements.
In pictometry, a set of aerial county photos is taken when foliage is at a minimum, generating sharp scalable 3-D images viewable from several different angles. The new images are compared – using computer software – with lower quality images that the county had taken years before. That reveals most changes of any significance.
“The pictometry tool will pay for itself,” Chavis said. “That’s why when we presented it to the commissioners we said it was an investment.”