The North Carolina Association of County Commissioners (NCACC) is urging state lawmakers to rethink a series of proposed property tax exemption bills that could significantly reduce county revenues if passed.

Many county commissioners and administrators fear that the state bills offering taxpayer relief could end up putting a real financial strain on counties – which rely heavily on property taxes to fund their budgets.

In a letter addressed to all members of the North Carolina General Assembly, the association outlined the potential financial repercussions of the measures, calling them “unfunded mandates” that could force counties either to raise property tax rates on non-exempted property owners or cut out essential public services.

“Like you, county commissioners are committed to helping their constituents,” the letter signed by NCACC Executive Director Kevin Leonard states. “They share your deep concerns about the financial pressures facing North Carolinians.”

  However, the letter warns that, while relief for veterans, seniors and other vulnerable groups is necessary, imposing tax exemptions at the state level without providing alternative revenue sources for counties could have dire consequences for local governments.

The NCACC is a collective organization that represents and petitions for the interests of all county governments in North Carolina.

Some county commissioners in Guilford County and across the state would like to see some property tax relief for the most vulnerable but are opposed to the tax relief at a statewide level.  Some Guilford County commissioners, for instance, in budget talks this year have expressed interest in knowing more about potential programs that would offer some relief for property owners who face extra challenges.

Several bills that would apply statewide are currently under consideration in the NC General Assembly and would expand property tax exemptions for various groups and purposes.

Among them are the following:

  • H59: Elderly/Disabled Homestead Exclusion – This bill would expand tax exemptions for elderly and disabled residents. According to the NCACC, smaller counties would be disproportionately affected, while larger ones could see tax base reductions of between $7 billion and $8 billion.

S159: Elderly Property Tax Appreciation Exclusion – This bill would limit how much property values can increase for tax purposes. The NCACC opposes measures that cap property value appreciation – arguing that that would disrupt fair tax assessment processes.

H100: Expand Religious Property Tax Exemption – This proposal aims to expand tax exemptions for religious properties. The NCACC doesn’t expect a significant revenue impact but is concerned about the precedent the bill would set.

H115: Child Care Facility Tax Exemption – This bill would exempt certain child care facilities from property taxes, further reducing county property tax revenue.

H102: Owner Notification – This bill would require tax appraisers to provide detailed explanations to property owners as to how tax assessment values are determined for each property owner.

The NCACC points out to state legislators that counties have limited revenue-generation options; they rely very heavily on property and sales taxes. If some or all of the proposed exemptions pass, the association argues, counties will be forced to compensate for revenue losses through other means.

“This would leave counties with two difficult choices: raise taxes on other property owners or cut critical services such as public safety, social services, and disaster recovery efforts,” the letter states.

The letter also highlights the unique challenges faced this year by counties in the state devastated by Tropical Storm Helene – noting that damaged and unrepaired properties will already be excluded from tax bases in fiscal year 2025-2026, causing millions in revenue losses across 27 affected counties.

While opposing the current proposals, the NCACC expressed its willingness to work with legislators to develop alternative solutions.

Some of the suggested approaches include:

  • Providing state funding to offset revenue losses caused by new exemptions.
  • Granting counties the right to additional revenue options, such as more flexibility with sales or occupancy taxes.
  • Exploring alternative tax relief measures such as eliminating state income taxes for specific groups instead of altering property tax structures.

“The 100 counties, their 587 locally elected county commissioners, and our Association seek to find solutions that work for all. We welcome the opportunity to be part of the conversation as these policies are further developed,” wrote the NCACC.

With the bill-filing deadlines quickly approaching—March 25 for Senate bills and April 3 for House bills—county leaders hope their concerns will be addressed before any final decisions are made.