Date: Tue, 31 Mar 2009 14:47:26 -0500
From: Tom Glendinning
Subject: Taxing Question
To Mark – in response to Tax Questions:
I worked in the tax dept for almost two years doing property appraisals during revaluation. (2000.) The procedures for appraisal are codified in the state statute, and, as you surmised, are based on values for sales occuring before the crash because few sales occured afterwards. So, the comparable values (sales) are stuck at a higher level than sales might be if properties were actually sold at today’s values. A tax appraiser can not speculate on what a property might sell for based on asking prices. If the real estate market remains depressed, the pricing and values will decline during the next revaluation. That, however, is four years away.
The county revenue is divided into several sources: property tax & other sources [sales tax(16%), fed & state pass throughs(10%), fees & permits(2%), and sales & service fees(3%)]. Approx. 55% is property tax & 45 % other. So, of the $ 75 million budget, approx $ 41 mil. comes from our real property. The tax rate is determined roughly by how much is spent divided by the total tax base. If the total value increased and spending remained the same, the rate would decrease.
The value of my parcels increased by 28.5 %, a fair valuation in four years. I trust that the tax rate will remain revenue neutral so that my actual taxes paid will not increase by the same perentage as value for 2009. Further, I hope that spending will not increase in these times, keeping the county connected to its citizens and their conditions. Retirees depending on investments & IRA’s are severely handicapped by the stock market crash. Layoffs have hurt others. As long as Social Security lasts, that income should remain constant among the sources that are failing. If county spending were to reflect the economy and the plight of its citizens, it would decrease dramatically. Please note in the reports of actual expenditures, found on the URL below, that county spending has increased 45 % in three years (2005-2008.) New homes built have accounted for much of that increase. However, residential development costs more in services than farm or industrial lands.
There are programs to reduce property taxes for the elderly and handicapped, as well as land use exclusions for farmers and timber plot owners. Last year, a new program was enabled – the homestead exemption. This one is complicated and best explained by a tax department specialist. Farmers know the details of the land use exemption. Elderly must be over 65 years with an income of less than $ 25,600 to qualify. A handicapped person must be at 100% disability to qualify. Significant reductions in property taxes are offered in each of these programs.
There a brochures available expalining the different programs. An application for tax reduction may be requested from Staci Stewart, specialist in the tax department. Phone number is 545-8405.
Along with the application, there are certifications to qualify for some programs:
Land use AV-5
Disability AV-9A
Disabled Veteran NC DVA-9
County budget info:
http://www.chathamnc.org/Index.aspx?page=529