NC House passes a new bill about property taxes, with more legislation to come
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- Senate Bill 474 reduces the population threshold from 15,000 to 12,000.
- Harnett County is to be removed from the assessment freeze due to reappraisal timing.
- Senate Bill 992 would require direct taxpayer notice and public hearings for tax hikes.
Property taxes continue to keep the spotlight in the North Carolina legislature.
If votes approve a constitutional amendment in November, lawmakers could limit the amount of property taxes before the end of the year.
And the House passed a bill Wednesday — nearly unanimously — adjusting the handful of counties that might get a property tax assessment freeze.
There is already a bill sitting on Gov. Josh Stein’s desk waiting action that would temporarily freeze some counties from using new property tax assessments for tax collections. Criteria include population size and timing of property reappraisals. The only county in the Triangle area is Harnett.
Senate Bill 474, which passed the House on Wednesday, adds and subtracts some counties that would get the assessment freeze. It reduces the population threshold from 15,000 to 12,000, which adds Chowan and Pamlico counties. Another change based on assessment schedules would remove Harnett County from the freeze along with Scotland County.
Removing Scotland County from the list drew a “no” vote from a House member representing that county, Democratic Rep. Garland Pierce. Pierce was the lone “no” vote on SB 474, both when it passed on a first vote of 114-1 on Tuesday, and again on Wednesday, 111-1.
Because the House changed the bill, the Senate will have to approve the updated version before it is sent to Stein’s desk for action.
Pierce told The News & Observer in an interview after the floor vote on Tuesday that there has been “a lot of turmoil” about the latest property revaluation in his district.
“The prices of people’s houses went up terribly, and a lot of — particularly our citizens and older folks — they just could not deal with that,” Pierce said. He voted against the bill, he said, to support what the community as a whole in Scotland County wanted. He said he’s committed to working with the citizens.
Another property tax bill moves ahead
The General Assembly isn’t done tacking property taxes. Another bill moving through committees on Tuesday would require local governments, which fund services through taxes, to publicize the revenue neutral tax rate more than it currently does. Having a revenue neutral rate means the municipality or county would receive the same amount of tax income as the previous year, but some property owners could pay more or less taxes depending on the assessed value of their homes.
Senate Bill 992, called “Truth in Taxation,” would require local governments to directly notify property taxpayers and publish their plans to raise taxes beyond the revenue neutral rate, along with holding public hearings about it.
Sen. Carl Ford, a China Grove Republican, wants property owners to have more input on property tax rates.
“Most folks don’t know, let’s be honest, because it’s figured into their mortgage,” he said.
If someone owns a home, their mortgage payment may go up with tax increases, because property taxes are paid as part of mortgage payments, not as a separate payment to cities, towns and counties.
Local governments already do hold public hearings on their budget proposals every spring. Ford said that in his district, local officials tell him that no one shows up for public hearings.
“No one cares because no one knows,” Ford said. “We just want everything and everyone to be a little more transparent.”
State law already requires local governments to publish what the revenue neutral tax rate would be, a legislative analyst told lawmakers, but not public hearings and notifying taxpayers individually about revenue neutral rates.
It’s unclear if the bill will make it to a Senate floor vote, and the House speaker was not aware of the new legislation yet.
Sen. Lisa Grafstein, a Wake County Democrat on the committee, said she wished “we could have a bill that applies to our budget writing,” referring to transparency in the state budget. As a Democrat in the superminority in the Senate, she and other Senate Democrats are kept out of the budget writing process because Republicans hold a supermajority.
In a committee room next door, top Republican budget negotiators and staff were meeting to finalize the state budget. Top budget writers in the House previously told The News & Observer that Stein’s office has been part of budget talks over the past few weeks and months. The budget document is expected to be public by the end of June.
Constitutional amendment on property taxes in November
Voters in November will decide whether to pass a constitutional amendment that would require the General Assembly to instill a property tax levy limit, though there is no set amount yet.
If voters approve the measure, lawmakers could then pass new legislation setting that limit during its 2027 session — or even earlier. On Tuesday evening after House votes, House Speaker Destin Hall said that lawmakers could return for voting sessions in November or December.
Hall said if voters pass the amendment, it would give them “some clear direction and clear authority to go in and reform that process. .... I think that there’s an effort, at least on our side of the building, to maybe even do some of those things this year.”
