Wake Officials Consider Property Tax Changes
Posted July 18, 2006 6:46 a.m. EDT
WAKE COUNTY, N.C. — Wake County is considering cashing in on the hot real-estate market.
"Here is an opportunity to generate additional funds," says Wake County Assistant Manager Joe Durham.
Right now, properties are revalued every eight years. While home values go up, the tax rate is decreased to keep tax bills about the same.
There's now a proposal on the table to reassess property every four years and leave the tax rate at its current level. On a $200,000 house, that would cost an estimated $200 more a year.
"A lot of people are going to see their property tax bill go way up," said North Carolina State economist Mike Walden.
Over the next 25 years, the change could raise more than $2 billion to help the county meet growth needs.
"In my mind, I see this as a tax increase. In the public's minds, they view this as a way that growth pays for itself," says Wake County Commission Chairman Tony Gurley.
Although this concept is a popular recommendation from the Blue Ribbon Committee, Gurley isn't sold on the idea because of the increased property tax bill. Economist Mike Walden doesn't see this as a tax hike at all.
"If you leave the rate the same, people are going to pay more property taxes to the county because their house is worth more, not because the tax rate has gone up," said Walden.
While everyone wants to see property values go up, there is a downside. Experts say in recent years, property values in Wake County have been going up twice as fast as incomes. That may make it harder for people to pay higher property taxes.
Unlike more complex ideas to raise money for infrastructure, this one doesn't require state approval, just the approval of county commissioners. But even that may not be an easy sell.
"I want to look at other options such as sales tax before there's too much of a burden on property tax," said Gurley.
The next revaluation is scheduled for 2008. If the decision is made to revalue property more often, that would happen in 2012 instead of 2016.