‘It takes away from your quality of life’: NC lawmakers again focus on property taxes

State lawmakers on Wednesday continued examining how they can offer property tax relief to North Carolinians as property values increase in this growing state at a time when the cost of everyday goods remain elevated. 

The House Select Committee on Property Tax Reduction and Reform, formed last year by House Speaker Destin Hall, held its inaugural meeting last month and on Wednesday convened again to hear presentations from organizations representing cities and counties. 

Republican legislative leaders in recent years have rewritten tax laws to reduce income taxes and expand sales taxes. But the state legislature has made few changes related to property taxes.

There are broad questions about what authority the state legislature would even have to make changes to property taxes, which are set by city and county governments. 

Unlike income tax and sales tax revenue, property tax revenue doesn’t go to the state. The money stays in the cities and counties that collect those taxes, helping fund local schools, parks, police, sheriffs and more. And individual cities and counties — not the state legislature — are in charge of setting local property tax rates. 

While lawmakers’ new focus on property taxes is designed to look at ways to reduce housing costs, it has also prompted concern from some local officials who worry that the legislative effort will lead to second-guessing from lawmakers over local spending decisions.

Kevin Leonard, who leads the North Carolina Association of County Commissioners, said about 75% of local government spending goes to public safety, schools and health programs.

"These are not nice-to-have services," he said. "These are services that hold our communities together." 

On Thursday, a day after this article was first published, Democratic Gov. Josh Stein expressed some skepticism that the legislature could overreach and start stepping on the authority of cities and counties across the state to spend their money how local residents see fit.

"I'm wary, when the General Assembly starts to say to local government, "You cannot make for yourself the determination what's in the best interest of your community."

Stein added that he wasn't totally opposed to the idea, however, and could particularly see himself getting on board with ideas narrowly targeted to help those most in need.

"I'm very open to the idea of trying to keep costs on certain vulnerable populations in check," he said. "I recognize that there are certain people who are really struggling with the rising property tax bills they're facing."

Wake County commissioners discussed the issue during a board meeting Monday, saying housing affordability is among their top priorities this legislative session. Commissioners are wary, though, that the legislative committee won’t fix the property tax issue, but instead meddle in their spending decisions — the same concern Stein raised.

The legislature in recent years has sometimes inserted itself into local government decisions, either to punish left-leaning cities and counties that Republican lawmakers are unhappy with, or to override votes regarding proposed new development that political donors have sought.

“If the General Assembly thinks you’re spending your money in a haphazard way, they can come by and make our lives not so happy anymore,” Philip Isley, a lobbyist who represents Wake County, told commissioners during the meeting Monday.

‘Under the microscope’

State Rep. Erin Paré, R-Wake, a committee cochair, speculated that some municipalities are using revaluations of homes as an excuse to increase property tax to bring in more revenue and spend more money. 

“We have to look at what … these dollars that they're bringing in from these property taxes are actually getting spent on the local level,” she said in an interview with WRAL.  

Leonard said that in the last three years, 71 of the state's counties have done property revaluations, and in all 71 counties, home prices have gone up and every single county has responded to that by lowering property tax rates. He acknowledged that not all of them have lowered property taxes so much that people weren't hit with higher bills. But the bills at least aren't as high as they could've been, he said, and besides, counties have rising prices to deal with as well due to wage growth, inflation and more.

Regardless of how people feel about property taxes, he said, the evidence shows that the state is booming. Property taxes clearly aren't driving people away, he said, or causing businesses to move elsewhere.

Wake County leaders said they do not expect sudden changes aimed directly at Wake. But they said state-level efforts to rein in property taxes could force tough choices on counties across the state, including cutting services or finding new ways to raise revenue.

“Your core governmental function — how you fund so many of your projects — is now under the microscope of the General Assembly," Isley, the county lobbyist, cautioned Monday.

Commissioner Shinica Thomas, a Democrat who represents a North Raleigh district, thinks Wake County does a good job spending money in an efficient way that benefits the public. She says she hopes the committee sees that.

“In Wake County, we’re growing by about 66 people a day,” Thomas said during the board meeting. “This [Wake] board has been very intentional about how we spend money, especially on public safety, public education and the public good.”

On Wednesday the legislative committee also plans to discuss nonprofit property tax exemptions and how they affect local tax bases.

Hall said when announcing the committee last year that the bipartisan body would look into “practical ways to reduce the burden on homeowners without undermining local services.”

Wednesday's meeting kicked off with a presentation by Chris McLaughlin, a UNC School of Government expert on local governments. He gave a brief history of property tax law in the state and then laid out a series of hypothetical steps the legislature could try taking, explaining why some would be illegal, some would be legal and yet others could land in a legal gray area.

Affordability in focus 

The legislative committee — which is expected to meet again in February, March, and April — isn’t expected to yield any immediate change. But the meetings could signal to voters that lawmakers, who face reelection in 2026, are at least looking into issues that matter most to them at a time when lawmakers are locked in disputes over a comprehensive state budget, a scenario that has all but halted other legislative business.

Cost-of-living issues have been top of mind for North Carolina voters and beyond in recent years as inflation has increased the cost of everyday goods, polling has shown. 

Increases in the prices of necessities such as groceries, utilities, and rent have put a strain on Americans. Food prices have risen about 25% since the Covid-19 pandemic, according to the U.S. Department of Agriculture. The rise has increased voters’ focus on affordability. The housing price index for the state rose to an all-time high last year, according to data from the U.S. Federal Housing Finance Agency dating back to 1975. 

To Robin Rhaney, a retiree living in Raleigh, rising property taxes have become an additional burden at a time when costs of goods and services are increasing. 

Outside a Harris Teeter grocery store in Raleigh, she said she worries that continued tax increases could eat into one of her biggest spending priorities: contributing to expenses for her grandchildren, including their education. 

But it takes a bigger toll on her day-to-day. 

“It just takes away from your quality of life,” she said. 

WRAL state government reporter Will Doran contributed to this report.