Property taxes will be under the microscope next year in the state legislature, following Monday’s announcement of a bipartisan committee tasked with finding ways to bring financial relief to homeowners.
Republicans took control of the North Carolina General Assembly in 2011 and, in the years since, have rewritten tax laws to reduce income taxes and expand the list of things people have to pay sales taxes on. That strategy has shifted tax burdens from businesses and the wealthy onto less wealthy people.
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GOP leaders have credited it with contributing to the state’s economic boom. Democrats have argued that the cuts have gone too far.
But the state legislature has so far made few changes related to property taxes.
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.
A broad effort to lower property taxes could lead to budget cuts for schools and police. This new push is expected to be more targeted. State House Speaker Destin Hall said in a statement that the new committee would look into “practical ways to reduce the burden on homeowners without undermining local services.”
To that end, Hall named a committee to tackle those issues next year. It will include members from both political parties, and from areas rural and urban.
“I know how hard North Carolina families work to build stability in the home, and they shouldn’t be hit with out-of-the-blue property tax spikes that threaten that,” said Rep. Julia Howard, R-Davie, who will serve as co-chair of the committee.
Hall’s announcement didn’t indicate whether the new committee would seek to take away or change the power of local governments to set tax rates. A Hall spokesperson didn’t immediately respond to a request for more information on the goals of the committee.
In some parts of the state — especially in more rural areas — property tax rates have risen because a lack of new development, or the loss of people and businesses, has forced local leaders to raise rates on those who remain. Most North Carolina counties shrank in population between 2010 and 2020, even though the state’s population as a whole skyrocketed. The fastest-growing parts of the state, meanwhile, have been able to keep property tax rates low as new development has broadened the base of what can be taxed.
But even in Wake County — which has among the lowest property tax rates in North Carolina, and whose residents are the wealthiest in the state — some lawmakers are still concerned with the impact of any potential rate hikes. In part that’s because Wake County also has higher property values than most of the rest of the state. And in part it’s out of particular concern for seniors struggling to keep bills paid, and for young people trying to afford their first home.
Hall named multiple Wake County lawmakers to the committee, including one of its co-chairs, Republican Rep. Erin Pare.
“High property taxes can make home ownership out of reach for hard-working North Carolinians and force seniors on a fixed income out of their homes because they can’t afford sky-rocketing property taxes,” she said in a statement. “This new committee will work to deliver responsible reforms that balance homeowner affordability with a local government’s ability to meet community needs.”