No doubt you have heard many complaints about revaluation. That's true for Lincoln County but also for Gaston, Catawba and other counties whose revaluation happened this year.
Revaluation of properties for tax purposes is required by state law at least every eight years, but most counties (all in this area) have opted to do it every four. That's not a 'money grab' as some would suggest. There have been, although they are rare, occasions when property values declined or didn't appreciably change between revaluations.
The 2023 revaluations showed significant increases in values across the board. In Lincoln County, the average increase was about 65%, but some properties increased by a larger percentage.
While values increased by that amount, that does not necessarily mean your tax bill mailed out in July will increase that much. Lincoln County Commissioners have tentatively decided on a rate of 49.9 cents per hundred dollars valuation; the Lincolnton City Council has chose n a City tax rate of 50 cents (per hundred dollars valuation). In the case of residents of the county who live outside the city, tax bills will also include an additional fire district tax.
The County Commissioners tentatively agreed to reduce their rate from 61.9 cents--a decrease of 20%. Obviusly, if your property value increased by 65%, that means your County tax bill will increase.
The City Council tentatively reduced their rate from 56 cents to 50 cents--a decrease of just over 9%. Likewise, that means city residents will also have a larger City property tax to pay.
Revaluation is required by state law and appraisers are required to do their best to place values on properties that are in line with what the property is worth based on factors including sales of similar properties in the same area.
They revalued properties at 65% more (on average) than what they were valued in 2019 (the previous revaluation) because the market values actually increased on average by that percentage.
Please note that the tax rates we've reported are tentative: they will not become law until a public hearing is held by both the City Council & County Commissioners and a vote is then taken.
When Lincoln County Commissioners met on April 14th, Commissioners Bud Cesena and Anita McCall voted for the 49.9 cents rate, although Cesena said he actually favored a penny lower. Cathy Davis and Jamie Lineberger both favored a rate just over 50 cents and Commission Chairman Carrol Mitchem wanted a rate lower than that suggested by Cesena. Davis & Lineberger opted to compromise and voted for the 49.9 rate; Mitchem voted against.
Both Davis & Lineberger expressed concern that the 49.9 rate would require over a million dollars of the County's Fund Balance be used to balance the budget and that holding it at that rate might result in requiring an increase in the rate next year to balance the budget since a significant part of the Fund Balance would already have been spent.
Actually, one capital improvement item in the fiscal 2024 budget, a new office in one of the eastern Lincoln County districts for the Sheriff's Office, won't likely be spent until fiscal 2025, so the amount likely to be spent from the Fund Balance will likely be about $200,000.
After their meeting, we asked each of the Commissioners to provide us with a written comment on the 49.9 cents rate. Four of them did, but Mitchem said he'd rather we just tell what he said.
Mitchem said he believes a lower rate was possible, although he wasn't pushing for a 'revenue neutral' rate (the County getting the same taxes from property as in fiscal 2023). That rate would have been 43.5 cents, but County Manager Davin Madden said that choosing to do that would have nixed raises for County employees, reductions in staffing, and reductions in money for schools.
Mitchem noted that the Commissioners had opted to keep a 20% Fund Balance, although the state requires counties only to keep 8% (about what it takes to operate the County government for one month). "I know it helps our bond rating," Mitchem said, "but with inflation like it is, this is not the time to raise taxes."
Commissioner Jamie Lineberger responded to our query: "Two of my main purposes as a County Commissioner are to be a good steward of County funds and to keep the taxpayers’ interest at the forefront. After a great deal of back-and-forth discussions with County departments and boards, the proposed tax rate of 49.9 will provide the bare minimum funding for 2024.
"This tax rate also leaves no room for capital emergencies for any County departments or boards. By setting the rate at 49.9, we know approximately one million dollars will need to come out of the Fund Balance, then that one million will need to be replaced as part of the 2025 or 2026 budget. It is crucial that our Fund Balance be maintained or improved since a large part of the County’s bond rate is based upon this fund. The bond rate is critical when the County borrows money. The better our bond rate is the lower the interest rate the County incurs, in turn saving taxpayers money.
"Budget and tax rate discussions and decisions are sometimes difficult but needed to help Lincoln County continue to be a great place to live."
Commissioner Anita McCall told us: "We Commissioners looked at .505, .499 and .465 per $100 valuation for Lincoln County property tax rates. After the recent tax reassessment, all of our property values went up exponentially.
"Our Lincoln County projected revenue is $136,240,147 with projected expenditures $143,492,147.
"The Lincoln County Schools system has requested $30,845,287 and their FY24 proposed total school expense is $38,679,130. This is more than our last agreed year of the 3-year agreement struck between the Schools and the Board of Commissioners.
"A Revenue Neutral rate for Lincoln County for FY24 would be .435, yet it isn't possible to get to that rate without drastically cutting services.
"In reviewing a budget possibility at .465, the cuts would have included Lincoln County retirees' benefits, a Sheriff's Detective position and four reclassifications eliminated, cut three Sheriff's vehicles from the budget; also cut would have been a DSS Social Worker II for Children's Services and two EMT/Logistic Specialists, just to name a few.
"This would still have left $1.5 million needing to be transferred out of the unrestricted Fund Balance to balance the budget. This would have been uncooperative and illogical for providing services for Lincoln County residents.
"The tax rate of .499 is the best choice. It gives us a shortfall of $1,087,800. However, there are some things in the budget which will not happen in FY 2024, which begins July 1st. One for example, the building won't be ready to purchase in East Lincoln for the Sheriff's Department until FY25. So, the slated $875k will not be spent until FY25. This leaves an actual shortage of $212,800. This amount can be transferred from the unrestricted Fund Balance to balance the budget without having to cut services.
"This budget was not extemporaneous. I have lost many hours sleep, trying to arrive at a budget which was the best for Lincoln County citizens."
Commissioner Cathy Davis said: "With the proposed tax rate of 49.9 (down from 61.9) we will be using a little over a million dollars of the Fund Balance to balance the budget; and if there are capital emergencies--such as a boiler or chiller going out, etc.--we will continue to dip into that fund.
"As I am sure you already know, the amount of money in the Fund Balance improves our bond rating, and with the need for a new school in the near future, that rating is important.
"I assure you that none of the decisions made pertaining to taxes have been made without much deliberation."
Commissioner Bud Cesena explained: "The demand for County services is at an all time high. While I would have liked to have kept a revenue neutral tax rate this year, that was not possible without cutting services dramaticly across the board. As it is, the Sheriff and Schools cut their initial requested funding significantly without jepordizing safety or our children's educations.
"I am disapointed that we could not hold off on the revaluation process until the market stablizes. I understand the reasoning, but I don't have to like it.
A great deal of thought and hard work goes into setting the tax rate and I believe the 49.9 rate is a fair and reasonable compromise."
Those who believe their valuation is in error have until noon this Friday (April 28th) to file a formal written appeal (the deadline for informal appeals has already passed--it was 30 days after the Tax Office mailed out revaluations). An appeal form is available online and those who need help in understanding how to fill it out can call the Tax Office at 704-736-8670.
Tax Administrator Susan Sain said the Board of Equalization and Review, which considers the appeals, met the first of April. She told us the Tax Office has received appeals (formal and informal) from about 6% of the revaluations, in all, about 3200. Sain said that's a fairly typical number and that with the big increases in values, less than they had expected. Of those reviewed so far, she said about half of those who appealed have had their revaluation changed.