HUNTERSVILLE – Town residents can’t calculate their local property taxes yet – and it’s still likely the amount of municipal taxes they owe will rise because their property has been valued higher – but commissioners have demonstrated support for a significant rate decrease.
During the closing portion of a day-long, multi-topic work session April 12 – after hearing how a “revenue neutral” tax rate is calculated in the wake of a revaluation, and despite a summary of the anticipated town funds needed the next five years to pursue projects previously prioritized by commissioners – the majority of town board members endorsed the idea of lowering the town’s property tax rate by 6.5 cents to 24 cents per $100 valuation.
The rate decrease, if adopted, would represent about a 21 percent drop in the town’s property tax rate from the current 30.5 cents. It would come in the aftermath of a county-wide property revaluation, the first since 2011, that increased Huntersville’s municipal tax base more than 30 percent, from $7.14 billion to more than $9.4 billion, and resulted in the assessed value of residential properties in the county rising, on average, about 43 percent and commercial property values increasing, on average, more than 75 percent.
To understand some of the complex steps of the Huntersville value increase/tax rate/revenue neutral waltz – and keeping in mind Mecklenburg County also has tax-rate decisions pending – consider this:
Property valued at $300,000 last year and taxed at the 30.5-cent rate generated a Huntersville property tax bill of $915.00. If the value of that property was assessed 43 percent higher, to $429,000, this year, the old tax rate would generate a bill of $1,308.45. The proposed “revenue neutral” rate, 24 cents, on the re-assessed property would generate a bill of $1,029.
Not the rate proposed
The road to tax rate discussions began with a presentation from Town Manager Anthony Roberts and Assistant Town Manager Jackie Huffman. It included a financial update and a five-year outline highlighting anticipated town expenditures for a variety of road projects and municipal facility upgrades.
The presentation showed a potential need for more than $40 million over the next three years to complete or initiate a long list of municipal projects (the town has about $15 million in approved bond debt available to issue). It also included Roberts’ statement that to tackle all the projects on the town’s priority list “there will be future bonds, no ifs, ands or buts.”
Roberts ended with a recommendation for a tax rate of 25.5 cents for the next two budget cycles. The outline also included the possibility that starting in Fiscal Year 2022, with additional town-funded projects expected to begin and payments on debt anticipated, a rate increase to 28 cents would be required.
But commissioners, with references to the town’s stockpile of reserve funds and the multi-year nature of most of the projects identified in the five-year plan, still pushed Roberts to incorporate the “revenue neutral” rate in his budget proposal.
“Can you make 24 cents work?” Phillips asked Roberts.
“For one year, sure,” Roberts responded.
Commissioners Dan Boone, Mark Gibbons and Brian Hines joined Phillips in expressing support for the 24-cent rate. Commissioners Nick Walsh and Melinda Bales were less enthusiastic, referencing the long-range financial picture presented and the value of maintaining reserve funds.
An underlying issue during the tax rate discussion was the town’s reserve fund and policy governing it. State statutes require municipalities to keep funds in reserve, but the town has a higher-than-required savings threshold.
At the meeting, Mayor John Aneralla repeated his desire to lower the savings threshold to free up more money for local projects. That issue, along with the tax rate, was identified as a subject for upcoming board sessions.