Our Board of Tax Equalization is not up to the job | Eastern North Carolina Now

Publisher's note: This post appears courtesy of the Beaufort Observer.

    If you think you got a good deal or a fair deal in the revaluation of your property for taxes this year, there is a very good chance you did not. Did you breathe easier when you saw your property value either did not go up or just went up a small amount?. If that is the case, just wait until you get your tax bill for FY 2019.

    Unless your property value went down twelve percent or more you will pay more taxes this year than you paid last year. Here is why. The revenue neutral increase of three cents applies to all property. "Revenue neutral" is a theoretical number of what the rate would be in order to raise the same amount of money county-wide after tax revaluation. All that revenue neutral means is that the tax rate was increased three cents so the County can spend the same amount of money they spent last year. Then there is the 3.5 percent increase in spending. Add the 3.5 cents to the 3 cents and divide by the 2017 tax rate of 55 cents and you get a 12 percent increase.

    Do not allow the boys at the Beaufort county funny farm try to convince you the 3 cents of revenue neutral is meaningless and does not apply. It is simple. If your property is valued at the same price it was last year, you are going to pay 61.5 cents for the same property that you paid 55 cents for last year. In my book that is an increase.

    Even more disturbing to me is the Board of Equalization and Review simply does not understand what their responsibility to the tax payers is. This board exists to adjust the value of incorrectly valued properties. It is where to take an appeal if you feel your property was incorrectly valued. The word "Equalization" means all properties are to be valued on the same level playing field. That is, fairly valued. No single category like undeveloped lots or developed commercial property is to be valued at a different standard than any other category.. Your property is supposed to be valued at the "fair market value." Or another way of saying that, "what it would sell for on the market today if sold on the open market."

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    Tax laws having to do with how properties are valued for tax purposes are set out in the General Statutes. They apply to every piece of land in the State of North Carolina. And they are supposed to be applied uniformly. Or, to put it another way, every parcel should be treated equally-hence the name of the appeal board.

    Here is the crash course. Residential property, raw land, and undeveloped lots are to be valued based on recent comparable sales. Commercial properties may be valued based on rental revenue, cost of construction, cost of replacement construction, or comparable sales. The method selected on commercial properties requires judgment and fairness. Comparable sales do not apply if properties are transferred in a distressed sale. A distressed or unfair sale is a forced sale such as a foreclosure or a bankruptcy or an unusually quick sale such as when the seller desperately needs cash. Now you know just as much as any member of the Board of Equalization and Review.

    In Beaufort County, the Board of Equalization and Review consists of the Board of County Commissioners. It does not have to consist of the Board of County Commissioners. We can appoint a board. Maybe the time has come to do just that? The deliberations of this board are open to the public. However, Beaufort County uses a system that allows the tax payer to present his case and then sending him away with the promise of him getting the verdict of the Board in two to three weeks. This has worked well until this year.

    In another article, I have written about the problem of systematic errors in the value of undeveloped lots and commercial properties across the entire county. I say "systematic" because I believe all un developed lots whether in Cypress Landing or other subdivisions across the county are valued for about double what they have been selling for. I believe most commercial properties are over-valued.

    Several property owners have appeared before the board with the same claim. That claim is their undeveloped lots are valued too high. They have presented comparable sales that took place within the past two years to prove their case. We probably saw sales data on as many as one hundred lots.

    The same thing happened on commercial properties but with fewer examples simply because there are not that many commercial properties.

    The Board of Equalization and Review had its last scheduled meeting for this year on Thursday June 21. The problems with undeveloped lots reared its ugly head again.

    I make no bones about it. I am pushing for another look at all undeveloped lots and another look at commercial properties. I heard some astounding arguments from other commissioners as to why we need o keep these values as high as possible

    Bear in mind this is a public meeting. I am not revealing confidential information.

    Gary Brinn argued that most property owners want their values to be high because it helps them get more money for their property if they sell it.

    Jerry Evans argued the same thing. He and Frankie Waters believe we will do great damage to the Cypress Landing Community if "we allow real estate values to go down."

    All three, Brinn, Waters and Evans believe we have a duty to keep land prices high. The problem with that is that it violates the law that provides for valuing the property at its present market value. It is clearly illegal for the Board to use any other standard and it is very wrong for any board member to try to manipulate the market. The board's duty is to reflect the market.

    Three members of the Board argued that sales prices do not reflect the value of the lots and they are convinced the lots are worth more, so they are valuing them higher. Get that now. They voted to value the lots at what they suppose they are worth, not what they sold for.

    So, what did they do?

    They only addressed undeveloped lot values in Cypress Landing. After considerable discussion about how every lot is different, they voted to value all undeveloped non-waterfront lots in Cypress Landing at $40,000 per lot in spite of the fact that the majority of undeveloped lots in Cypress Landing have sold for between $20,000 and $30,000.

    They gave no consideration to undeveloped lots in the remainder of the County. One person complained that he had, within the last two years, purchased three lots in the eastern part of the county for less than $30,000 each. They are tax valued at $60,000. He got no relief.

    All of this in the face of the law requiring us to use marker valued to set tax values.

    The Board of Adjustment is not empowered to be a market maker. It is required by law to use actual sales prices to make judgments about the values of property. It is supposed to react to the marked after the market has made its decision, not determine what the market the board members feel it should be.

    The only way the County can be a market maker would be for Beaufort County to start buying these lots at what we say they are worth. Beaufort County like the boys in Washington, D. C. are drifting into never-never land.

    The attitude of this board seems to be the same as the Board of Commissioners during the past four years. That is, one of elitism. "We know what is best. We have not been elected, we have been anointed. We are going to do what we want to do. We know what is good for you, we are the government."