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Attachment 6 <br />A•: e N.C. property tax assessments underwater? J Coates' Canons: NC Local Government ... <br />12 <br />. (RSS) <br />. Michael Crowell <br />(RSS) <br />. Richard Ducker <br />RSS) <br />. Robert Joyce <br />(RSS) <br />. Seal Zota RS ) <br />. Shea Dennine <br />(~) <br />. Tyler Mulligan <br />(mss) <br />~~ Print This Post <br />Are N.C. property tax <br />assessments underwater? <br />Thursday, August 12, 2010 <br />By Christopher McLaughlin <br />~: <br />I For two years now we've read story after story about the <br />increasing number of homes that are mortgaged for far <br />more than they are now worth. A recent report by the <br />i N.C. Department of Revenue suggests that for the first <br />time a similar problem may be afflicting property tax <br />• assessments across the state. Last year, real property tax <br />assessments exceeded market value in 31 of North <br />Carolina's 100 counties. These figures suggest that many <br />city and county tax bases are overvalued. What does this <br />mean for local government finances in North Carolina? <br />It means that local governments can no longer count on <br />comfortable increases in their tax bases when they revalue <br />their real property every four or so years. Many counties <br />and towns may actually experience shrinkage in their tax <br />bases after revaluation, anunheard-of occurrence. It <br />means that more local governments may increasingly fund <br />their budget needs with other revenue sources such as the <br />Local option sales tax that may be more volatile and more <br />regressive than the property taxes that have been the <br />bedrock of local governments' revenue for decades. It <br />means that more counties may choose to postpone <br />revaluations for as long as possible in the hope that <br />property values will recover, in the mean time leaving <br />increasingly frustrated taxpayers with increasingly <br />inaccurate assessments. <br />Let's take a closer look at the numbers producing such <br />unusual consequences. Each spring, the N.C. Department <br />of Revenue calculates anassessment-to-sales ratio <br />("ASR") for real property in each county. This ratio <br />represents a comparison of property tax assessments with <br />actual sales prices in that county from the preceding <br />calendar yeaz. If the ratio is less than one, then on average <br />• that.county's property tax assessments were less than the <br />properties' sales prices. In other words, the properties <br />were undervalued for tax purposes. If the ratio is greater <br />~ 2 -~i C' ~~s o-~ ! n~~'r~s ~- <br />http://sogweb.sog.unc.edtl/blogs/localgovt/?p=2978 10/29/2010 <br />