Agenda - 10-05-2004-8a - Laserfiche WebLink

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Another aspect of the schedule of values relates to the "Land Use" program as legislated by the State of North Carolina. In the 1970s, many farmers felt that they were being "taxed off their land". To correct this situation, the North Carolina General Assembly created this program, which allows certain qualifying properties to be taxed on their "use value" rather than their market value. The Legislature created a Use Value Advisory Board and gave that Board the responsibility of determining the use value schedules. As a matter of practice, Orange County has always adopted as its use value schedule the average of the high and the low use value rates as determined by this State advisory board. The 2005 schedule of values continues this long-standing practice of employing use values determined by the State. When the 2001 use value schedule is compared to the 2005 use value schedule recormnended by the State advisory board, the open land (agricultural) component is increasing while the forestry and horticultural rates are decreasing on average, Agricultural rates are going from air average 2001 rate of $119 per acre to an average of $326 per acre, Forestry rates are going from an average 2001 rate of $26.3 per acre to an average of $17.3 per acre. Horticulture rates are going from an average 2001 rate of $696 per acre to an average of $585 per acre. The reason for these trends is that the 2001-2002 General Assembly changed the basis upon which agricultural land rates are calculated. Previously, values were based on the growing of corn and soybeans. The new approach uses a basis of capitalized lease rates of farmland. The result of these legislated changes is that some components of the 2005 use values will be significantly greater than in the past. For some properties that have a combination of acreage in the use value program and components not in the program (improvements such as homes, barns, farm buildings, etc.), the vast majority will see higher values offset to some degree and will see overall value increases in the 20 to 25percent range. For Orange County overall, we expect that as with the 2001 revaluation, acreage in the use value program will be taxed, on average, at roughly 6 percent of market value. While the Board of Commissioners will not set new tax rates until ,June 2005, we expect the actual impact to most tax bills from revaluation itself to be minimal (because of the previously mentioned "revenue neutral" approach to Orange County revaluations). The average change in use value- related tax bills for 2005 owing to revaluation -and based on an assumption that current tax rates will be reduced by 10 percent for revenue neutrality -reflects an increase of $12. Using that assumption, approximately 99 percent of a112005 use value based tax bills are projected to change between an increase of $200 and a decrease of $675. Approximately 95 percent of those tax bill changes will likely fall between atr increase of about $150 and a decrease of about $100. Revaluation is a complicated mathematical process. As has always been the case with past quadrennial revaluations, when there are related concerns or questions, the Assessor's Off ce will be available to provide assistance. For the convenience of Orange County citizens, the Orange County website contains answers to the most frequently asked tax and revaluation questions. In addition, beginning in November 2004 notifications will be mailed out inviting civic groups, homeowners associations, realtor groups, etc. to schedule a County representative to present our revaluation video to their organization and to be available for questions and answers afterwards. Beginning also in November, the Assessor will meet with local i°ealtors, sitting down with them as they review the 2005 projected value estimates. During past revaluations, we have used input fi°om these real estate professionals to validate our statistical findings against their experience in the field, and to fine tune our calculations before finalizing new values That sane month, we expect to