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12 <br /> 1 was given much respect. He said the taxes are already some of the highest in the state and he <br /> 2 has heard the term revenue neutral and asked the Board to meet that and to also be spending <br /> 3 neutral. He said they need to be spending on what is needed and not what is wanted. He said <br /> 4 there are people going hungry. He said that his money has been spent to buy ink pens with Orange <br /> 5 County information and that he does not think taxpayers will be upset if they do not get a pen. He <br /> 6 said he lives in the rural buffer, and he feels like they have his property and the sign welcoming <br /> 7 people into the area is not needed. <br /> 8 <br /> 9 Chair Bedford said April 301h is the deadline for informal appeals. <br /> 10 <br /> 11 In order to allow all those present an opportunity to hear the Revenue Neutral Tax Rate <br /> 12 presentation, Vice-Chair Hamilton made a motion to move item 7-a next on the agenda. The <br /> 13 motion was seconded by Commissioner Fowler. <br /> 14 <br /> 15 VOTE: UNANIMOUS <br /> 16 <br /> 17 7. Reports <br /> 18 a. Revenue Neutral Tax Rate for FY 2025-26 <br /> 19 The Board reviewed the revenue neutral tax rate calculation for FY 2025-26. <br /> 20 <br /> 21 BACKGROUND: The Tax Administration Department has completed the 2025 revaluation of real <br /> 22 property. The revaluation is intended to adjust property values to reflect market value as of the <br /> 23 appraisal date of January 1, 2025. <br /> 24 <br /> 25 The 2025 revaluation was mandated in 2022 when the County's sales ratio or the comparison <br /> 26 between assessed value and market value dropped below 85%. NCGS 105-286(a)(2) states: <br /> 27 <br /> 28 A county whose population is 75,000 or greater according to the most recent annual <br /> 29 population estimates certified to the Secretary by the State Budget Officer must conduct a <br /> 30 reappraisal of real property when the county's sales assessment ratio determined under G.S. <br /> 31 105-289(h) is less than .85 or greater than 1.15, as indicated on the notice the county <br /> 32 receives under G.S. 105-284. A reappraisal required under this subdivision must become <br /> 33 effective no later than January 1 of the earlier of the following years: <br /> 34 <br /> 35 a. The third year following the year the county received the notice. <br /> 36 b. The eighth year following the year of the county's last reappraisal. <br /> 37 <br /> 38 The sales ratio for 2022 was 0.8197 which was below the standard of 0.85 and triggered a <br /> 39 mandatory revaluation within three years. By 2024, the sales ratio had dropped to 0.6445. <br /> 40 <br /> 41 The 2025 revaluation resulted in a 38.6% increase in the total tax base compared to FY 2024-25, <br /> 42 increasing the total tax base by $9 billion to $32.6 billion. <br /> 43 <br /> 44 Property tax revenues are calculated by applying a property tax rate to the property tax base. If <br /> 45 the tax rate were left unchanged following a revaluation, property tax revenues would <br /> 46 automatically increase as a result of the increased property tax base. However, the State of North <br /> 47 Carolina requires counties to publish a revenue neutral tax rate following a revaluation. The <br /> 48 revenue neutral tax rate is the tax rate that would produce the same amount of revenue that was <br /> 49 generated in the prior year given the new tax base. The revenue neutral tax rate is then adjusted <br /> 50 for the average annual natural growth that occurred since the last revaluation. <br /> 51 <br />