Tax appeal stirs revaluation discontent

State: Case not a precedent
By Vicki Hyatt | Sep 04, 2013
Photo by: Donated photo This photo included in county records is of the home owned by Denny and Debbie King in Canton. The Kings disputed the value the county placed on their home and 3.1 acres during a 2011 reappraisal, and the N.C. Property Tax Commission reduced their value from $205,100 to $172,200.

Part 2 in a 3-part series

While funding for state government primarily comes from income taxes and fees, North Carolina county governments derive the lion’s share of their revenue from property taxes. State law requires counties to revalue property at least every eight years so that it reflects current market value.

Haywood County conducted a mass appraisal to accomplish that in 2011, and a property tax dispute that’s headed to the N.C. Court of Appeals is being cited as evidence that the process is as flawed as one done that same year in Mecklenburg County. At the last county commissioner meeting, several residents called for a do-over in Haywood just as is happening in the Charlotte area.

The revaluation cost was estimated at $750,000, an expense that wouldn't be legally necessary until as late as 2019.

The property tax appeal case at issue is one filed by Denny and Debbie King, whose home and 3.1 acres in Beaverdam were initially valued at $210,900 in the reappraisal. Previously, it was valued for tax purposes at $165,232.

The Kings followed the appeal process open to all taxpayers who dispute the tax value of their property, and the local board of equalization and review reduced the amount to $205,100 based on information presented during a hearing.

Mary Ann Enloe, a past board of equalization chairman, said the amount might have been reduced even more if the board members had been allowed by the Kings to make a site visit to better understand the issues.

The Kings appealed the case to the N.C. Property Tax Commission, arguing that their property value should be reduced by 30 percent, which would bring the value down to $147,630.

Denny King, who is a former county commissioner candidate, said in a recent interview he filed the appeal to make a point for others who also were impacted by a reappraisal that overvalued their property.

“When we went to Raleigh, one of the first things I told the Property Tax Commission is that I’m not coming here about the appraised value of my land. What I’m coming here for is the 30-percent increase on my assessment after the valuation was made on my house,” he said. “The county didn’t have the data to back it up. There was nothing that would justify a 30-percent increase in our neighborhood. That’s what the commission ruled on.”

King’s community in Beaverdam was one where a market adjustment factor of 130 was applied within the neighborhood. During a recent county commission meeting, Tax Administrator David Francis said such factors were used to bring properties in line with sales prices in an area.

Of the 900 or so neighborhoods within the county, some had adjustment factors that lowered values and others were adjusted upward. It is the upward adjustments in 119 neighborhoods that has raised the dander of some in the county.

The state commission’s finding in June lowered the value to $172,200, an amount about halfway between what the county established and what the Kings requested.

The commission’s ruling stated the Kings tended to show that the county tax supervisor used an arbitrary method of valuation and the county‘s assessment substantially exceeded the true value of the property. It’s a ruling the county is appealing to the next level, the N.C. Court of Appeals.

King said he was unsure what aspects of the case he could talk about since it is being appealed.

“I’ve never gone through this, didn’t expect to go through this,” he said. “I do know the commissioners have said if we’re not satisfied with our property tax to appeal. When we appealed to Raleigh and won, I was surprised the county would appeal that decision.”

The county doesn't have financial records on how much was spent appealing the King case — and can't predict what the appeal may cost, said County Finance Officer Julie Davis.

"We pay invoices to attorney offices as they come in, usually monthly if there is any activity in a particular month.  The invoices are not necessarily presented by individual appeal, but, usually, by 'property tax commission appeals' in general," she said.

Process flawed?

Those upset with the county's mass appraisal cite the King case as evidence the overall appraisal process was flawed.

It is a conclusion the N.C. Department of Revenue doesn't support.

"An appeal by an individual property owner speaks only to that specific case," wrote Trevor Johnson, who works in the DOR public affairs office.

In the King case, the decision splitting the difference between the county and the property owner-requested values, the "findings of fact" referred to the Kings' contention their property value should be reduced by 30 percent to recognize the watershed issues associated with the property.

The decision concluded the value of $205,100 did not reflect the true value of the property as of January 2011 and ordered the value be reduced by $32,900, a 16-percent reduction.

Coming Friday: More on how the Haywood and Mecklenburg appraisals compare and the state law addressing the issue.