Ooooh, scary

Most Durham residents get their "free" weekly delivery of the The Durham News on the driveway or front porch every Saturday morning. They generally do a decent job of portraying the Bull City, and highlighting the positives. (They've also quoted from this blog in the 'NetCrashers column, but not over the past 6 weeks or so. What, did an editor decide the name is too risky for their delicate readers? Or has my stuff gone downhill that quickly? Some questions just answer themselves, i guess.)

This weekend, they've got a front page story in the Real Estate section, which, alas, i'm unable to find online. (If you can locate it, send me the link, OK?) The story, by Nancy Oates, is titled "Durham property owners to see tax values updated." It's got a huge graphic that takes up virtually all of the front page above the fold, and in total the image and text takes up about 75% of the front page. Here's the first two grafs:

Brace yourself, Durham. The tax man cometh, and he's revaluing your property for the first time in seven years.

"It's just going to be a little painful for everybody, " said Leslie Page, owner of West Durham Realty and the president of the Durham Regional Assocation of Realtors.

The article goes on to note that the revaluation is required by NC state law, at least once every eight years, and explains the process by which the county will figure out how much your house has appreciated since the last time they did this in 2001, and how you can go about disputing this new figure, because, after all, everyone knows that their going to come up with some hugely inflated figure in order to increase tax revenues and do whatever bad things it is that governments do with all of your hard earned money.

So, be prepared for the worst, right?

Well, keep reading. Buried in the 17th paragraph, well after the jump to page three, is this little nugget.

Although values will surely rise in most cases, the trend is for the tax rate to drop during revaluation years, Denning (UNC assistant professor of public law) said. In its budget, a local government must state a revenue neutral rate, that is, the tax rate that would bring in the same amount of revenue as the previous year, taking into consideration the higher assessed values.

(emphasis added)

In other words, if the total value of all real property in Durham County is $100 billion (and i'm just pulling that number out of my ass for easy calculation; the actual number is irrelevant right now.) and the property tax rate is 79 cents per $100 of valuation (which it is), the county collects $790 million in property taxes. If the total value of real property rises in the County rises to, let's say, $160 billion (a 60% increase over the past 7 years would not be unthinkable) the amount of money the County has to budget to collect in real property taxes is still $790 million. In order to do that, the county has to present a new property tax rate of 49 cents per $100 of valuation.

Now, if your property value has risen more than the average value, you're going to see a property tax hike. But if you're property has risen less than the average (which we're assuming is 60% county wide. We'll know the actual number sometime next year), you'll see your property taxes go down.

The point, of course, is that key little word "must," highlighted above. You see, it's just as much a part of the law that the tax rate remain "revenue neutral" as it is that values be reassessed every eight years. But if you don't read the entire article very closely, you'd never know it.

So, to summarize, some folks, whose properties have appreciated more than others, are going to pay a bit more for the privilege of living in Durham next year, some, who weren't so fortunate, will pay a bit less. Tax rates will be lower for everyone, which in the long term gives the local governments more flexibility to deal with revenue issues in the future, and makes Durham look a little more attractive to potential newcomers who are comparing tax rates of other Triangle communities when deciding where to live if they're moving here. There will probably be a modest property tax increase next year to cover the cost of bonds already floated, and, depending on whether either of the two proposed new taxes is approved, the property tax might see a more significant rise, but this has nothing to do with the revaluation.

Would have been nice, not to say more accurate, had the N&O told the story in that fashion, rather than the scare mongering that they chose to highlight. Nobody wants to pay taxes, but reassessing property values regularly is one way to keep the tax burden fairly distributed.