House committee votes to further consider property tax amendment

On March 18, the House Select Committee on Property Tax Reduction and Reform voted in favor of giving further consideration to a bill draft for a constitutional amendment that would require the General Assembly to enact legislation limiting future increases in the property tax levy. The draft remains in the committee, with plans for amendments and another vote on April 15.

“This is really up to the taxpayer to decide whether this is something they would like us to pursue,” said state Rep. Erin Paré, R-Wake, co-chair of the committee. “I just wanted to add one word to this conversation that I think we owe people is a sense of predictability of what they are going to be looking at as far as their personal budgets, their household budgets. And that just hasn’t been happening with these recent tax hikes they have been seeing. And I think that’s a keyword that we need to think about when we talk about whether we want to do this constitutional amendment or not. What’s been happening undermines homeownership, and that’s been articulated on both sides of the aisle in this committee several times.” 

The parameters of a future law are not spelled out in the draft. Those parameters and their limits would be outlined by statutory language later in response to this constitutional mandate, according to the Fiscal Research Division of the General Assembly. The mandate does allow the General Assembly to make exceptions to the limitation on property tax levy increases.

“The House Select Committee on Property Tax Reduction and Reform has advanced a proposal for a constitutional amendment to limit the growth of property tax collections, with a committee vote expected on April 15,” Joseph Harris, fiscal policy analyst for the John Locke Foundation, told the Carolina Journal. “The measure would then require approval from the full General Assembly during the short session before going to voters statewide this November. Upon voter approval, lawmakers are also expected to put forth accompanying legislation that would define how the levy limit would work in practice.”

According to a recent study by Harris, published by the John Locke Foundation, nine out of North Carolina’s 10 largest counties taxed property owners beyond what they would have paid under a levy limit calculated for population and inflation growth, amounting to $2.7 billion beyond this level over the last 10 years. 

“Under a levy limit, the total amount of property tax revenue a local government can collect each year is capped based on factors like inflation and population growth,” continued Harris. “This ensures governments can fund services as costs rise, while placing a ceiling on how quickly the overall tax burden can expand.” 

Several representatives, including state Reps. Eric Ager, D-Buncombe; John Blust, R-Guilford; and Maria Cervania, D-Wake, expressed concerns about educating voters about what the constitutional amendment that will appear on the general election ballot will actually mean and its impact on voters. 

“Putting a uniform number, we might have to look at the uniformity clause, because we are not the same state as we were when this was created,” said Cervania. “We have a lot of smart minds in this committee… I want to take time to work together to make sure we get this right… The decisions we make are going to affect public safety, education, and public health. And that money is going to shift somewhere else.”

State Rep. Jeff Zenger, R-Forsyth, proposes a cap on how much rates can increase each year. Zenger admitted that even his own taxes went up 52%. 

“It concerns me how quickly we will make all of our constituents cut their spending, but I have not heard one single municipality or county say, ‘Hey, we could tighten up,’” said Zenger. “Suddenly, there was no bellyaching a year ago about how much they had, and all of a sudden, they get a 52% increase, and they need every dime. I wonder if the way to maybe do this is to just have a cap… How do we come to a place where it forces municipalities to look at what they are spending on? Because it isn’t all public safety. There is a lot of other stuff in there. And how do we make it so it doesn’t absolutely crush our people when they get these tax bills? I guarantee you, there are people out there who have absolutely panicked when they got that bill last September.” 

State Rep. Julia Howard, R-Davie, co-chair of the committee, emphasized the complexity of the process and stated that she has already spoken to Speaker Hall about extending the committee into next year and that each member will have the opportunity to serve on the future committee should they choose to do so. She stated that this is the beginning of a long and complicated process. 

“Property taxes are out of control,” said House Speaker Destin Hall, R-Caldwell, in a press release. “Families are getting ripped off as some, but by no means all, local governments rake in billions more than inflation and population growth warrant. It’s time for real reform, which is why the House is pursuing solutions like levy limits to stop runaway property tax hikes and protect North Carolina taxpayers. I thank the chairs, led by Rep. Julia Howard, of the House Select Committee on Property Tax Reduction and Reform, for their continued hard work.”

The committee will meet again on April 15, when they plan to vote on the constitutional amendment proposal.

“House committee votes to further consider property tax amendment” was originally published on www.carolinajournal.com.