Commissioners postpone revaluation

Burke County commissioners on Tuesday night, as expected, postponed property revaluation for two years.
However, the reason wasn't what many people expected.
It's widely assumed that home prices in Burke County have fallen sharply, as they have in many other parts of the nation. Because market prices largely determine property valuations for tax purposes, the assumption is that a lower tax base would oblige the county commissioners to raise property-tax rates to generate more revenue.
Many elected officials hate to raise taxes at any time, but even more now with unemployment rates around 15 percent and a recession in the Hickory-Lenoir-Morganton metropolitan area entering its fourth year.
As Commissioner Gene Huffman said, only half-jokingly, "If we raise taxes, I might have to wear a bow tie. I'm not going to cut my own throat."
The real problem with revaluation at this time, county officials explained, is how it would redistribute the tax load. If the county revalued property now, they predicted, the burden would shift heavily from industries to home owners.
What's essential to understand is that home prices since 2007 haven't changed much. It's property valuations for industrial facilities in Burke County that would plummet 25 to 50 percent in a revaluation.
Tax administrator Danny Isenhour said his office receives annual state estimates on home values based on actual sales, known as market values. Immediately after a 2007 revaluation, valuations equaled 100 percent of market values. In 2008, the ratio dropped to 96.41 percent; in other words, valuations were about 3.6 percent below market values. In 2009 the ratio was 95 percent. And in 2010, the ratio is back to 100 percent. So, the market value of homes in Burke County taken as a group — individual homes will vary — is just about what they were in 2007.
For some, that's disappointing news. County attorney Redmond Dill said home prices generally went up about 5 percent per year in the past. So, yes, homes have not appreciated in value compared to people's hopes and expectations.
Again, though, the market values haven't plunged far since 2007. The national housing bust simply didn't impact Burke County the way it did some other areas.
Also, a recovery may be under way. As Commissioner Wayne Abele observed, "I don't see anybody selling a house here for the (2007) property valuation."
Isenhour said, "I think it's taking a little while for the wave to hit Burke County, but hopefully, we've reached the bottom."
County Manager Ron Lewis admits he tends to be an optimist, but he said he also sees signs of growth. By his count, businesses since the start of this year have announced about 300 new jobs as a result of expansions.
So, the problem with revaluation now comes back to the industries.
Dill said most of the manufacturing plants sold in Burke County in the past few years have been big, distressed properties or older, outdated ones. All went cheap. The result distorts the reality of market values.
"Industrial values are down, but we don't know how much. We have inadequate data," Dill said. "In order to be fair across the board to the citizens who are struggling" the commissioners should postpone revaluation until there's a clearer picture of plants' market value.
Dill, like the others, said he also sees hints of improvement in the local economy.
"I don't think we should do anything that will impede the growth of the economy," he said.
Commissioner Ruth Ann Suttle asked what other counties are doing.
Isenhour said "one or two" are going ahead with scheduled revaluations, but "most of the others are postponing it for two to four years."
Burke County also has postponed past revaluations — at least three times in the 17 years Isenhour's worked in the tax office, including twice in the past 10 years.
Commissioner Steve Smith moved and the Burke County commissioners unanimously agreed to postpone the revaluation to 2013.
Isenhour and his staff will continue to collect market information based on property sales. In 2012 they will resume work on revaluation. The commissioners could make the revaluations official as of Jan. 1, 2013. Taxes based on new valuations would come due in the 2013-14 fiscal year starting July 1, 2013.