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Macon finalizes property values

Macon County’s tying up the loose ends on a property revaluation that will likely cause tax hikes for some and breaks for others, and the county’s tax director gave commissioners a heads up that they’ll probably be getting some phone calls over the next few months. 

“There are many different opinions on value, when we do it, why we do it, and how we do it,” Richard Lightner told commissioners at their December meeting. 

The county hasn’t gone through a revaluation since 2007, when property values were a lot higher in the pre-recession market. When values plummeted, the county put off its revaluation, typically done every four years, until now, when it legally couldn’t postpone the reval any longer. If properties were reassessed at substantially lower values, the county budget would either take a huge hit due to decreased tax revenues or it would have to hike the tax rate to make up for lower values. 

Though things are improving, that’s still the situation. The county’s real estate value is 14.5 percent lower under the new valuation than it was in 2007, with a total value decrease of $138 million. 

However, the real estate situation is a lot better than it was four — or even three, two or one — years ago, Lightner said. Finishing the reval now will mean less fluctuation in tax rates and bills than if it had been done earlier. 

“Back in 2010 when you were talking about putting this off, we were hitting bottom,” Lightner told commissioners. “We didn’t have anything. This decision to postpone it has allowed us to get more of a market fix. If you look at the $2 million [property] listings, they’ve doubled in just one year. That’s showing a real strong indicator that the market is rebounding.”

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But when 2015 tax bills go out in January, Macon County homeowners will see some different numbers under payment due. The direction of the changes will depend on the value of the home, where it’s located and how much supply and demand for that type of property have fluctuated.  

While people owning high-end, million-plus-dollar homes might see a decrease in their tax rate, “Those people on average homesteads are going to see less decrease in taxes and more than likely, depending how close they are to the median, they’re going to see an increase,” Lightner said. 

If, that is, commissioners end up doing what they’ve been talking about for the past year and increase the property tax rate enough to keep the county property tax revenue equal to its pre-reval level. 

Currently, the tax rate is 27.9 cents per $100. Maintaining a revenue-neutral county budget would require a rate of 33 cents per $100. That’s the number Lightner used in his calculations when he prepared examples to share with commissioners last week. Lightner detailed what the property tax bill looked like for individual homes before the reval and what it will look like afterward, pending a change in tax rate. Commissioners have not acted to change the tax rate but have seemed favorable to it over the past year.  

“We’ve got the lowest tax rate,” Commission Chairman Kevin Corbin said. “With the reval I think we’ll have the fifth lowest tax rate in the state if we do it revenue-neutral.” 

Though moving the tax rate to 33 cents would mean no overall change in the amount of property tax paid county-wide, individual homeowners would end up paying more or less, because some home values have fluctuated more than others in recent years. Homes whose values dropped substantially — that includes most high-end homes — will end up with lower tax bills, even with the new, higher rate. But homes whose values stayed more stable — modest homes belonging to middle-income families flood this category — will likely come with higher bills. 

Distance from town is also a factor. In-town homes have changed value less than outlying homes. 

“We have an aged population,” explained Lightner. “People want to be close to facilities. Highlands especially, they want to be close to the restaurants and the shops and they don’t want to drive the mountain roads late at night.”

Usually, property revaluations result in higher property tax bills and higher overall revenue for the county without any change in tax rate. This reval is different because the current property values were assigned at the height of a building boom that burst right afterward. 

Commissioners said they don’t want to go eight years without a revaluation again, however. After Lightner’s presentation, they voted unanimously to pass a resolution committing to a four-year revaluation cycle in the future, half the time of the one they’re now exiting. 

“We’ll revisit this in 2019 – or somebody will,” Corbin said.

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