Unfunded state mandate will cost local governments more than money
Buried deep within a 40-page regulatory reform bill that became law last week, a new policy handed down by the Republican-led General Assembly will require tax collectors in every North Carolina county and municipality to install a sign “in a conspicuous manner” on each parcel subject to a lien for delinquent property taxes.
Local government administrators want the provision repealed, saying that will present a host of logistical challenges, cost more money than it recovers and engender ill will from property owners.
“This was sent down from the state,” said Sebastian Cothran, Haywood County’s tax collector. “It’s not my policy, it’s not Haywood County Commissioners’ policy. It’s policy put down on us by the state.”
Property tax bills go out around Sept. 1 each year in Haywood County. Owners of real property who have not paid their taxes by January 6 are subsequently considered delinquent, and the bills begin accruing interest.
State law already stipulates that the names of the delinquents be published in a local newspaper between March 1 and June 1, but Session Law 2024-45 takes that a step further — directing the tax collector’s office to visit each parcel during that same time period and install a sign listing the owner of record, a brief description of the parcel, the principal amount of taxes owed and a statement that warns of penalties up to and including foreclosure.
Property owners who become delinquent still have time to avoid seeing their name in print — and on a sign — if they pay their balance before that publication window, however those who are delinquent but have agreed to extended monthly payment plans will receive no such grace.
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Cothran said that in his county of 62,000 residents, there are usually around 3,000 delinquencies each year.
“We're not even sure how much time it would take per sign,” said Bryant Morehead, Haywood County’s manager. “I mean, if this was a highly urbanized area and you had big subdivisions, you could put those in [more easily].”
Haywood County is not a highly urbanized area; from the Cruso community in the south to Fines Creek in the north, the 554-square mile county features very low population densities outside of its four incorporated municipalities. Morehead doesn’t think the county has the available resources to perform the work and may have to fund an unplanned, dedicated, in-house position, or hire a contractor, or both. Whatever approach the county adopts, the process will take time — weeks or months, maybe — and cost taxpayers money.
The law does not provide funding to counties and municipalities to carry out the task, leaving those who do pay their taxes on the hook for the cost of publicly shaming those who don’t.
“It happens all the time,” Morehead said. “[The General Assembly] shifts costs to us all the time. Sometimes, you see a reason that serves the public. This one strikes me as a little odd. I think we lose money on it. I don't think that it will generate additional revenue.”
Then there’s the logistics of wrangling the signs themselves, which Morehead said the county hasn’t yet priced out. Obviously, each sign would have to contain unique information customized for each parcel, unlike the mass-produced campaign signs that sprout up around the state during election season.
Upon delivery, the signs would have to be sorted, matched to the proper parcel, queued for delivery on a pre-planned route in a dedicated vehicle, installed on the proper parcels and documented through photographs or staff reports.
“And then safety comes in to view,” said Morehead.
In Haywood County, it’s generally considered unwise for a person to go wandering around on private property uninvited, no matter whose authority grants them the right to be there.
Physical access to delinquent parcels might even require written right-of-entry agreements with property owners, as with the cleanup of debris that recently took place on the Pigeon River after devastating flooding in 2021. Although the tax office doesn’t need such approvals for its regular reappraisal visits to private property, Morehead said they’d have to consult with County Attorney Frank Queen to be sure the county is in the clear with the signs.
“Gosh, if we had to have 3,000 right-of-entry agreements, we'd never get it done,” Morehead said.
Therein lies another challenge, according to Cothran.
“On some parcels, it might be impossible if they're ‘landlocked,’” he said, referring to parcels with no public road access or parcels where there is no access other than to walk across someone else’s private property to get there.
The statute is also silent on what happens if — after all that time, money and effort — the property owner removes the sign immediately after it’s installed. Would the tax collector’s office have to go back out and install a new sign? How many times? How would the tax collector know the sign had been removed in the first place? Could the property owner face fines or prosecution for removing a sign?
If the ultimate goal of the law is to decrease delinquencies and increase tax collections, it’s not likely to be effective, Cothran said.
“Probably not very, because I'd say right now, with the newspaper [publishing delinquencies], there's very few people that do anything [in response]. I mean, there’s maybe five to 10 that I remember coming in saying they saw their name in the papers so they’re coming in to pay,” Cothran said. “It's very few. I mean, this may make some people come in, but it's going to make people mad more than anything.”
Due to their size, Haywood County’s incorporated municipalities have fewer delinquencies, but also have smaller staffs with which to implement the policy.
Waynesville’s Tax Collector Sharon Augustini said the town published 290 delinquencies for this past year. Wanda Lurvey, Canton’s tax collector, said she’d published about 200, despite her astonishing 99.33% collection rate. Maggie Valley Tax Collector Leslie Arrington said the town published about a hundred. Clyde Town Administrator Joy Garland said she had 53.
Arrington, Lurvey and Clyde’s Kim Castaneda are all one-woman tax departments.
Jackson County Tax Collector Brandi Henson said her most recent publication included 1,399 delinquencies. Amanda Murajda, tax collector for the town of Sylva, pegged her total at 133.
Abby Braswell, Macon County’s tax administrator, did not return a call from The Smoky Mountain News about her county’s delinquencies, but Franklin Town Manager Amie Owens said she had 189.
Swain County tax collector April Hampton reported 3,423, although some of those were personal property delinquencies, which are not covered by the sign ordinance. In Bryson City, Town Manager Sam Pattillo counted 106.
Outside the mountain west, Rockingham County Manager Lance Metzler said that in his county of 93,000 people, he’d have to install about a thousand signs, even though his county staff — like most local government units — doesn’t have any excess capacity to perform the work.
Metzler supports a repeal of the provision, which was included in a bill originally filed in the Senate in April 2023 that contains a hodge-podge of regulatory reforms, including who needs to be licensed to be a barber, how much training a massage therapist needs and who gets to appoint directors to the boards of state-owned railroads.
Democratic Gov. Roy Cooper did not sign the bill, taking umbrage with the railroad issue, but he didn’t veto it either, so it became law without his signature 10 days after it was presented to him.
The bill was sponsored by Sen. W. Ted Anderson (R-Cleveland), Sen. Steve Jarvis (R-Davidson) and Sen. Carl Ford (R-Rowan), none of whom responded to a message from SMN asking who put the provision in the bill, or why.
Rep. Mark Pless (R-Haywood) also wants to know the answers to those questions and agrees that the cost to local governments isn’t worth the effort.
“When we go back [to Raleigh] my plan is to try to get an understanding of how it happened and why, and then try to get it changed before the sign posting date,” Pless told SMN July 14.
There may not be enough time left in this year’s short session to accomplish that, but when the General Assembly convenes after the New Year, there’s still a small window before tax collectors have to implement the policy in earnest.
“There’s a lot of us in the General Assembly who are former county commissioners and aldermen and mayors,” said Pless, a former Haywood County commissioner himself. “I’m hopeful they’ll be willing to stand up and say ‘no.’”
Rep. Mike Clampitt (R-Swain) said he would also support a repeal effort.
“This was supposed to be a regulatory reform bill, and I’m all about regulatory reform,” Clampitt said. “But this is regulatory overreach.”
Karl Gillespie, the Republican who represents Cherokee, Clay, Graham and Macon counties in the House, is open to looking at the provision for a possible repeal effort, he told SMN.
Gillespie’s fellow Macon County Republican legislator, Sen. Kevin Corbin, said he’s heard from multiple administrators in his sprawling Senate district, which encompasses all of far Western North Carolina, and said they found the policy problematic. Corbin thinks the policy wasn’t vetted very well with the folks charged with implementation.
“We all think this needs to be repealed, and we’re going to do what it takes to get it done,” Corbin said.
