In a tough economy, financially-strapped counties and municipalities look to raising taxes as a means to keep their revenues on an even keel with their expenditures.
For rural Eastern North Carolina with its acres of agricultural land, a significant amount of revenue is lost because of the present-use value program.
The N.C. General Statutes allow owners of agricultural property to apply for a present-use value. If accepted, those property owners are given a deferment of their property value, “which lowers the value of property from market value to present-use value,” Greene County Tax Administrator Becky Sutton said.
With Greene County’s fund balance below the minimum 8 percent, few new businesses and no major industry, its Board of Commissioners have agreed its tax rate of .756 per $100 of property value is certain to be increased in July.
A large portion of land in the county is dedicated to agricultural use and much of it is taxed at a deferred value.
Of the nearly $816.65 million of gross real estate value, nearly $61.4 million of value was deferred because of agricultural purposes. That equates to $463,912 not being collected because of present-use value.
In addition, there are exemptions for the elderly, disabled and veterans amounting to more than $17.06 million of value.
In Jones County, there were 107,544 acres, or 1,270 parcels, in the present-use value program a least a year ago, Jones’ tax administrator, Wayne Vanderford, said.
The county deferred more than $88.82 million of value for real estate, which amounted to $710,573 of un-collectable taxes.
“It’s a lot of money being deferred in the county,” Vanderford said.
Lenoir County could not provide present-use figures on Monday, but Tax Administrator Darrell Parrish said Lenoir County has a large amount of deferred real estate property, as well.
Sutton said the state adopts a present-use rate each year, based on an annual study.
“They also adopt a schedule of values,” she said, “which is the rate per acre. The Department of Revenue makes a recommendation to every county.”
Each county’s rate is determined by its revaluation date.
“We have always chosen to go along with their recommendation,” Sutton said, “because they have done a study and have something to support it.”
The rates for properties that have been approved for the present-use value program depend on whether it is used for timber or cleared for agriculture. There are four rates for cleared land and five rates for woodland, depending on the soil quality.
“I think people need to understand it’s a complicated problem we’re facing,” said Robert Masters, owner of Carolina Properties, a revolving loan company.
Masters has been a longtime advocate of increasing economic development.
When Greene County eliminated Chris Roberson’s position as economic developer and assistant county manager in June, Masters said that was exactly what they shouldn’t have done.
“What is the very first thing that they cut? Economic development,” he said about Greene commissioners. “They say economic development is their priority. They say one thing, and do another.”
Sutton said the current market value for cleared farmland that is not approved for present-use is valued from $2,500 to $3,500 an acre in Greene County. Approved farmland — that which is used for agricultural purposes and been approved for the present-use value program — is valued from $40 to $1,150 per acre.
Greene’s market value for woodland is $900 to $1,200 an acre, compared with $40 to $325 per acre for present-used valued forestry used for timber.
“When someone’s not paying,” Vanderford said, “someone else has to pick up the load.”
That someone else is the property owner who pays the current market value tax rate.
Besides present-use value, there are tax exemptions, which include pollution-abatement equipment, and alternative energy uses such as solar farms.
“If you did away with all our tax exemptions,” Vanderford said, “your tax rate could be lower.
Masters said if economic development is proactive, that too could lower the tax rate.
Margaret Fisher can be reached at 252-559-1082 or Margaret.Fisher@Kinston.com. Follow her on Twitter @MargaretFishr.
Current area property tax rates per $100 of property value:
Lenoir County .80
Jones County .80
Greene County .756
Wayne County .7025
Bertie County .78
Wilson County .73
Pitt County .68