WAKE COUNTY, N.C. (WNCN) — Wake County commissioners have debated whether residents will have to pay more in property taxes and Monday night approved a higher tax increase than what was in the proposed budget.
The budget requires more funding, so leaders are bumping up the tax rate to get more revenue.
The proposed tax rate increase was to be 1.5 cent per $100 of valuation, according to the county manager’s recommendation.
However, Monday night, the board added 0.45 cents more than was recommended, according to a news release.
What does that look like for fiscal year 2023?
This brings the total tax rate to 61.95 cents per $100 of property tax valuation. The owner of a $337,000 home, which is the average assessed home value in Wake County, would pay about $66 more per year compared with fiscal year 2022.
The new tax increase will be 1.95 cents, which will generate $38 million in revenue, Wake County officials said.
CBS 17 crews were getting answers to why that may need to happen if property values are going up.
“Wake County is one of the premier growth counties in the entire country,” local economist Mike Walden said.
Everywhere people look in Wake County, there’s construction.
Whether it’s new office buildings or new homes, more people are coming into the Wake County area.
“As you add more people here, the use of public services goes up,” Walden said. “If you want the quality (to remain) the same, you often times need more people, more infrastructure.”
To do that, there needs to be more money in the county’s pocket.
Walden told CBS 17 that the current property tax rate and the current influx of people coming into the area doesn’t necessarily make up for the record inflation levels.
“Inflation is eroding the property tax revenue collected,” he said.
That’s why county commissioners proposed the property tax rate increase for the first time in three years.
“One question that has been brought up by some homeowners is…’wait a minute, my home has been going up in value, why do they have to raise the rate to get more money?'” Walden said.
The answer is simple: people’s property values are different than property tax values.
“For tax purposes, homeowner’s home values do not change every year,” Walden said. “Every four years, the county does a valuation on your home.”
The last time that happened was in 2020 when the median home price in Wake County was $296,000.
In two years, that price jumped to $158,000.
“If commissioners want more money, more property tax money from your house or my house, they’ll have to raise the rate. Because the value is fixed, it’s the same,” Walden said.
But it’s not permanent.
Commissioners do have the ability to lower property tax rates after the next round of home valuations is completed in 2024.