Polk County has biggest tax rate cut in state this year

Published 11:33 am Friday, August 14, 2009

Polk set its tax rate at 52 cents per $100 of property valuation, 3 cents below what would have been a &dquo;revenue neutral&dquo; rate with the revaluation.

Other counties that went below the revenue neutral level did so by only a small amount. The next largest rate cut after Polk County was Duplin County at 0.43 cents, according to figures from the North Carolina Association of County Commissioners.

Statewide there were 11 counties that had a revaluation and chose to increase the tax rate above a revenue neutral level, while five counties chose a revenue neutral rate.

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Polk County Manager Ryan Whitson points out that the county was able to budget the 3-cent cut partly because it assumed a little higher tax collection rate than he originally forecasted.

&dquo;Our 09-10 budget is very dependent on a 98.17 percent tax collection rate,&dquo; says Whitson. &dquo;For everyone to have a lower tax rate, everyone has to pay their taxes.&dquo;

Polk County commissioners had considered choosing a revenue neutral tax rate, but some officials and citizens raised objections to a new definition of a revenue neutral rate. The new definition allows counties to calculate a rate that would bring in the same property tax revenue as in the prior fiscal year, and then add a percentage to account for expected growth in the tax base from property improvements. The increase is based on an average for annual increases resulting from new lots and buildings since the last revaluation.

Polk commissioners decided to go with the traditional definition of revenue neutral and forego the increase for property improvements. As a result, the county actually chose a tax cut of 3 cents compared to what it would have had if it was not a revaluation year.

Among counties in North Carolina that did not have a property revaluation this year, 67 had no change in their tax rate, while nine had an increase and three had a decrease.

The N.C. Association of County Commissioners said counties used a variety of approaches to balance budgets this year. Some reduced services or expenditures, some used reserves to avoid cuts, while others cut staff,&bsp; instituted mandatory furloughs, eliminated pay increases, eliminated vacant positions and/or cut hours for department or public libraries.