Polk at bottom of state tax rates

Published 1:12 pm Tuesday, February 1, 2011

Polk County Manager Ryan Whitson said last week he is proud that Polk County is at the bottom fourth of counties in the state regarding tax rate.

“I once heard a General say that he was proud that he graduated at the very top of the bottom third of his class at West Point,” Whitson told commissioners. “I am proud to say that Polk County is about at the top of the bottom fourth of counties with our tax rate.”

Whitson gave an overview of how Polk County ranks in the state concerning its finances during a retreat held on Jan. 24.
Whitson said according to N.C. Department of Revenue data, as of Jan. 1, 2010, there were 75 counties with a higher “effective” tax rate than Polk.

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Polk County’s tax rate is 52 cents per $100 of valuation, shared by the counties of Hyde, Burke and Alamance Counties, who also have a 52-cent tax rate. Polk, Hyde, Burke and Alamance Counties rank 25th through 29th for the lowest tax rate out of North Carolina’s 100 counties. Carteret County ranks first with 23 cents per $100 of valuation.
Scotland County has the highest tax rate in North Carolina at $1.02 per $100 of valuation.

“By the way, preliminary figures for the first half of 2010, based on 48 sales, are showing that our sales ratio is at 93.5 percent, which means that on average those 48 properties sold for 6.5 percent more than their tax value,” Whitson added.

Whitson also reviewed Polk County’s fund balance and debt service percentage compared to other counties.
Using information obtained from the N.C. Department of State Treasurer as of June 2009, the latest figures, Whitson said Polk County had a fund balance of 25.05 percent with 13 percent of the county’s expenditures used to cover debt service.

“For counties our size, the average fund balance was 21.11 percent and the state average was 20.62 percent,” Whitson said.
Polk County’s last audit showed Polk’s fund balance at 33.9 percent, but the county has since paid off a loan and should have a current fund balance around 24 percent, according to Whitson.

Nearby Henderson County had a recent 24.81 percent fund balance and nearby Rutherford County had a recent 23.4 percent fund balance with each county also having a 13 percent of expenditures used to cover debt service.
Other nearby counties show a range of fund balances, including Yancey County with a negative 9 percent fund balance and Transylvania County with a 35.68 percent fund balance.

“Debt, at least the amount that Polk County has had, is a bad thing,” Whitson said. “I hate debt. I am very pleased that in the past four years our debt has dropped from about $25 million to less than $15 million. That trend needs to continue.”

Polk County’s building needs are in good shape also, Whitson said. The county has replaced nine roofs in the past 4 years, the courthouse has been renovated, the jail is receiving updated plumbing, two school expansions have been completed, Stearns Gym has received renovations, the county has a new senior center, a new adult day care center and a new human services facility is currently under construction.

Mental health facilities and waterlines are future needs, Whitson said. A water treatment plant is needed somewhere in the future and the next large infrastructure project may be Lake Adger Dam repairs, Whitson said.

“I do not see Polk County having the need or the permission of the Local Government Commission to secure any more debt in the near future,” said Whitson.

Discussion regarding Whitson’s report included commissioner Tom Pack saying that Polk needs to look at when other counties have done a revaluation of property values because that could affect Polk County’s tax rate ranking.

“We dropped (the tax rate) 16 cents just because of a reval,” Pack said. Maybe some other counties that do a reval this year will drop down there with us.”

Whitson answered that’s why he did what’s called an “effective” tax rate, which put Polk County’s tax rate “effectively” at 45.7 cents as of Jan. 1, 2010.

Pack added that a few years ago the county increased the taxes probably higher than most people wanted, but it’s allowed Polk to do a lot.

In 2006, the county increased taxes from 58.76 cents per $100 of valuation to 68 cents per $100 of valuation. The increase was to help pay for new capital projects, including building the new middle school, recreation park and transfer station. The county’s tax rate dropped to 52 cents per $100 of valuation in 2010 to compensate for increases in property values from the latest property revaluation, which must be done at least every 8 years.

The tax rate has not increased since.