HENDERSONVILLE – Two bills in the North Carolina General Assembly have the potential to disrupt the city of Hendersonville’s revenue stream if they were to pass, along with those of many other North Carolina localities, city officials said in a May 1 meeting.
House Bill 1089, sponsored by Republican state Rep. Brian Echevarria, would put a statewide referendum on the ballot in November which, if voted up, would amend the state constitution, directing the legislature to put a limit on the amount of property taxes collected by local governments.
Senate Bill 889, sponsored by Republican state Sens. Phil Berger, Brent Jackson and Steve Jarvis, proposes putting a moratorium on property value reappraisals through Fiscal Year 2027.
That would mean the most recent reappraisal put in place before Jan. 1, 2026, would have to stay in place until July 1, 2027, when any new reappraisals done since Jan. 1 could go into effect and then remain in effect until the next scheduled general reappraisal.
“In the long term, we think we would be able to adapt in some form or fashion to (HB 1089). It’s not a great bill for us, but it’s something that we’re prepared to address and move forward,” Assistant City Manager Brian Pahle told City Council May 1.
“The revaluation moratorium is much more detrimental, in the short run,” he said.
Property tax, the only significant locally-controlled source of revenue, makes up around 60% of city General Fund revenue and helps with growing cost demands, like for the purchase of firetrucks, the cost of which has increased by 172% in recent years, he said.
The estimated General Fund revenue total for Fiscal Year 2027 is $32.6 million, with $19.2 million coming from property taxes, Budget and Evaluation Director Adam Murr told Council.
Pahle said that the percent increase of costs for local governments is even more severe than what many consumers are seeing and the bulk of funding for city services rests on property tax.
“If a reval(uation) was delayed, we’d have to delay some service provision, essentially. If they put levy limits in place, we don’t know exactly what that looks like,” Pahle told the Times-News after the meeting.
“Residents across North Carolina are seeing their property values skyrocket after revaluations, and it’s imperative that the General Assembly take a thoughtful approach to address property tax concerns,” Berger said in an April 28 Facebook post referring to Senate Bill 889. “This approach gives residents some certainty on their tax bills while allowing policymakers ample time to put forward proposals to rein in property tax increases.”
Assessed property value in the city has increased from $.7 billion in 1999 to $3.6 billion today, according to a presentation by city staff.
It’s estimated that a revaluation in Fiscal Year 2028 will result in a total valuation of $4.3 billion, an increase of 20% over this year, according to the presentation.
The city plans to have a property tax rate in Fiscal Year 2028 of 50 cents per $100 of valuation, meaning a little over 15% more tax dollars would be collected than were this year, according to the presentation.
It’s not exactly clear what the long-term effects of the bills would be for the city, Pahle told the Times-News.
“We’re just trying to be flexible and make sure we’re ready to adapt if there’s a change, essentially. So, we’re trying to be conservative heading into the future years,” he said.
“It’s a little hard to predict,” Council member Gina Baxter told the Times-News May 1 of the General Assembly bills’ outcome.
“It’s definitely something we’ll keep an eye on and I’m very grateful that we have a city staff that is really intentional about watching these things and planning for contingencies,” she said.
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George Fabe Russell is the Henderson County Reporter for the Hendersonville Times-News. Tips, questions, comments? Email him at GFRussell@gannett.com.
This article originally appeared on Hendersonville Times-News: State legislation could hurt local tax revenue
