Medicaid, infrastructure needs drive up county property tax rates again

• County-by-county tax rates: HTML (below) | Excel spreadsheet

More than two-thirds of North Carolinians will be paying more in county property taxes in 2007-08, according to the North Carolina Association of County Commissioners’ annual survey of county property tax rates. Rapidly escalating Medicaid expenses and growing infrastructure demands caused by the state’s population increases are the primary budget drivers. Counties are projected to spend $517 million on Medicaid services costs this year, an increase of nearly 22 percent in the last two years. These kinds of dramatic increases are forcing many counties to raise property taxes or cut funding to critical services, which is why county Medicaid relief is so critical.

At least 48 counties have raised property taxes for 2007-08, the largest number of counties with an increase in a single year in at least five years. These counties represent nearly 6 million of the state’s projected 8.86 million-plus residents.*

A 2006 survey by the Department of Public Instruction revealed approximately $9.8 billion of public school capital needs over the next five years. Many counties are also struggling to keep up with the demands for clean water and wastewater treatment capacity caused by the influx of new residents.

“The county Medicaid share is putting a tremendous stress on our ability to meet our citizens’ needs,” said NCACC Executive Director David F. Thompson. “Many counties are struggling to provide schools and clean water because the Medicaid mandate is consuming so much of our local property tax revenues.”

Relieving counties of the Medicaid burden is the No. 1 legislative goal for counties. Many proposals have been discussed at the General Assembly this session. House and Senate leadership, along with representatives of Gov. Mike Easley, have been meeting daily to find a workable and winnable solution.

“We are very appreciative of the hard work that members of the House and Senate, along with staff from Gov. Mike Easley’s office, have put into finding a Medicaid solution,” said Thompson. “As the results of this survey show, counties’ ability to fund vital infrastructure needs is being compromised by this Medicaid burden.”

* The Association used 2006 Provisional County Population Estimates from N.C. State Demographics to determine the percentage of residents. For counties who went through property revaluation this year, the Association used the county’s published revenue neutral rate when calculating any increase for 2007-08. Three counties – Greene, Martin and Sampson – adopted interim budgets while awaiting the state budget.

* Cleveland County merged its countywide school tax rate with its general property tax rate with both rates remaining the same from 2005-06.

Summary
Increases = 29
Revalue & Incr = 21
Revalue Revenue Neutral = 2
Revalue & Decr = 0
Decreases = 3
No change = 45
Interim = 0
Average rate = $0.6509
Average increase = $0.0353
Highest rate = $1.1000
Largest increase = $0.1350
Lowest rate = $0.2600
Largest decrease = $0.0400