Smirlock letter: Perquimans' tax rate rising more than 2 cents

Perquimans’ tax rate rising more than 2 cents in 2024-25 budget

On June 17th, the Perquimans County Board of Commissioners approved the county’s annual budget ordinance. The budget presentation showed an effective tax rate increase from 49.7 cents per $100 of property value, to 52 cents per $100. This would seem to be a 4.5% increase in property taxes. A deeper dive shows otherwise.

This year, the county conducted a property assessment revaluation, which occurs every eight years. The county takes this into account when they decide the new tax rate for the new budget. The county recently announced that total property value increased by 39.69% from last year.

Under state law, the county must present certain financial information to the public when proposing a new budget, including what is known as a “revenue neutral” rate. A revenue-neutral tax rate is the rate that raises exactly the same amount of revenue as the previous tax rate using the current property valuation. There is also consideration for year-to-year growth.

Last year’s tax rate was 64 cents. If there were no growth at all, then the revenue-neutral rate should be 39.69% less, which is 45.8 cents. The only way to account for the difference in the county’s number would be because of growth.

Let’s look at this growth calculation. In reviewing the county’s budgets for the past eight years, there has been a year-to-year average growth of 1.6%. This would only bring the revenue-neutral rate to 46.6 cents. In order to get to the county’s figure of 49.7 cents, there would have to have been an average growth of over 8.5% every year for eight years!

I presented these facts to the Board of Commissioners during the public hearing on June 17th. The county manager would only say that they used the state-mandated formula and would not comment further.

The revenue-neutral rate of 46.6 cents that I calculated compared with the new rate of 52 cents shows that taxes will increase 11.5% this year. This is one of the largest tax increases in county history. This is also just an average increase. If your assessment rose more than 40%, your own tax rate increase is even higher.

Decide for yourself. This is not just my two cents. It’s everyone’s.

RONALD SMIRLOCK

Hertford