Here are five recommendations for addressing the most critical structural issues identified
through this research, which included meetings, interviews, and exchanges with assessors
spread across NC and experts involved at all levels of implementing our tax assessments.
1) Increase state accountability and oversight for fair and equitable property
assessments: The Department of Revenue, which provides oversight for county
property taxation, performs its statutory duties well.
But its role – and its capacity for
oversight and accountability – are far too limited. While many states have enough staff
with appraisal expertise to oversee geographical regions in their states, support
counties with their reassessments, or even perform sales ratio studies themselves,
North Carolina law provides a much more limited function for NC DOR, with only a few
staff members overseeing property taxation and even then, in limited ways.
For
example, one of the roles of the NC Department of Revenue is collecting annual random
qualified property sales samples from all 100 NC Counties. These samples help produce
a basic sales ratio study each year and for some counties, provide the only impetus for
gathering qualified sales data.
This information could be utilized to look at or monitor
broad county-wide property assessment equity trends. But NC’s purpose for this study
is not to monitor county assessments for fairness and equity. NCDOR is simply looking
at whether county median sales ratios are too high or too low in order to adjust public
utility assessed values to those trends, or to “equalize” the public utility assessed values
each year.
In fact, NCDOR has very little power in its oversight function. In the smaller counties,
even if their ratios fall far below the standards and their CODs are three times what’s
acceptable, there is no recourse.
If one of the larger county’s
median sales ratios get
outside of the acceptable range (85-115), then that will trigger “mandatory
advancement,” meaning NCDOR will demand that county moves their next
reassessment up to within the next three years. But most larger counties already
perform reassessments every four years, so this is rarely relevant. It also relies solely on
None of these conversations was intended to elicit structural policy issues. And not a single interviewee spoke
negatively about any players. Most found that NC DOR did exactly what it was set up to do, and even went beyond
its required duties when counties asked for support.
According to the range of property tax assessors and property tax professionals I spoke with.
For example, in Tennessee, state agencies are tasked and staffed to perform appraisal ratio studies on all
properties in all counties at least every two years (including sales verification and data analysis). These ratio
studies are used in a variety of ways, including updates/adjustments of values in counties that fall outside of the
acceptable range. No state or local agency in North Carolina has such a charge or the funding to support it. (
https://comptroller.tn.gov/content/dam/cot/pa/documents/manualsandreports/real-estate-appraisal-ratio-
reports/TaxYear2023AppraisalRatioStudyReport.pdf)
Conversations with IAAO staff and NC School of Government professors, spring 2023
Chris McClaughlin, "Sales Assessment Ratios Plummet," Coates-Canon Blog (May 17, 2022), Accessed at:
https://www.sog.unc.edu/blogs/coates-canons/sales-assessment-ratios-plummet.
Machinery Act, 105-284
Supposedly the state will send “strongly worded and encouraging letters” to smaller counties according to
several county assessors.
Population of 75,000 or more.