(The Center Square) – Limits on the future increases of property tax levies through a constitutional amendment took a step Wednesday, gaining the approval of a committee in the North Carolina House of Representatives.
The amendment does not specify exactly how the Legislature would limit property tax hikes. It would be determined by legislators if the amendment is approved.
All 170 lawmakers’ seats are on the ballot this year, some having already been decided in the March primaries.
“Over the last decade, homeowners across our state have been confronted with significant increases in property tax bills,” Rep. Brian Echevarria, a Republican from Cabarrus County, told the Select Committee on Property Tax Reduction and Reform. “The trend of increased property tax bills has continued and our people are anxious about it. Our neighbors need our advocacy here.”
It is the Legislature’s duty to put “guardrails” in place to stop spiraling property taxes, he added.
Property tax increases since 2020 have been nearly double the overall rate of inflation, the legislator said.
“The key policy question before us is not whether local governments need revenue – they do, and that is not in dispute,” Echevarria said. “We all know fire trucks do not run on goodwill. We also know that the current property tax structure allows property tax increases to become disconnected from taxpayers’ capacity and predictability. The question this committee is answering is whether North Carolinians should be protected from continual, unsustainable, unpredictable property tax increases.”
Rep. John Blust, R-Guilford, questioned why the proposed amendment doesn’t compel the Legislature to impose a cap on property taxes instead of just limiting future increases.
“That to me is saying it’s always going to be an increase,” he said. “It’s just going to make the increases go a little slower.”
In some counties, the increases “have almost gotten out of control,” the legislator said.
“A cap keeps it from getting even worse,” he said. “I do think we should not be signaling that you can always increase, because that just gets you to a horrible situation slower. I think we need an overall cap, like we have for the income tax, a constitutional cap that says this is the most this municipality or county can milk this one tax source.”
Homeowners who purchased their houses decades ago have property tax bills soaring. The equity in their homes is not liquid – meaning it can be easily withdrawn and spent on something else, Blust said.
Property taxes, on the other hand, have to be paid each year in cash.
“They are being taxed basically on a long-term capital gain, a lot which was inflationary,” Blust said. “We need to think of them first. I understand the counties and municipalities need revenue. But people should be secure in their houses. That’s as basic American Dream as it gets.”
