- Most people think a higher home value is a good thing, and it can be.

But for many North Carolina homeowners right now, it also means a higher tax bill.

- Most people say that their property values have at least doubled and in some cases even more than doubled.

So I think everyone is kind of in shock over that.

- Thousands of North Carolina homeowners just received a notice in the mail.

And for many of them, it's raising one question.

Can they afford to stay?

♪ - So it's been a very, very hectic morning here.

- Nancy Lenk has lived in her Glenwood home in Greensboro for 16 years.

- He's building a deck for someone.

- Back then, she bought the home for seventy seven thousand dollars.

- And I have just enjoyed so much living here and gardening here and getting to know my neighbors who also really love this neighborhood.

- But in their neighborhood, reappraisal notices just came in the mail and the numbers caught some off guard.

- We have a lot of young people, first time home buyers.

This is their first home.

And all of a sudden, boom, you know, that's a big increase for people who are just starting out.

- For Nancy, her home four years ago was assessed at one hundred three thousand dollars.

The new number nearly two hundred twenty thousand dollars.

That's more than double.

The vacant lot she also owns next door jumped from twenty thousand dollars to thirty five thousand dollars.

- I don't remember any conversations ever before about our property tax since I've lived here.

This just seemed like a really big increase for people.

- This is something that's happening to homeowners across North Carolina.

And for many, the question is no longer just about money.

It's about whether they can afford to stay.

So how did we get here?

Well, it starts with something many homeowners don't realize.

This reappraisal notice, it's not actually your tax bill.

You see, your property tax bill has two parts.

Your home's assessed value and the tax rate set by the local government.

When valuations go up, the tax rate can go down to offset it.

State law requires counties to calculate what's called a revenue neutral tax rate.

This is the rate that would bring in the same total revenue as before.

But counties aren't required to adopt it.

Ben Chavis is the Guilford County tax director.

He says the housing market is driving all of this bidding wars, rising inflation and housing boom that swept the entire country.

- I think it's unprecedented and that we saw values are tax base right now where we're standing.

It's probably going to increase about the real property base is going to increase about 47 percent.

Somewhere in that range, 45, 47 percent.

- That's the total assessed value of all real property in Guilford County.

It's up nearly half in a single cycle.

Chavis has been fielding calls and holding public forums since the notices went out.

- I think the public facing piece is so vitally important to this process because we want to indicate to the public we want to be transparent.

We want to be forthright with this process, helping them to understand what our responsibility is under the general statute.

- In other words, his office just reads the market.

It doesn't set your bill.

That's the job of the board of county commissioners who will set the actual tax rate when they approve a new budget this summer.

A higher valuation doesn't automatically mean you pay more, but if tax rates stay the same, homeowners will feel the increase.

And that's the fight now playing out in city council and county commissioner meetings.

- Guilford County is a great county and we need to keep it that way.

But raising our taxes to the level to match the valuations is really going to hurt the overwhelming vast majority of the residents of Guilford County and Greensboro.

- Homeowners can appeal their valuation.

That deadline in Guilford County is May 15th.

But for many, the bigger question isn't about their number.

It's about what their local government does next.

And that fight has now moved to Raleigh.

State lawmakers are hearing from homeowners who say the system is broken and from local governments who say they can't afford to fix it.

- We've got a lot of questions coming from out of Guilford County as they're starting to receive their property re-evaluation.

My phone and text message is blown off the hook.

- But changing the system isn't as easy as it sounds.

The same revenue homeowners want reduced is the revenue local governments depend on to fund schools, public safety and roads.

- I believe that we have opportunity to tax better, serve better.

But I want to make sure you're not just getting a bill, you are getting some of the best services that you can receive in the country living in North Carolina.

- Lower tax bills could mean less revenue for the services communities rely on.

And now state lawmakers are being asked to decide where that balance should be.

In the meantime, homeowners like Nancy are watching and waiting.

- Because we already have a high eviction rate, for instance, in this county and in this city.

And so, you know, we need to be able to stay in our homes and not lose them because of our property taxes.

- And for thousands of other North Carolina homeowners, that question is now in the hands of their lawmakers and local elected officials.

And joining me in studio to break it all down, we have Representative Erin Paré.

She represents Wake County and is one of the co-chairs of the Select Committee on Property Tax Reduction and Reform.

We also have Mayor Jody McLeod.

He's with the town of Clayton.

That is the fastest growing city in the fastest growing county in North Carolina, Johnston County, obviously.

But, Mayor, welcome to the program.

- Thank you.

- Representative, thanks for being here.

- Thank you for having me.

- We'll start with you.

Tell us a little bit about the Select Committee.

What is its role and why now?

- Right.

So, the House Select Committee on Property Tax Relief and Reform was created to address this problem, which is, I think, at a crisis point for many property taxpayers, particularly seniors who have been living in their homes for 50-some years.

They're in their 80s now, perhaps.

A lot of them are getting pushed out of their homes because they're seeing their assessed value of their property skyrocket in a short period of time, which means their property tax bills have gone up.

They're skyrocketed, you can say, in a short period of time, and they're not able to pay for it.

Or they have to make decisions about not paying for other essential things in their life, like their prescription drugs.

So we as legislators have heard an outpouring of concern from our constituents about this problem.

And so this committee was created so we can bring some control to what is seemingly an out-of-control situation right now.

And it's not just seniors, either.

I mean, we're talking about young families who want to achieve the American dream, purchase their first home, and this is a housing affordability issue for them.

They're not able to purchase a home because of these property taxes that keep going up, up, up, and in a lot of ways are unpredictable.

And renters, even, are affected by this.

I mean, you think you rent a home that's owned by somebody else, but actually those property tax bills get passed down to you, and small businesses are affected by that.

If you lease a property that's owned by somebody else, just like I do in my small business, I can tell you that about 100 percent of the property tax burden is passed down to those who are leasing those properties, which then has an impact on the small business and could affect prices for goods and et cetera.

So I think the property tax committee that we have been working on for the last several months is set out to provide some transparency and some accountability for those local property tax increases, which is a combination, as you know, of the tax rate and the assessed value of the property, but kind of make it a reasonable scenario for most property taxpayers, which I think through policy is what 37 other states have done in this country, and I think North Carolina is looking at doing that, too.

As we also understand that local governments need to be able to pay for essential services that we all rely on and need, there's a good balance there, and we're trying to strike it in the House.

- Matt, what are you hearing from your constituents in the town of Clayton?

- My constituents are very similar to the stories just shared.

You know, we have increased in cost of taxation, but however, people still want to have that quality service that they've come to love and expect.

So for us, you know, concerns as it pertains to rising cost for a municipality, it doesn't matter if that's goods or services, it doesn't -- and as well as like employment costs, like trying to be able to offer qualified employees really fair wages because the market is so -- the employee market is so competitive right now.

- What about -- there's been some conversation about federal funding cuts and the impact on local government budgets.

Does that factor into this conversation at all?

Oh, I think it does.

You know, I think for most municipalities across the state of North Carolina, maybe about 60 percent of their total general fund budget is created through property tax, and then the other is through state and federal.

So to see some decrease in the funding that's coming to North Carolina from state and federal creates a big issue for everyone.

Erin, I know a lot of the -- or some of the conversation in this last committee meeting was about hospitals, nonprofits, who are currently for the most part exempt from these property tax.

Do you anticipate that being any part of the conversation or any change there, something you guys might look at?

- Absolutely.

And I will say that the subject of property tax reform is a huge subject, not something that we can completely fix in the short session coming up, which is only a few months long, but this is going to be a multi-year process of looking at everything property tax in North Carolina, including those exemptions that you're talking about.

I would like to drive home the point, though, that I think that the legislature is interested in something that is reasonable, reasonable reform.

You know, we understand that there are pressures coming down from the federal government.

We understand that these services need to be paid for, and we want to make sure they are paid for.

I think what we're trying to focus in on is a situation like maybe you've seen in Wake County, where you have the county rate, but then you have some municipalities within the county.

And I know in one in particular, over the last 10 years, the average tax bill in this one municipality went up 143 percent, where cumulative inflation over the same period of time is 34 percent.

So it is very reasonable for a property taxpayer to look at that and say, now, what am I getting for this, and why is there such a gap between those two?

And I think that's what we're trying to come to an agreement on with the bipartisan committee that we have, is a reasonable reform where we can have our property tax as close to revenue neutral as possible, so we can take care of those local needs, but also provide some accountability to the taxpayer and some transparency so local governments can express to the taxpayer, hey, we may go beyond revenue neutral, but this is why we're doing it, and we want you to approve it.

- Obviously a lot of solutions being looked at right now.

Mayor, what's your message to homeowners who might call up your office, send you an email, saying that they're concerned that their new potential rate might force them out of the home that they've lived in forever?

- Yes, well, I hear that on so many different socioeconomic levels, that it's a concern for everyone.

And you want to make sure that your hometown is affordable and it's a safe place to live at the same time and has all the quality of life that people are looking for.

I think that's what's contributed to Clayton's high growth, the quality of life, the public safety issue, like all of that.

But trying to let them understand that, you know, if we're going to have to have some sort of tax increase, these are the reasons why, and this is what we're going to do with the money, you know, instead of just saying, well, here's a tax increase, you know.

We got to make sure they understand the purpose of it and the goods and the services that are coming from it.

People want quality services in a municipality.

They want to know the fire department's going to show up when they need them.

They want to know the police department's going to be there.

They want their streets to be safe for when they're walking a baby in a stroller or they're just walking the dogs in the evening.

Like all of those things contribute to our quality of life, you know.

And I think, too, you know, because Johnston, Clayton and Johnston County, Johnston County is so rural and so many farm families are still there that this cost of taxation on their property has gone up tremendously.

And maybe renting that farm for agricultural purposes is not even generating enough money to help pay off the newly established property tax.

- Well, thank you both for your insight on this topic.

We'll be keeping an ear and eye out what's going on in Raleigh.

But thank you both for being here and for taking the time out of your schedule.

Thank you.

- Thank you.

- We appreciate it.

- Thank you.