Mecklenburg taxpayers whose homes or other properties were overvalued two years ago would receive refunds with interest under new state bills designed to fix problems in the countys 2011 revaluation.
But the legislation also would require the county to send new bills to anyone with property that was improperly appraised too low. No interest would be owed on the back taxes.
The bills filed jointly Monday in the state House and Senate follow many months of calls by some residents and leaders for the county to fix the flawed revaluation.
Critics of the process have said any taxpayers who paid too much on incorrect values should get their money back. But county officials have said current state law doesnt give them the authority to issue refunds.
The proposed state legislation would remove that stumbling block by making any new values applied to properties retroactive to Jan. 1, 2011. Bill sponsors said they worked with professors and other experts to ensure the legislation would be constitutional.
Still, even if the bills are approved, changes to tax values wont occur right away.
The proposed bills call on the county to update its property records and conduct a new revaluation within 18 months. A bill sponsor previously said that cleaning up the property records could delay refunds for two to three years.
The county plans to launch a website this month so people can point out errors in the property records. Meanwhile, Mecklenburgs interim assessor said the county may have to add nearly 60 more appraisers, or spend up to $9 million to contract the work, to comply with the bills requirements for doing a new revaluation.
Sen. Jeff Tarte, one of a half-dozen bipartisan co-sponsors of the state legislation, said leaders have worked to ensure that every property owner in Mecklenburg County is entitled to and will get a fair and accurate property value.
But while the prospect of refunds will be welcome news to some taxpayers, the legislation could upset those who would be required to pay back taxes.
Officials said that couldnt be avoided.
The constitution requires that everyone be treated the same and fairly, said Rep. Bill Brawley. If they were undervalued in error that error needs to be corrected as well.
Cornelius native Bob Deaton was among the homeowners who long challenged the 2011 revaluation. He is still appealing his homes value, which he said increased his taxes by nearly $4,000.
Deaton said he knew it would be a long battle to get the revaluation fixed.
Very early, we understood that it was not something that the legislature normally got into, Deaton said. But we just had to keep pushing and raising the question, Are you sure you cant do something? And here we are.
The 2011 revaluation was Mecklenburgs first in eight years and came as the residential and commercial markets were still in flux after the recession. At the time, the Assessors Office said it was continuously slashing values on many properties to account for changes in the market.
Still, complaints about the new values began popping up quickly after the county mailed new values in spring 2011. More than 41,000 appeals were filed contesting values.
County officials initially defended the revaluation. But as complaints grew in the past year, commissioners agreed to bring in an outside firm to review the appraisals.
That firm, Pearsons Appraisal Service, found that 49 of 151 randomly-picked neighborhoods in the county had at least minor flaws. Of those, 15 had major issues. Problems also were found in some areas that saw the largest increase in land values.
The Pearsons review did not specify how many of the neighborhoods had been overvalued or undervalued. The county has since hired the firm to do a broader study of the rest of the county.
Updating property records
A major component of the revaluation bill would require the county to update its database that has details on parcels such as the size of a home and the number of bathrooms and bedrooms.
In its initial review, Pearsons found that it had been 17 years since the county had performed on-site inspections on all parcels, though industry standards recommend they occur every four to six years. The firm said it believed inspections would be necessary before any future revaluations to ensure the accuracy of the new appraisals.
Last month, Tarte said he had been told that 40 percent of the countys property data was corrupt.
County staff is working to figure out how much of the database may be wrong. But General Manager Bobbie Shields said that the entire database is not outdated because the county goes out each year to look at properties where there is new construction, such as renovations.
Shields, who is the countys interim assessor, said older properties that have not had any renovations may not have been visited by staff over the years. Still, he said the county has a system of considering the depreciation of structures.
Property owners are currently able to request changes to their property records. But the county is working with Pearsons on a website to make it easier to point out errors.
Shields said the site, which officials hope to make available in the next two weeks, will share more data that county appraisers use when setting values. If someone points out an error in a property, an appraiser will be sent to visit the site before any changes are finalized, he said.
The new state legislation does not give the county any additional money to update the property records or conduct the new revaluation.
Commissioner Karen Bentley said the issue with the revaluations were not new, and she expects staff will work to understand what the cost implications of the new legislation would be.
Figuring out how to pay for the work likely will be part of 2013-14 budget discussions later this spring unless commissioners want to act sooner.
Another piece of the bill would require the county to significantly increase the number of appraisers it has before conducting a new revaluation, or allow it to contract with an outside firm.
Currently, the county has 26 appraisers. But the legislation calls on having one appraiser for every 4,250 parcels in the county.
To meet that benchmark, Shields said the county may have to add 58 appraisers, which could cost $4.5 million. He said hiring a private company could cost $9 million based on the current rate it is paying Pearsons for its work.
Shields said officials still have more questions about the new legislation. He said theyd welcome the chance to discuss the bill with lawmakers.
The state bills are expected to be discussed in the coming days by House and Senate committees before moving to the full chambers. Brawley said the bills could come up for a vote late next week, and would need to be signed by the governor to become official.