At their February retreat, Mecklenburg County commissioners were told they should expect between $30 million and $35 million in total refunds from the review of the much-maligned 2011 revaluation.
Now that total has blossomed to nearly $70 million, said Finance Director Wanda Reeves.
The increase is coming largely from a drop in values for several large commercial real estate properties that created budget shortfalls for the county and city of Charlotte.
Tax bills to those companies were too high and the county must refund them. Their review has come near the end of the state-ordered process.
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Yet those refunds are offset with about $14 million in bills for undervalued properties, lowering the hit to the county to about $45 million. Before the review began in 2013, officials predicted the hit would be about $50 million.
“Because of how the reviews were coming in, we thought maybe it won’t be as much as we originally thought,” said commissioners Chairman Trevor Fuller. “But, at the end of the day, the refunds were higher but we were in the right ballpark with our projections.”
The drop in commercial property value has had the greatest impact on the city of Charlotte, adding to an already sizable budget shortfall. It came shortly after the General Assembly’s repeal of the business privilege license tax. The revaluation has cost the city about $14 million in property taxes and has helped create a roughly $22 million budget gap.
While it has created a problem for the city, the county is able to absorb the increase without having to consider raising property taxes or cutting services.
Fuller said the money was set aside for refunds and that they are being paid over two fiscal years.
Reeves told commissioners that the county’s refunds would be paid through Mecklenburg’s fund balance. “When we collected, it was recorded as revenues and that is where it went in the first place,” she said.
She said refunds will likely be paid through the end of the year.
“I would like for all of this to be over by the end of the year,” Fuller said. “It would mean the 2011 revaluation was with us for four years – which I think is plenty long enough.” Staff Writer Steve Harrison contributed.