The Pineville town council has voted to leave the tax rate at 32 cents per $100 valuation even though the recent countywide re-valuation added $400 million to the property tax value in the town.
That's about 2.5 cents above the revenue neutral rate of 29.4 cents, the rate that would bring in about the same amount of money as this year, but council members say they have no choice. They're not sure exactly how much of the increased value will actually remain once appeals are resolved.
"If we don't keep the rate as it is, we could end up with big financial problems if the property taxes don't come in the way they should," said council member Libby Boatwright.
Town administrator Mike Rose says the majority of the rising property value came from commercial properties, and currently $198 million is under appeal to the county. Rose says it will be at least September before a decision is made and those commercial property owners know how much they will have to pay in town taxes.
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Carolina Place Mall, for example, is appealing a $57 million increase in their tax value.
"We can't base the tax rate on the property value increase because we don't know if it will go up, or be lowered, or end up as something in between," said Rose.
Meanwhile, the council is required by state law to set a tax rate and adopt a 2011-12 budget by June 30. Rose says once the tax rate is set, it must hold for the entire year. It can't be adjusted until next July 1.
Council members weren't happy with their decision, but said it was the best they could do based on the information they have.
"It's a tough decision to keep the rate the same, but we have that unknown. If we lose a lot of commercial value, it could be devastating for the town," said Council Member Jim Eschert.
Rose says a quick town survey estimates some residential property owners will probably see their town tax bill drop as about 25 percent of residential property declined in value. The survey estimates that the tax increase for another 67 percent of town residents will be less than $50 next year.
The council also voted to increase electric rates by 5 percent to help offset the increase in wholesale prices that have been passed on to the town.