Property Tax Breaks for Farms in NC: A Development Tool in Need of Reform?
<p></p> <p>$200 million. That’s the estimated property tax revenue North Carolina’s 100 counties defer each year under the state’s present-use value (“PUV”) property tax exclusion program for farms and other favored properties. And by “defer,” I really mean “lose,” because most of those deferred PUV taxes will never be collected.</p> <p>The impact of PUV property on individual county budgets can be substantial. Consider Allegheny County, which in 2010-11 had a total taxable real property base of $1.6 billion. In that same fiscal year the county deferred taxes on $500 million of PUV property, meaning the deferred tax revenue amounted to nearly a third of the county’s entire real property tax revenue.</p> <p>Although none took the same percentage hit as did Allegheny County, nearly twenty other North Carolina counties deferred PUV property value representing at least 10% of their total real property values in 2010. Coming in the midst of the dire economic climate and plummeting revenues from other taxes, a 10% reduction in county tax revenue from real property is no small matter. And don’t forget that North Carolina’s municipalities also lose tax revenue on PUV property.</p> <p>In light of its financial effect on local governments, it seems fair to question whether the PUV program is worth the cost. Maybe not, says national property tax expert Professor Richard England in a recent recent article for the well regarded Lincoln Institute of Land Policy. Prof. England concludes that major PUV reform is needed across the country. Before analyzing whether Prof. England’s proposals are right for North Carolina, here is a [...]</p>
