Charlotte homeowners could face triple-whammy on their tax bill

That will almost certainly be coming to an end. In 2019, taxpayers are in line to face a triple-whammy on their government bill.

Both the city of Charlotte and Mecklenburg County are weighing a significant tax increase as they work through their budgets this spring.

At the same time, Mecklenburg’s first real estate revaluation in eight years is coming to a close, with new values to go into effect next year. Homes could appraise as much as 50 percent higher, with commercial properties appreciating even more.

Both the city and county could then choose to lower tax rates — but that’s far from a guarantee.

[Agenda story: Home appraisals underway for what could be a significant property tax increase in 2019]

A quick reminder of how property taxes work

Both cities and counties in North Carolina primarily make their money through property taxes, where all real estate owners pay a certain percentage of the value of their holdings each year.

For some reason, this is generally expressed as cents on $100 of valuation.

Charlotte’s current tax rate is 47.78 cents per $100 of valuation. The city pays for things like police, fire, housing, solid waste, economic development, street lights and transportation.

Mecklenburg County’s rate is 81.57 cents per $100. The county pays for things like school construction, teacher pay supplements, health, parks, libraries, utilities and jails.

The average home price in Charlotte is around $250,000. So somebody who owns that house currently pays $1,194.50 to the city and $2,039.25 to the county.

Charlotte residents pay both taxes. Towns like Matthews and Huntersville also have their own tax rates, and people who live in the unincorporated part of the county pay only the Mecklenburg County tax.

City of Charlotte’s plan

Earlier this month, City Manager Marcus Jones proposed a budget that would raise taxes by 1 cent per $100 valuation. That would add up to an additional $25 per year for our example of somebody owning a $250,000 home.

The additional money would help give police officers a significant raise and bump up spending on affordable housing.

[Agenda story: Pay raises for police, more affordable housing and a tax increase all in Charlotte’s proposed budget]

Mecklenburg County’s plan

County Manager Dena Diorio also proposed a tax increase — of 0.75 cents per $100 — in her recommended budget released this week.

This would add about $18.75 to our hypothetical homeowner’s annual bill.

Diorio would like to use the additional money primarily to increase funding for pre-K programs. The proposed budget would use $9.6 million to open up 33 new classrooms for 4-year-olds.

[Agenda story: Mecklenburg County is considering a $77 million investment in public preschool. Here’s how it would work]

Charlotte-Mecklenburg Schools would get about $29 million more, a 6 percent increase from the previous year.

About $6 million would also go to merit raises for county employees.

What could next year’s tax bill look like?

Both the City Council and county Board of Commissioners must still approve the recommended tax increases.

They’ll receive some opposition, but the majorities of both boards appear open to tax increases. The general tenor is that the elected officials believe the investments outlined in both budgets are worth the additional expense.

At current levels, somebody with a $250,000 home would pay $43.75 more on their tax bill — bringing the total to $3,277.50.

But that is before taking into account the property tax revaluation. What if that $250,000 home is now judged to be worth $375,000?

Without a lowered tax rate, that bill could very well be $4,919 — a $1,700 increase.

Homeowners will find out their new values in early 2019. This time next year, elected officials will weigh the tax rate again. The new bills would go out in fall 2019.

This is the math that homeowners and our city’s leaders will be weighing for the next year.