The North Carolina House on Wednesday gave final approval to a controversial proposal to block some local governments from using new property tax revaluations in 2026. But a companion bill that makes changes to the measure still has a long way to go.
Senate Bill 889 was approved on a 70-42, largely party-line vote and will be sent to Democratic Gov. Josh Stein.
Republicans voted unanimously in favor of S889, while most Democrats voted against it, citing concerns about the negative impacts the legislation could have on affected counties’ finances. Eight or nine counties could be affected if S889 becomes law.
The discussion Wednesday was brief compared to the lengthy, spirited debate that took place Tuesday, when several Guilford County Democrats voiced concerns about the impact they expect S889 to have on county finances.
NC property tax moratorium, on collision course with county budgets, heads for final vote
Rep. Pricey Harrison (D-Guilford) shared some of those concerns again before Wednesday’s final vote.
“Just want to remind you what’s at stake here — $58 million for K-12 funding for Guilford County Schools, reduction in our ability to support workforce preparedness, and there are specific programs that are gonna get hit, including some expansion of our aviation program that’s attracted the aviation industry to Guilford County,” Harrison said.
The bill would also force reductions in public safety and rural fire department funding, she added, and reduce the county’s ability to provide core services to the tune of $10 million to $21 million.
Rep. Amos Quick (D-Guilford) said passage of the bill will do little to resolve the property tax problem.
“It will give an appearance of action that’s really not the action that the taxpayers are asking for,” Quick said.
Quick said S889 will “sow confusion” because Guilford County taxpayers who received bills in February will receive another bill in late summer or early fall. Then, they’ll receive another bill in February 2027, he said.
S889 grew out of concern about rising property taxes that some lawmakers say could force low-income and fixed-income residents to sell their homes.
Rep. John Blust (R-Guilford) spoke in favor of the bill Tuesday during House committee meetings.
“I think it’s incumbent upon this body to try to address the immediate problem while we grapple for solutions to the long-term problem,” Blust said.
If counties are concerned about losing revenue, they can simply raise their tax rates on existing property values to bring in what they need, he said.
Companion bill with changes scheduled for debate next week
Votes on Senate Bill 474, which would change some of the counties subject to the reassessment moratorium and extend the time period taxpayers have to challenge assessments, were moved to next week after an amendment to the bill was approved Wednesday.
Blust, who sponsored the amendment, said it addresses an issue that some counties say could cost them revenue. The amendment postpones for one year any reduction in the value of land owned by public service companies in counties affected by the moratorium.
Guilford County projects it would lose $4.3 million in tax revenue from public service company-owned land if S889 becomes law. The property tax adjustment mechanism brings the assessed value of state-appraised utility properties in line with local real estate market values.
If it’s approved next week, the companion bill would still require Senate approval before going to the governor’s desk.
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