by Tom Glendinning
Pittsboro, NC – This article will explain some recent changes in tax procedures, collection targets, and general strategy. These explanations are not definitive or necessarily written policy. They are derived form conversations with the Tax Collector and the Tax Supervisor. Some comparisons with other counties are made.
Chatham County has been in the middle of North Carolina counties in tax base value, tax rate, and better than average in collection rate history. To my knowledge, there has not been a hostile departmental collection environment or relationship between tax office and taxpayers. Most personnel in department history have been friendly, accommodating, flexible, and understanding. A reasonable and functional relationship existed. In 2000-2001, the department took on the responsibility of performing data collection in-house for the whole county during the revaluation. This reval produced a sound record of values for real estate. Since 2001, adjustments in value were made during revaluation. Collection rates have been 94%, 95%, 96%, for many years under the previous tax collector, who retired recently. These rates are high among all counties in the state. Regularly, at board of commissioner meetings, a small portion of uncollected taxes are dismissed, written off. The dismissal is a long standing, common practice, based on recommendations from the department, which is familiar with every parcel, owner, and case.
From conversations with the tax collector and the tax supervisor, the author learned that the new collection rate target is one hundred percent (100%.) Cited as examples of this new rate are coastal counties with vacation and recreation properties. A partial survey will follow for comparison. A new position was created. It may provide insight into the departmental attitude. A “delinquent tax collection agent” is sought.
The tax supervisor for many years after Jim Spell, was Kim Horton. She was extremely competent in knowledge of tax law, procedures, and properties. Ms Horton led the in-house revaluation of 1999-2001, lending tax expertise to the procedure, new to the department. Four tax assessment specialists were hired to collect data on approximately 32,000 parcels of Chatham County. Residential properties were valued in-house. Commercial, industrial properties and land values were handled by outside consultants. Data entry teams updated computer records. Review of appeals was performed in 2001.
Since western Chatham had not been revalued often, the largest value increase was felt there. The appeal rate began at twenty percent. After in-house adjustments and conferences, it settled at ten percent, still a high rate. These appeals were adjusted or went before the Board of Equalization and Review. The process, though long, arduous, and expensive, laid the foundation for smoother, future revaluations.
One of the prejudicial agendas was against newcomers (said northerners) and the “rich.” Though “rich” was never defined, it was bad because the speaker’s tone of voice changed while pronouncing the word. Since this prejudice was never publicized as the Democrats did during the recent presidential campaign, these people probably did not request appeals to property values. Northerners, in general, came from areas of high property tax and valuation. So tax bills in Chatham must have seemed like a relief even if property was appraised at high values. The realtors, the builders, and the tax departments all gained in that ruse.
The fault overall in the county process which would have produced more accuracy, was its response during the 2008 market crash and subsequent revaluation in 2009-10. The real estate market fell in most places between twenty-five percent (25%) and fifty percent (50%.) While Chatham was still a retirement and bedroom target community, its values did fall or sales stalled. The commissioners did not demand or accept reduced values and delayed the revaluation. While this delay helped real estate sales, it lacked honesty in stated values, and it saved staff work in entering new data twice. Eventually, values recovered, at a faster rate in Chatham and in North Carolina than in other parts of the country.
Chatham County has a new tax collector and a new tax supervisor. These offices do not come into public view often. They do, however, effect every one of us who own property and pay taxes. They and the department are regulated by state law which can be found in the publication “Machinery Act of North Carolina Annotated.” This manual changes very little and only by amendment to state statute.
Of interest in determining the source of directions, orders, and/or rules for these employees and the department is Article 25, Levy of Taxes and Presumption of Notice, page 277 of the 2015 edition:
“105-348. All interested persons charged with notice of taxes.
All persons who have or who may acquire any interest in any real or personal property that may be or may become subject to lien for taxes are hereby charged with notice that such property is or should be listed for taxation, that taxes are or may become a lien thereon, and that if taxes are not paid the proceedings allowed by law may be taken against such property. This notice shall be conclusively presumed, whether or not such persons have actual notice.
History. 1939, c. 310, s. 1705; 1971, c. 806, s. 1.
Case Notes Cited in Henderson v. Osteen …..(1976) & (1977)”
Note that in the underlined sentence, the word “may” is operative and prominent. The word used is “may,” not “shall.” In other words, forcible collection is a local option, but the state law does not require it. Therefore, if the use of force, or lien, is demanded, that action is ordered by the local county or town board.
The fault in this law is presumed notice. The presumption of notice places the burden of knowledge or awareness on the citizen, not the government. This flaw exists into many if not all levels of governments. It is a false assumption because we, the citizens, are assumed to have all legal, professional, regulatory training plus full knowledge of all laws written, published or passed at all levels of government. Lawyers ran the North Carolina legislature for decades, being the predominant profession elected to that office, house or senate and made sure that the state was held harmless. They have been and are paid to be knowledgeable of the law. The citizens can not be assumed educated in the matters, but, nonetheless, are held responsible.
With this foundation, the understanding of the true origin of local practice is probable. The replacement of the word “may” with the word “must” comes from either the board of commissioners, administrative or tax office staff. Any other reference or act to imply that proper notice has been satisfied is use of intimidation by deception.
The Chatham tax office uses the tool called “garnishment fee” liberally. A garnishment is a legal procedure making a claim on some source of income for the satisfaction of an amount owed, a debt. In this case, a thirty dollar ($30.00) fee is added to the taxpayer’s record, without notice and without filing official and legal garnishment papers.
In state documents describing garnishment, the process requires a court order to prosecute, and notice to the employer to collect. No more than twenty-five percent (25%) of disposable income, with limitations, may be taken.
The law governing the process is under rules of the Department of Labor, Wage and Hour Division. But the specialist there would not answer the questions below.
Question about garnishment (of wages or bank accounts.)
North Carolina Wage Garnishment Law
A court order is required for a party to garnishee wages. It allows collection of debt by taking 25% of disposable income from a paycheck, deducted and sent by the employer.
Does a local government agency require a court order to garnishee, or take, wages or a bank account in payment for delinquent taxes?
Or is it assumed the government is always just and may take as it pleases?
Should it require no court order, is the garnishment fee justified when no legal action was taken?
Fair questions, given that the tax department operates with the full weight of government behind it and may employ force. The only question is whether the taking of a fee without the costs associated with it is legal.
But that practice alone should not stop a liberal. A champion of liberal causes, of giving services, substance, and subsistence to the needy, as long as those expenses are paid with everyone else’s money. Beside the issue of maintaining the level of subsistence so that beneficiaries are living comfortably, the dependency created makes loyal voters among the poor. The true goal becomes obvious when the gift of a trinket swings an election. Within years, the novelty wears off, reality sets in, and the lack of sustainable, respectable living also becomes obvious. But, in the meantime, who paid for the luxuries? Who suffers the losses? Who is hurt by the increased cost taken out in taxation? The poor. The ones who were supposed to be helped by the welfare, gifts, bribes. What good is a phone now if the call goes unanswered by self serving officials?
A tax story
John D. Rockefeller spent summers in Cleveland, where he held large properties surrounding the city, old canal beds, waterways, now called the Emerald Necklace. He and his wife enjoyed the large estate, Forest Hills, overlooking East Cleveland with a view of Lake Erie. They were important contributors to the cultural life of the city and welcomed citizens. The Art Museum and Carnegie Hall, home of the Cleveland Symphony, benefited from their generosity, as did charities.
One summer, Mrs. Rockefeller became ill. She could not be moved to travel back home to New Jersey. They remained there while she was treated and recuperating. Ohio tax law allowed vacation residents to avoid property taxes if the time spent was less than six months. They remained more than six months.
The Cuyahoga County tax collector set his goal of collecting taxes on the Rockefellers’ properties. He resisted numerous pleas. Whether he collected or not is not clear. But Mr. John D. Rockefeller made sure that he would collect no more, and donated all his holdings to the city and county. Forest Hills is now a very nice subdivision. The mean property is a favorite park for resident of the heights. In winter, the long slope down to Euclid Avenue, US Route 20, hosts sledding when there is snow. All very nice, but the millions of dollars of taxes are missing from the county and city treasuries, thanks to the greedy and inflexible attitude of the tax collector and his employers, the county board of commissioners.
Tact and wisdom can pay large dividends. Lack of them can cause large losses.