On April 15, hundreds of Orange County residents gathered in downtown Hillsborough to revisit the Sons of Liberty with a ceremonial emptying of bottled tea on the courthouse lawn. It was the latest in a succession of local protests sparked by the 2008 Orange County property revaluations, which, despite the tepid national housing market, raised the average county homes taxable value by nearly 25 percent. Though the Orange County Board of Commissioners has been adamant that it will maintain a revenue neutral tax structure, many homeowners will likely see significant increases in next years tax bill.
That had many of the tea partys attendees steaming. At the rally, hundreds of residents gathered to wave signs, listen to speakers and attack all forms of big government, from the county board all the way up to the bank bailout. Former Raleigh Mayor Tom Fetzer, a candidate for the chairmanship of the state G.O.P., railed against big spenders in Hillsborough, Raleigh and Washington, claiming a need for a new revolution in American government. Former Orange County Commissioner Ben Lloyd, a Democrat, blasted the countys leadership for profligate spending on unnecessary projects which he said led directly to the looming property tax increase.
Where is the money supposed to come from? he said. [Its] coming from the money tree which happens to be your pocketbook.
The Orange Tax Revolt, as the movement is known, started early this year, after the county announced the results of its property revaluations, which occur every four years.
As they have with recent revaluations, properties in the county rose significantly in taxable value. In the past, the Orange County Board of Commissioners has tweaked the property tax rate so most residents wouldnt see a huge jump, but this year, commissioners acknowledge that many will end up paying significantly more.
The issue is, the revenue from other places has collapsed, Commissioner Mike Nelson said. Its sort of a perfect storm, with the revaluation coming at the same time as the recession.
At the Hillsborough protest, Burlington resident Chuck Piper stood on the sidewalk next to Churton Street, wearing a T-shirt that read Shooting your first terrorist Priceless! and waving an anti-tax sign. Piper said he successfully contested Alamance Countys recent revaluation of his property, which had quadrupled its taxable value.
Im just really pissed off that theyre raising taxes, and weve got no say about it, he said. The revolt reached a boil in early March, when a planned meeting in Hillsboroughs Big Barn drew from 1,000 to 1,400 people. Organizers were hoping for a few hundred. Since then, tax revolters have stormed county commissioner meetings and held several more rallies around the county, each drawing a sizeable crowd.
No single person or organization brought the movement to its current place. It started when disparate groups from Carrboro and North Orange County joined forces with Freedom Works, a national, conservative, small-government lobby group, and the county Republican Party to fight the revaluations. It has evolved to join the national tea party movement, which held hundreds of events across the countrywith support from Fox Newson April 15. In Hillsborough, as in the rest of the country, tea party speakers steeped their listeners in the rhetoric of small, responsible government.
Orange County G.O.P. Chairman Bill Knight emceed the event. As the crowd slowly filtered out after the last bottle of tea was emptied, Knight said that the Orange County Commissioners claims of fiscal hardship were overblown, because their budget is packed with unnecessary spending. Knight said Orange Countys tax revenue increased by 27 percent over the five years prior to the recession, but commissioners had simply increased spending, rather than putting money aside for the future.
Even though we had a larger income, theres a deficit, Knight said. They werent concerned about the citizens of Orange County. The revaluation was simply the straw that broke the camels back, because people finally had something in their hands that they could look at.
The movements leaders insist it is a nonpartisan effort focused simply on reining in spending and holding irresponsible leaders accountable.
Its not Democrats, its not Republicans, its both, and its a pox on both their houses! Knight said, in a speech at the April 15 event.
Our mission is lower taxes, less government and more freedom, Freedom Works Director of Federal and State Campaigns Brendan Steinhauser said. Though Freedom Works is headed by former Republican House Majority Leader Dick Armey, Steinhauser said the organization has no problem attacking Republicans. President Bush was a bigger spender than anyone since Lyndon Johnson and the Great Society, he said. When Bush authorized the first round of bailouts, we were loud in opposition to that.
Were finding that the majority of [Orange Countys tax revolters] has never been never been involved with anything remotely political, said Kathy Hartkopf, North Carolina legislative liaison for Freedom Works and an Orange County resident. These are not activists, these are new people whove decided its time for them to have a voice.
But some critics have suggested the revolts frustration with the county, state and federal government is a tempest in a teapot.
Nelson said he checked the voter registration information of about 50 residents who wrote county commissioners e-mails on the tax issue. Only three were Democrats.
Its being ginned up by the Republican Party, he said. The county commissioners have not been hearing from a broad group.
N.C. Rep. Verla Insko, D-Orange, said Orange County conservatives, an electoral minority for more than four decades, have long been frustrated by the left-leaning makeup of their local government.
From [1965] on, weve heard that they werent represented, she said.
In 2006, Orange County voters approved a referendum to combine district voting with their current at-large system and add two commissioners to the board from what is considered to be the more conservative part of the county: northern, rural area. In the 2008 election, two Democrats, were elected.
Tax revolters are particularly incensed at the timing of the 2008 revaluations. Property revaluations were based on data that included the pre-recession years of 2006 and 2007, when real estate was still booming and the housing bubble had yet to pop. In their earliest meetings, protesters pushed for the county to rescind its revaluations and start the process over again, a request that the county denied, saying such a move would be illegal.
The movement also encouraged its members to contest their revaluations with the tax assessors office before the April 1 deadline. Apparently, people were paying attention; Orange County Tax Assessor John Smith reported a fourfold increase in formal complaints over any year on record. Former Chatham County Commissioner Gary Phillips co-founded Weaver Street Realty in Carrboro. Phillips is currently assisting a handful of Orange County residents whose properties soared in value with their negotiations with the tax office. Phillips said he believes the revaluations were largely fair, with some qualifications.
One of the structural problems is, by law, [the county is] required to use the sales of the previous three years in evaluating the worth of properties, Phillips said. Particularly in Chatham County, its out of whack, because those were the biggest three years in history.
Phillips said the chaos of the recession, though it hasnt hurt the Orange County property market as much as other parts of the country, has made revaluations particularly tricky, a dart thrown at a board at close range. Particularly, Phillips said, the high-end home market has completely collapsed, leaving a glut of houses in the $800,000-$1.2 million range on the local market. And large-scale development has dropped by 80 percent from its 2007 level, a factor that could radically alter the potential value of many undeveloped properties.
Smith said he expects for his office to approve 30 percent to 40 percent of residents revaluation complaints, twice the percentage of approvals in a normal year.
I think that there are downward pressures, and the volume of sales has definitely dropped, Smith said. Its certainly possible that [the real estate market] may have peaked, and declined slightly, making accurate tax assessments difficult in some cases.
Still, Smith and Phillips said the majority accurately reflects the increase in local property values, particularly for homes within the Chapel Hill-Carrboro School District, whose values increased by an average of 28 percent. The county outside the school district saw values increase by a 20 percent average.
The Orange County Board of Commissioners has committed itself to a revenue neutral tax rate, meaning the county will not raise taxes to bring in more revenue than last year. However, because of the steep decline in county automobile and retail sales, both of which are usually reliable sources of tax money, property ownersparticularly those whove seen their property values increase substantiallywill likely be making up some of the difference.
Construction is down, home sales are down, were losing sales tax revenue, and were also anticipating the state will withhold public school building money, Orange County Budget Director Donna Coffey said.
The county has an $8.7 million budget shortfall for the 2009-10 fiscal year. County department heads have already been asked to prepare to cut their budgets by at least 10 percent.
To stay revenue neutral, Coffey said the county will likely lower its property tax rate from 99.8 cents per $100 of value to between 84 and 87 cents per $100 of value.
For the minority of county property owners whose taxable property values actually decreased, this will mean a significant drop in their individual tax rate. But at an 86 cent rate, those whose properties appreciated by an average 24 percent will have a 6.5 percent increase on their tax bill. Tax bills for individuals living within the Chapel Hill-Carrboro School District would increase by more than 10 percent.
These numbers had tea party protesters brewing with rage. Lifelong Orange County residents are moving out, because they cant afford to pay their taxes, Lloyd said, at the Hillsborough protest.
Lloyd complained that the county has wasted its money on public parks, open spaces and government expansion.
Commissioner Mike Nelson said he hopes some of the rancor will die down soon, when the board releases the official tax rate.
Im hoping that, for the public, there will be a clearer picture of what that impact is, he said. Carrboro Mayor Mark Chilton has not been active in the tax revolt, but said his own property is increasing in taxable value considerably. Chilton added that he thinks some of the tax revolt frustration is misguided.
All the revolt anger is focused on the county commissioners, he said. But there are plenty of people in the legislature who believe property tax is the most stable and consistent revenue source there is. And we still dont know what they may do to us. Our fate is in their hands. Dont look at us. Look at them.
