Appeal means lower taxes for some Rowan property owners
Published 12:00 am Wednesday, December 2, 2009
By Jessie Burchette
More than 2,000 farmland property owners will be paying less taxes due to an appeal of the county’s values used in the revaluation that is under way.
James and Marian Rollans, west Rowan property owners and activists, may have filed the first appeal ever of the county’s schedule of values.
Members of the N.C. Property Tax Commission signed an order Jan. 10 recording the settlement reached between the Rollans couple, and the county.
An estimated 2,600 properties qualify for farmland deferrals. Officials have estimated that as much as $500 million in value may be deferred once the revaluation is complete.
Under the order, the county’s value for qualifying woodland will drop from from the proposed rate of $415 to $220 per acre. The value for pasture will drop from the proposed rate of $620 per acres to $385.
Both the new values for pasture and woodland are less than the rates property owners are currently paying.
Crop land or open land values will drop from $760 to $575. The proposed rate for horticulture land will drop from $1,140 per acre to $1,100.
The values apply only to farming operations that qualify under state law.
The Rollans couple filed the appeal after using the Internet to do extensive research on the state tax procedures.
Robert G. Rowland, county assessor, said this is the first appeal of a schedule of values in his 35 years as an appraiser. He said that after commissioners approved the schedule of values, they discovered a law had changed and the values were not correct.
Rowland said he called a meeting for farmers to determine the correct rental figures, which is the mandated basis for farmland-use values. He said he was ready to ask commissioners to change the schedule when the appeal was filed.
“Everything is cleared up now,” Rowland said.
The Rollanses said they believe their actions spurred the changes and have the order issued by the state to support their claim.
“We didn’t know we could appeal,” James Rollans said.
Their first task — getting a copy of the county schedule of values — proved to be one of the toughest parts of the process.
James Rollans said staff in the Assessor’s Office said he was the first to ask to look at the schedule. He ended up writing a check for $86 for a copy of the 172 pages. He said it took 12 days to get it.
“We didn’t know what a schedule of values should look like,” Rollans said.
The couple, who also own property in Iredell County, contacted the assessor’s office there and got a copy almost immediately. The price was $25.
While reading the two schedules, they found several differences, including the land use values. They also found the Iredell schedule to be more user friendly to the public.
“You can not believe how much simpler the Iredell schedule is,” said Marian Rollans.
Since their interest was primarily in the land use values, they contacted the assessors’ offices in Davie, Lincoln and Cabarrus counties. And they got a copy of the state’s 2007 use value manual produced by the N.C. Use-Value Advisory Board.
According to that manual, the value of soybeans and corn produced was for many years the basis of setting values.
Because of drops in production as well as few acres being planted to soybeans and acres, the advisory board determined that rent levels for land in production served as a better method of setting a value.
The state legislature approves rates — a percentage capitalization rate — that is used in the formula to arrive at the per acre value. In 1985, the state mandated a 9 percent figure. In 2002, the state mandated a rate of between 6 and 7 percent.
Rowland said the county inadvertently used the 9 percent figure.
“All of the other other counties used the manual, they had it right,” James Rollans said. “Rowan was the only county that didn’t do it right.”
The couple filed their appeal shortly after the Rowan County Board of Commissioners approved the schedule of values on Nov. 20.
At the November meeting, Rollans called on commissioners to lower the values. He said he reviewed the various farm, timber and horticultural land-use tables and pointed out they averaged a 38 percent increase.
“How was that arrived at,” Rollans asked. “Was the profit from farms up 38 percent?”
There was no direct answer.
Shortly thereafter, Rowland called a meeting with farmers.
A short time later, a staffer from the N.C. Department of Revenue came to Salisbury to serve as a mediator. Brown met with the Rollans couple, Rowland and Barbara McGuire, revaluation director.
Rollans said that although he wanted to appeal other issues in the schedule, he agreed to settle if the farm-use schedule was done appropriately.
Since the state ruling, the couple has attended a meeting of the Farm Bureau board of directors and shared the information on the appeal process and how values are set.
James Rollans said Monday that some of the land-use values for Rowan are still too high. He cited, for example, Iredell, which is also in the process of revaluation, where horticulture land is assessed at $580 per acre, compared to $1,100 in Rowan.
Rollans pointed out that the Rowan schedule initially increased all of the land-use values by 38 percent. He added that he hopes residential and commercial property across the county doesn’t increase by the same 38 percent.