Regressive Property Taxes

by Judy Major

Most of us understand that property taxes (about 45% of Madison county revenue) are essential to providing a broad range of valuable public services such as clean drinking water, quality K-12 schools, safety on our streets and services for the elderly, to name a few. Most of us also agree that property taxes should be equitable. That is to say, taxes should be in proportion to the owner’s means.

It’s important to understand that the tax rate aka “mill rate” (the amount paid per $1,000 of property value) is typically the same for all property owners. However, nationwide, including in Madison County, property assessments for the purpose of levying taxes are generally “regressive”.... small plots of land and small or older homes frequently (up to 66% of the time) are OVER-assessed,  whereas large tracts of land and bigger more expensive homes are even more frequently (up to 73% of the time) UNDER-assessed.

What this means to our county, where the demographics have changed significantly over the past 15-20 years, is that often those who can least afford it are bearing a disproportionate share of the tax burden and those with the greatest wealth, many of our newer residents, are paying far less than their “fair share”. Madison County is not accessing the property tax revenue it could and should! The problem lies in how frequently and accurately properties are assessed. 

The last county-wide revaluation completed in 2024 illustrates the problem. Many property owners, dissatisfied with their property assessment, were encouraged to appeal and did so. What was learned through those appeals was that countless assessments were inadequate or grossly incorrect and the assessors' work had been poorly monitored. Three noteworthy examples: 

1. Because of its location and relatively recent transfer of ownership from father to son-in-law, a multiple-acre tract of land, fenced in and inaccessible to the assessors, was assumed to include a home valued at several hundred thousand dollars. There was no home on the property.

2. Another case involved two 100+ year old outbuildings in such poor condition as to be uninsurable. One was listed as a 2,000 sq ft “garage” (actually 400 sq ft) valued at $64,215 and the other, an 800 sq ft (actually 240 sq ft) “barn” (a 3-sided storage shed) valued at $5,247

3. A 3-story, former factory, dramatically remodeled and opened in 2021, housed a spa, fitness center and business offices on the lower level and a total of 18 upscale apartments on the upper floors. The property was originally listed in the 2024 reassessment as Building Type: 2-story warehouse (the 3rd story was added in 1928!)...Occupancy Type: warehouse. Presumably, in that case, the assessors did nothing more than use tax records that had not been updated in years.

   
   

All of the above owners reported the glaring assessment errors and the property values were adjusted appropriately. 

As suggested in this excellent article from Carolina Forward, there are several ways property taxes can be made more “fair”. Most of them require actions to be taken at the state level but part of Fix #3 is definitely within the domain of local/county government. In addition to routine county-wide reassessments every 4 years instead of every 8, Madison County could also follow the example of some counties that at least one trained, full-time assessor on staff whose entire job is to conduct on-site assessments of all new and recently remodeled homes and those that have not had a recent on-site assessment.

Training and continuing education for tax assessors is also key to good quality assessments. Some counties also send a notice, yearly, to all property owners requiring that they list all improvements to their property. Failure to comply results in a 10% late listing penalty or even a misdemeanor charge if the failure is deemed to be willful. 

All of the above steps would come at a cost to county government and ultimately the taxpayer but the additional revenue to be realized would quickly offset the expense. The question is whether our leaders are willing to do what’s fair and in the best, long-term interest of the entire county.