Locke: Property Tax Levy Limit Could Have Saved NC Taxpayers $5.9 Billion 

By Colin Tierney
Carolina Journal

North Carolina property taxpayers could have saved $5.9 billion over the past five years if county property tax levy growth had been limited to inflation plus population growth, according to a new John Locke Foundation model released Monday. 

Under the model, county property tax levies would have been lower in 98 of North Carolina’s 100 counties from fiscal year 2021-22 through fiscal year 2025-26. In some counties, property taxpayers could have saved as much as 29% over the five-year period.

Locke, publisher of the Carolina Journal, also debuted a tool Monday that allows users to enter their address and estimate how much lower their county property tax bill could have been this year if the modeled levy limit had been in place for the past five years. 

The research comes less than five weeks before North Carolina voters decide whether to amend the state constitution to “require limits on property tax increases by local governments.” 

If approved Nov. 3, the amendment would require the General Assembly to enact laws limiting how much local property tax levies may increase. The amendment does not establish a specific levy limit formula and allows lawmakers to include exceptions. 

Lawmakers have discussed tying a future levy limit to inflation and population growth, but they will determine the exact formula through legislation if voters approve the amendment. Locke’s model uses an inflation-plus-population formula. 

State law generally caps county property tax rates at $1.50 per $100 of assessed property value. It does not, however, cap property tax levies, which are the total amount of property tax revenue local governments collect. When property values rise, local governments can increase property tax levies without increasing property tax rates. 

Brian Balfour, senior vice president of research at the John Locke Foundation, said a property tax levy limit could protect taxpayers from sharp property tax bill increases while still allowing local governments to increase revenue to provide services as populations grow and costs rise. 

“Establishing limits on property tax levies will protect homeowners from surprise hikes on their property tax bills, making it easier for them to afford to stay in their homes,” Balfour said in a statement to Carolina Journal. “Counties already exercising fiscal restraint, of which there are plenty, won’t be affected; it will be those counties engaging in reckless spending at the expense of their taxpayers that will be reined in.” 

The North Carolina Association of County Commissioners opposed HB 1089, the bill that put the amendment on the ballot, as it moved through the General Assembly earlier this year. 

The association has noted that approving the amendment would not, by itself, lower anyone’s property tax bill. Instead, the amendment’s impact on property taxpayers and local governments would ultimately depend on the exact levy limit lawmakers enact if voters approve it. 

“Our concern is that a levy limit set too strictly could constrain county budgets and reduce local flexibility,” the association said in a statement to Carolina Journal. “Our goal is to ensure that counties can continue to provide the services residents count on while remaining accountable to the people who elect their commissioners.” 

Recent Carolina Journal polls found widespread concern about property taxes and majority support for the proposed amendment. In March, 76.8% of likely North Carolina voters said property taxes were a burden on their household budgets. In September, 65.6% said they supported the constitutional amendment, while 21.2% opposed it and 13.2% were unsure. 

In-person early voting begins Thursday, Oct. 15, and runs through 3pm Saturday, Oct. 31. Election Day is Tuesday, Nov. 3.