NC House Files Constitutional Amendment Limiting Property Tax Revenue Growth

By Andrew Pomeranz
Carolina Journal

North Carolina House Republicans have formally filed legislation to place a constitutional amendment before voters that would require limits on how much local governments can grow property tax revenues.

House Bill 1089, sponsored by Reps. Echevarria, R-Cabarrus; Howard, R-Davie; Setzer, R-Catawba; Paré, R-Wake would amend the state constitution to direct the General Assembly to enact a cap on property tax growth through a levy limit.

The bill was filed on April 30 and referred to the House Finance Committee. The bill filing follows numerous House committee meetings in recent months examining property tax trends and reform options.

Joseph Harris, fiscal policy analyst for the John Locke Foundation, said the proposal builds on broader GOP efforts to curb rising property taxes.

“House Bill 1089 is the next step in the property tax reform process,” Harris said. “While Senate Bill 889 addresses short-term concerns by delaying reappraisals, this bill begins to tackle the underlying issue by limiting how quickly property tax collections can increase.”

Unlike caps on tax rates or property values, a levy limit restricts overall revenue growth. Even as property values rise, local governments remain limited in the additional revenue they can collect.

“A well-designed limit should account for inflation and population growth so it reflects real economic conditions, and it needs to be comprehensive — otherwise local governments will find ways around it, undermining the goal of providing relief for taxpayers,” said Harris.

The proposals come as lawmakers grapple with evidence that property tax collections have grown significantly in recent years. A recent John Locke Foundation study found that property tax revenues in North Carolina’s 10 largest counties exceeded inflation plus population growth by more than $2.6 billion over the past decade. Average revenue growth was about 62%, compared to a 51% benchmark tied to inflation and population.

The gap was even more pronounced in several fast-growing counties. Wake County’s property tax collections grew by approximately 103%. Cabarrus County’s collections more than doubled during the same period. Both increases far outpaced the benchmark tied to inflation and population growth.

Recent polling suggests public sentiment is increasingly aligned with these concerns. A March Carolina Journal poll found that 76.8% say their property taxes are a burden on their household budget, and 73.2% would support an amendment to the North Carolina Constitution that would require limits on local government property tax increases.

Supporters say the amendment is needed to rein in rapid growth in property tax collections over the past few years. They argue a cap would provide predictability for homeowners and businesses while forcing local governments to better control spending.

Critics have raised concerns that a state-imposed cap could constrain counties’ and municipalities’ ability to fund essential services, including public schools, emergency response, and infrastructure. They also argue the amendment would shift power away from locally elected officials and toward the General Assembly.

Constitutional amendments in North Carolina require approval from three-fifths of both the House and Senate before appearing on the ballot. If HB 1089 clears that threshold, voters statewide would have the final say in 2026.

If approved by voters, the amendment would require lawmakers to enact legislation establishing the cap.