State of North Carolina Department of State Treasurer

Transcription

1 RICHARD H. MOORE TREASURER State of North Carolina Department of State Treasurer State and Local Government Finance Division and the Local Government Commission Memorandum #1012 JANICE T. BURKE DEPUTY TREASURER April 15, 2004 TO: FROM: SUBJECT: Officials and Certified Public Accountants T. Vance Holloman, Director Fiscal Management Section Management of Cash and Taxes Counties For the Fiscal Year ended June 30, 2003 This publication provides comparative cash and investment and tax levy information of county governments for the fiscal year ended June 30, As in the past, we have added the county assessment-to-sales ratios and have calculated effective tax rates. (Note: the effective tax rate is calculated by multiplying the county-wide tax rate by the assessment-to-sales ratio.) Providing the effective tax rates should result in a better comparison of tax rates between counties, given those counties are at different points on their revaluation cycles. In addition, the average unit-wide effective tax rates for the last five fiscal years are presented. The statistics provide a range of highest and lowest items within a grouping and the mathematical average. Tax collection percentages and average tax collection percentages are presented for all property, all property other than motor vehicles, and for motor vehicles only. This analysis presents information for the State as a whole and the following population groupings: 100,000 and above; 50,000 to 99,999; 25,000 to 49,999; and 24,999 and below. officials are encouraged to compare their own performances to similar counties and to statewide averages. Such comparisons may identify opportunities for improvement or may indicate improved performances from previous fiscal years. For those counties with below average tax collection rates, collection procedures should be reviewed to determine if more effective means of collection are available. An improvement in tax collection rates provides numerous benefits to counties. It provides more revenues to finance programs, generates additional funds for the investment program, and allows the property tax rate to be lower than it would otherwise have to be. Section 50, Tax Assessment, Billing, and Collection in the North Carolina Department of State Treasurer Policies Manual, provides information on collection procedures. This section is available on our web site at under the state and local government link, then the auditing and reporting line. Please contact Ms. Margo Pope, , if you need to order a hard copy of this section. If you have not ordered a copy of this publication, please contact Ms. Pope. Also, the Institute of Government at the University of North Carolina at Chapel Hill offers courses in tax collection that may benefit tax collectors in carrying out their statutory responsibilities. 325 North Salisbury Street, Raleigh, North Carolina Telephone: (919) Fax: (919) Website: An Equal Opportunity/Affirmative Action Employer

2 Memorandum # 1012 April 15, 2004 Page 2 Given the role assumed in recent years by the counties in billing and collecting motor vehicle taxes for all residents, including those within municipalities, municipal officials should periodically consider consolidating the property tax functions of counties and municipalities. Again Section 50, Tax Assessment, Billing, and Collection, contains a discussion on consolidated property tax functions. In addition, Memorandum #692, Consolidating and Municipal Property Tax Functions and Memorandum #929, Results of Municipal and Survey on Consolidating and Billing of Tax Functions, which discuss joint arrangements utilized by many counties and municipalities, are available from our web site. Consolidating the property tax functions should provide more economical use of equipment, office personnel, supplies, and postage. A single tax billing and collection office would simplify taxpayers efforts to pay and inquire about the status of their taxes. Also, especially for smaller units, a consolidated office should be able to enforce tax collections (attachment and garnishment, levy and foreclosure) at a lower cost. Further, in a cooperative relationship, municipal officials may be able to provide information on delinquent taxpayers that may help collect county taxes due. The statewide and population grouping tax collection percentages over the last five fiscal years are as follows: Average Current Year Tax Collection ages Population Grouping Statewide 96.53% 96.53% 96.44% 96.50% 96.33% 100,000 and Above ,000 to 99, ,000 to 49, ,999 and Below The statewide tax collection percentage for dropped slightly fromthe previous year. The high tax collection percentages over the last five fiscal years are a good indicator of the quality of county financial management; however, in some individual cases there is still room for improvement. An overall trend that can be noted is that tax collection percentages for counties vary according to population, with the largest counties having the highest tax collection percentages. This trend is consistent for the four preceding years and generally continues to be so. For the current year, the tax collection rate for the 25,000 to 49,999 Population group is slightly higher than the next higher population group. Within each population grouping, there may be substantial variation in collection rates, meaning that not all small counties have lower tax collection rates and vice versa. Average Tax Collection ages Population Grouping Excluding Motor Vehicles Motor Vehicles Statewide 97.43% 86.76% 100,000 and Above ,000 to 99, ,000 to 49, ,999 and Below

3 Memorandum # 1012 April 15, 2004 Page 3 The fiscal year was the first year collection rates for motor vehicles and property other than motor vehicles were separately reported. These figures are included in the report because the methods of billing and collecting taxes differ between motor vehicles and other classes of property. The same trend noted for all property is noted for motor vehicle taxes also. Tax collection percentages for counties vary according to population, with the largest counties generally having the highest tax collection percentages. We spoke with tax collectors from those counties that had the higher collection percentages for motor vehicles. Those tax collectors indicated that they send out multiple late notices for vehicle taxes. Some of those counties also aggressively attached the assets and garnished the wages of a delinquent taxpayer. Units that rely solely upon the block upon subsequent year registrations placed with the Division of Motor Vehicles should eventually collect a high percentage of motor vehicle taxes, but their current year collection percentages of motor vehicle taxes will probably be lower. The statewide and population grouping statistics on the unit-wide property tax rates over the last five fiscal years are as follows: Average Unit-Wide Tax Rates (per $100) Population Grouping Statewide $.6591 $.6671 $.6520 $.6639 $ ,000 and Above ,000 to 99, ,000 to 49, ,999 and Below The averages shown above for all five fiscal years are calculated on a dollar-weighted basis. For most counties the tax rate is lower in the fiscal years immediately following revaluation. Tax rates usually increase as a county moves through the revaluation cycle, reaching a peak immediately before revaluation. The overall trend shows a mixture of changes in tax rates with a substantial decrease in the latest year for the 25,000 to 49,999 group. Average Unit-Wide Effective Tax Rates (per $100) Population Grouping Statewide $.5696 $.5787 $.5728 $.5932 $ ,000 and Above ,000 to 99, ,000 to 49, ,999 and Below The above table shows the effective tax rates. The effective tax rate equals the property tax levy divided by the estimated market value of assessed property. The averages in the above table are also dollar weighted. The above table shows a substantial increase in the year with a slight decrease for

4 Memorandum # 1012 April 15, 2004 Page 4 The statistics presented in this report were gathered from various sources. The investment earnings, cash and investments, tax collection rates, and uncollected tax amounts were compiled from the 2003 Annual Financial Information Reports (LGC-36 or AFIR) submitted to the Department of State Treasurer. In some cases, financial information comes from the audited financial statements. The assessed valuation, tax rate, and last year of revaluation for each county were compiled from the Assessed Valuation and Property Tax Levies for the Fiscal Year Ended June 30, 2003 reports (TR-1-01) submitted to the Department of Revenue. The N.C. Department of Revenue calculates the assessment-to-sales ratios annually for each county. This ratio is based on a sample of selected real estate transactions within a county and equals the assessed valuation divided by the actual sales price. The county populations were provided by the Office of State Budget and Management and are estimates as of July 1, The tax rate equivalents and effective tax rates were calculated by the staff of the Department of State Treasurer. The average tax rates in this year s report are calculated on a dollar-weighted average basis. All data included in this report are the most recently available information. If you have any questions concerning this memorandum, please contact John Herron at (919)

5 Governments in North Carolina Cash and Earnings Tax Rate Next Yr of Re- Assessed Tax -to-sales Tax Rate Excluding Motor Vehicles Amount Tax Rate 100,000 and Above Alamance 136,144 $33,177, , / 2009 $9,339,502, $1,021, Buncombe 210,550 58,029, , / ,094,857, ,754, Cabarrus 140,176 55,129,133 1,328, / ,505,730, ,717, Catawba 146,548 93,093,448 2,365, / ,577,580, ,662, Cumberland 305, ,659,809 1,791, / ,824,467, ,048, Davidson 150,799 42,673, , / ,371,378, ,774, Durham 233,548 95,237,273 2,432, / ,474,899, ,452, Forsyth 314,853 68,103,323 1,301, / ,475,349, ,737, Gaston 191,874 48,032, , / ,126,721, ,015, Guilford 428, ,162,614 4,914, / ,894,214, ,323, Iredell 130,362 30,088, , / ,062,717, ,915, Johnston 132,660 47,791, , / ,408,403, ,756, Mecklenburg 734, ,956,858 3,102, / ,004,302, ,507, New Hanover 166, ,966,525 2,064, / ,988,994, ,599, Onslow 152,424 49,400, , / ,670,813, ,645, Orange 122,526 40,085, , / ,475,373, ,086, Pitt 137,901 41,793, , / ,528,652, ,404, Randolph 133,836 38,557, , / ,333,819, , Robeson 125,206 43,170,818 1,101, / ,698,836, ,280, Rowan 132,921 32,233, , / ,113,653, ,891, Union 138,928 98,069,938 2,133, / ,245,798, ,008, Wake 679, ,631,852 9,460, / ,697,496, ,515, Wayne 113,844 34,508, , / ,370,544, ,949, Total $ 2,091,553,548 $ 40,482,427 $ 383,284,109,361 77,927,761 Group Statistics: 100,000 and Above Lowest Highest Average Page 5

6 Governments in North Carolina Cash and Earnings Tax Rate Next Yr of Re- Assessed Tax -to-sales Tax Rate Excluding Motor Vehicles Amount Tax Rate 50,000-99,999 Brunswick 79,054 $69,257, , / 2003 $10,869,982, $3,539, Burke 89,354 16,494, , / ,933,961, ,576, Caldwell 77,926 10,078, , / ,229,803, ,368, Carteret 60,064 16,574, , / ,330,795, ,072, Chatham 52,582 26,294, , / ,613,386, , Cleveland 97,271 33,894, , / ,010,845, ,802, Columbus 54,890 16,101, , / ,510,912, ,967, Craven 91,902 28,841, , / ,401,986, , Duplin 50,612 19,188,788 1,262, / ,652,532, ,365, Edgecombe 54,945 10,866, , / ,446,958, ,099, Franklin 50,326 17,684, , / ,374,165, ,034, Granville 51,540 22,298, , / ,787,692, , Halifax 57,105 23,356, , / ,645,787, , Harnett 96,152 34,188, , / ,709,507, ,858, Haywood 55,114 15,000, , / ,585,590, ,121, Henderson 92,988 20,189, , / ,532,686, ,205, Lenoir 59,294 16,498, , / ,165,272, ,611, Lincoln 66,598 27,042, , / ,535,946, ,034, Moore 77,424 19,309, , / ,456,186, , Nash 89,185 35,582, , / ,155,990, ,307, Rockingham 92,589 43,887,392 1,005, / ,242,274, ,184, Rutherford 63,345 17,460, , / ,882,380, ,068, Sampson 61,768 17,440, , / ,519,747, ,096, Stanly 58,974 17,769, , / ,522,908, ,072, Surry 72,028 14,534, , / ,141,289, ,306, Wilkes 66,660 14,657, , / ,826,595, ,267, Wilson 75,374 32,699, , / ,747,388, ,054, Total $ 637,193,247 $ 13,379,026 $ 119,832,576,358 38,241,194 Group Statistics: 50,000-99,999 Lowest Highest Average Page 6

7 Governments in North Carolina Cash and Earnings Tax Rate Next Yr of Re- Assessed Tax -to-sales Tax Rate Excluding Motor Vehicles Amount Tax Rate 25,000-49,999 Alexander 34,224 $7,221,719 87, / 2007 $1,972,414, $448, Anson 25,358 5,063, , / ,242,774, , Beaufort 45,672 13,445, , / ,270,778, ,467, Bladen 32,656 13,103, , / ,743,751, , Cherokee 25,080 6,492, , / ,374,548, , Dare 32,177 65,405,795 1,986, / ,541,113, , Davie 36,770 17,987, , / ,851,886, , Hoke 36,000 10,772, , / ,275,919, , Jackson 34,132 15,993, , / ,618,148, , Lee 49,810 14,589, , / ,022,898, ,181, Macon 30,936 NR * NR NA 1999 / ,979,408, , Martin 25,082 21,405, , / ,516,184, , McDowell 42,960 8,012, , / ,833,672, , Montgomery 27,282 9,377, , / ,646,159, , Pasquotank 35,816 12,890, , / ,456,734, , Pender 43,135 NR * NR NA 1995 / ,431,084, , Person 36,764 13,851, , / ,020,929, , Richmond 46,721 13,857, , / ,955,228, , Scotland 35,766 8,809, , / ,630,421, , Stokes 45,355 4,543,113 93, / ,460,817, , Transylvania 29,400 30,194, , / ,585,902, , Vance 44,378 5,804,150 75, / ,030,717, ,610, Watauga 42,892 22,984, , / ,298,416, , Yadkin 36,958 8,629, , / ,154,388, , Total $ 330,435,581 $ 6,408,734 $ 60,914,297,207 18,492,822 Group Statistics: 25,000-49,999 Lowest Highest Average Page 7

8 Governments in North Carolina Cash and Earnings Tax Rate Next Yr of Re- Assessed Tax -to-sales Tax Rate Excluding Motor Vehicles Amount Tax Rate Below 25,000 Alleghany 10,860 $538,906 78, / 2007 $1,020,686, $231, Ashe 24,734 7,695, , / ,829,513, , Avery 17,946 8,502,772 84, / ,277,373, , Bertie 19,807 6,378, , / ,329, , Camden 7,328 9,269, , / ,567, , Caswell 23,718 6,075,023 99, / ,067,979, , Chowan 14,304 NR NR NA 1998 / ,623, NR NR NR NR NA Clay 9,216 3,718,922 57, / ,100,453, , Currituck 19,632 57,963,473 1,362, / ,548,717, , Gates 10,708 2,274,324 36, / ,082, , Graham 8,030 2,737,485 32, / ,429, , Greene 19,471 7,210, , / ,408, , Hertford 23,863 3,472,715 57, / ,206, , Hyde 5,846 9,163, , / ,119, , Jones 10,243 7,415, , / ,727, , Madison 19,856 NR * NR NA 1996 / ,030, , Mitchell 15,934 3,197,280 49, / ,084,783, , Northampton 21,773 5,926,777 88, / ,139,215, , Pamlico 13,024 3,372,262 57, / ,964, , Perquimans 11,607 4,174, , / ,355, , Polk 18, ,949 94, / ,587,917, , Swain 13,287 2,853,001 41, / ,008, , Tyrrell 4,170 1,437,746 30, / ,820, , Warren 20,000 7,381, , / ,263,101, , Washington 13,600 4,136,763 62, / ,966, , Yancey 17,944 2,827,825 48, / ,387,867, , Total $ 168,150,870 $ 3,460,829 $ 25,730,248,885 9,763,636 Group Statistics: Below 25,000 Lowest Highest Average Page 8

9 Governments in North Carolina Cash and Earnings Tax Rate Next Yr of Re- Assessed Tax -to-sales Tax Rate Excluding Motor Vehicles Amount Tax Rate All Counties Statewide $ 3,227,333,246 $ 63,731,016 $ 589,761,231,811 $ 144,425,413 Lowest Highest Average Explanation of Column Headings: (1) Amounts are net of unexpended debt proceeds and interest earned thereon. (2) Last year in which all real property was appraised; revaluation was effective on January 1 of that year. Counties are required to revalue property at a minimum of every eight years. Except for revaluations made in year 2003, the year shown for next scheduled general revaluation is the year reported by the county in July, (3) Assessed valuation is based on real property values that were determined as of January 1 in the year of revaluation. This number is adjusted annually for discoveries, abatements, improvements, and any other changes that materially affect real property values. Assessed valuation also includes personal property, which is valued annually on a calendar year basis and titled motor vehicles which are valued as of January 1 preceding the date a new vehicle registration is applied for or a current vehicle registration is renewed. * - Indicated that the tax collection data was taken from the audited financial statements. Page 9