Caldwell County considering cut in tax rate
County officials are considering lowering the tax rate for the second time in the past two years, as the total value of both real estate and other taxable property across Caldwell County rose by 6.4 percent over the past seven years.
But more than half of the increase in that total value is attributable to the arrival of Google, which is exempt from 80 percent of the taxes that would apply to its property.
That means that cutting the tax rate likely would force the county to take about $1 million from its reserves. The county has about $11 million in reserves, down about $1.5 million from last year.
The thought of relying on such an alternative to plug possible budget shortfalls in coming years is a source of trepidation for some officials.
At a meeting of the Caldwell County Board of Commissioners last Monday, commissioner Randy Church warned, “We can’t continue hitting our tax rate and losing money every year.” Continually drawing down the reserves could lead to a change in the county's credit rating, which would lead to higher interest rates on debt owed by the county.
Under the county's proposed budget, the tax rate would be cut from 63 cents per $100 of value to 62 cents. The current property tax rate is nearly 63 cents, down from about 65 cents two years ago. Every penny of the tax rate represents about half a million dollars in revenue for the county.
Google had an outsized effect on the total change in property values across the county. When the last revaluation was done in 2005, the property off Lynhaven Drive that Google would choose in 2007 was assessed at about $3.5 million; now it is assessed at about $152 million, county tax administrator Monty Woods said.
Because of the way that the search engine giant has skewed the math on the increase in property values, a more accurate picture of the change in values comes from looking at the average increase mainly among residential properties, which is about 2.7 percent, county financial officer Tony Helton said.
As part of the package of incentives that helped lure Google, the county collects only 20 percent of the taxes that otherwise would be assessed on Google's site. Google also is exempt from taxes on other kinds of property, including its computers and other equipment.
The county will collect about $190,000 in real estate taxes from Google this year. At the full tax rate, the company's tax bill would come to more than $950,000.
But even that 20 percent tax bill dwarfs the approximately $22,000 tax bill that would have applied to the property at its pre-Google value.
“From that perspective,” Helton said, “it doesn’t cost the taxpayer to have them here.”