By Jesse Wood
July 11, 2014. The Banner Elk Town Council voted unanimously to raise the property tax by 12 cents to 54 cents per $100 of value on June 9.
In FY 2009-10, the rate was 38 cents per $100 of value and didn’t change again until fiscal 2013-14 when it rose to 42 cents per $100 of value, according to budget ordinances posted on the town’s website. The increase between fiscal years 2009-10 to 2014-15 is 42 percent.
Banner Elk Manager Rick Owen noted in a meeting in May that the increase was needed to balance the budget in light of the revaluation that saw declining property values.
With the property tax increase, Owen said that anybody who saw their property value decline by 22 percent wouldn’t see an increase in their property tax, according to minutes in May.
Owen said that Banner Elk was “looking” at a 22 percent loss in property tax revenue if it remained at 42 cents per $100 valuation.
“Avery County provided Mr. Owen a list of areas which the county had subdivided out in categories in their taxing system. He noted that the older areas in town did not drop in value as much as the newer areas,” according May meeting minutes. “As discussed earlier, the newer home real estate and second home real estate market was inflated due to the market drive. Mr. Owen cited examples. The Highlands, one of the older subdivisions in town, had a 16.21% drop in property value, the Lodges at Elkmont had a 29% drop in property value, the Cottages had a 34% drop, Crooked Creek had a 16% drop, The Farm saw a 29% drop, etc. Land values dropped substantially more than building values.”
Owen added that the town levied $1,049,000 of tax last year and needed to levy the same amount. With the 42 cents per valuation rate, the town would only bring in $819,000.
“There is a difference of $227,000 if we levy the same rate. Each penny of the tax rate generates $19,462. 12 additional cents would generate $233,000,” the minutes read.