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Cary staff report sales-tax gains but warn of property-tax appeals and charitable-exemption losses
Summary
Staff said FY26 sales-tax receipts are running about 5.6% ahead of last year but warned Wake County has several property-value appeals (4 residential, 56 commercial) under review and that six local multifamily properties were granted charitable-housing exemptions, reducing taxable value and costing the town an estimated $270,000 in revenue.
At the April 28 work session, Cary Town staff presented a financial update showing sales-tax distributions tracking ahead of the prior year and flagged elevated property-value appeals and recently granted charitable-housing exemptions as potential near-term risks to property-tax revenue.
A staff slide reviewer (Speaker 10) said the town budgeted $59,000,000 in sales tax for fiscal year 2026 and that distributions through January sales were about 5.6% higher than the comparable period last year; staff described sales-tax forecasting as variable and said the League of Municipalities projects a roughly 3% statewide increase next year, noting Cary has tended to track above that projection.
On property taxes, staff reported collections through March and said Wake County has indicated a rise in both the number and rate of upheld appeals. Staff said Wake County reported four residential appeals under review with a combined assessed value of about $1.8 million and 56 commercial appeals with a combined current assessed value near $946 million. Depending on outcomes and timing, staff estimated potential revenue impacts "in the hundreds of thousands" (roughly $100,000 to $300,000) could materialize if a portion of those appeals are upheld and processed in the town's fiscal horizon.
Staff also reviewed a charitable-housing property-tax exemption based on North Carolina General Statute NCGS 105.278.6 and the 2013 Blue Ridge Housing court decision. According to Wake County filings cited by staff, six multifamily properties in Cary were processed this year under that exemption; the six properties had a total assessed value of about $97.2 million, of which approximately $79.5 million was exempted and $17.7 million remained taxable, which staff estimated reduced town property-tax revenue by roughly $270,000 at current rates.
Staff noted House Bill 1042 (filed 04/23/2026) would modify the charitable-exemption rules and that other legislative options (including proposals referenced in the meeting that might limit revaluation or add a constitutional property-tax limit) were under discussion at the General Assembly. Council members asked for more detail on the makeup of the commercial appeals and whether exemptions were countywide trends; staff said they were monitoring Wake County and could seek further breakdowns.
In other financial items, staff reminded the council of a funded capital project: McCrimmon Parkway pedestrian improvements (traffic signal and crosswalks at Panther Creek High School) with a $1,250,000 budget and an open house next Tuesday. Staff also said council initiated an e-bike review and that the police department is investigating incidents involving noncompliant or motorized vehicles described as e-bikes; staff will return with proposals for regulation or enforcement if appropriate.
The meeting concluded with a motion to move into closed session under GS 143-318.11(a)(3) and (6) to consult with counsel and consider qualifications/appointments; the motion was seconded and carried unanimously.
