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Union County midyear budget stable, officials warn revaluation shifted tax burden to towns
Summary
County budget staff told commissioners revenues and expenses are on pace for FY26, but the property revaluation will shift sales‑tax distributions and perceived tax increases to municipalities; staff said 13 towns went above the revenue‑neutral mark and urged clearer public communication.
Jason May, Union County’s director of budget and grants management, told the Board of Commissioners that midyear general‑fund revenues are tracking at or above budget and expenses are at or below expectations, leaving the county ‘‘confident in meeting our budget number.’’ May said vehicle valuation increases that drove higher ad valorem receipts during COVID have largely normalized and major revenue areas — property, sales and state/federal reimbursements — show no immediate shortfall.
The board spent the bulk of the discussion on how the state‑mandated revaluation will change sales‑tax distributions for FY27. Staff explained that sales tax distributions next fiscal year will be computed using the new revaluation data, and that municipalities that did not remain revenue neutral will capture a larger share of growth. County staff said 13 municipalities went above the revenue‑neutral calculation this cycle, and two went above their prior tax rate, a change that reduces the county’s share of organic sales‑tax growth.
Commissioners and staff discussed resident confusion about why some taxpayers see larger bills even when county leadership says it held the rate ‘‘revenue neutral.’’ Tax staff said revenue‑neutral is a statutory method tied to the change in assessed values and that published municipal decisions and public meetings should have reflected those calculations; staff encouraged jurisdictions to improve public messaging so residents understand how valuation and local rate choices combine to affect individual bills.
Why it matters: The revaluation’s distributional effects can look like a county tax increase to residents even when the county’s adopted rate does not change. County officials framed the change as a communication and coordination problem between county tax staff and municipal budgets, and said they will continue outreach to towns and the public as FY27 planning proceeds.
What’s next: Staff will finalize FY27 revenue projections and return during the budget cycle with recommended assumptions for property and sales tax growth, and with outreach materials municipalities can use to explain revenue‑neutral calculations to residents.
