Recent Blog Posts

  • The July 1 Rule for Property Tax Exemptions

    Authored by: on Monday, August 6th, 2018

    January 1 is the key date for property tax exemptions.  That’s the date on which the assessor takes a theoretical snapshot of a property’s ownership and use, the two primary criteria for property tax exemption eligibility.

    If a property doesn’t satisfy the requirements for a particular exemption or exclusion as of January 1, it will be taxable for the coming year. If the property does satisfy those requirements as of January 1 (and the appropriate application is filed), then the property will be exempt for the coming year.

    UNLESS (you knew it couldn’t be that simple) . . . exempt property is transferred to a taxable owner prior to July 1.  Then that property is taxable to the new owner for the coming tax year.

    July 1, it seems, is just as important as January 1 when it comes to property tax exemptions. Read more »

  • The Status of North Carolina Redistricting Near the End of the Decade

    Authored by: on Monday, July 23rd, 2018

    This blog post will bring you up to date on redistricting in North Carolina.  It has been a wild decade, but it looks like things have mostly shaken out.

    Every 10 years, after each federal census, the North Carolina General Assembly must come up with three redistricting plans—one for its own House of Representatives, one for its own Senate, and one for the state’s members of the U.S. House of Representatives.  That third one is often referred to as Congressional redistricting.

    Almost always, the redistricting plans are challenged in court.  In recent decades, the challenges have centered on claims that the plans involved racial discrimination—often called racial gerrymandering—in violation of the federal Voting Rights Act or the Constitution, or both.  Following the 2011 redistricting, those claims were once again at the fore.

    But in this decade, those racial gerrymander challenges have been joined by a newly-emerging kind of challenge—the partisan gerrymander claim.  Look here for my earlier explanation of the partisan gerrymander challenge.

    Over the last seven years, the U.S. Supreme Court affirmed court rulings that all three 2011 plans—state House, state Senate, and U.S. House—included unlawful racial gerrymanders and that the 2017 redraw of the state plans continued the unlawful racial gerrymander.  A federal court found that the 2016 redraw of Congressional districts amounted to an unlawful partisan gerrymander.  We now operate with court-drawn substitutes for the state plans, and the shadow of ongoing litigation hangs over all three plans. Read more »

  • More Occupancy Tax Q & A

    Authored by: on Thursday, July 19th, 2018

    If you missed our webinar on the regulation and taxation of short-term rentals such as those listed on AirBnB, it will soon be available for on-demand viewing here.  In that webinar, my SOG colleague Rebecca Badgett and I discussed different options available to local governments that are concerned about the proliferation of short-term rentals (“STRs”) or view them as a desirable revenue source.  This blog examines in more detail a few of the issues that arose during that discussion. For a more basic discussion of this topic, please see this blog post and this one on STR regulation and this blog post and this one on occupancy taxes.

    Read more »

  • New School Construction Lease Authority

    Authored by: on Monday, July 9th, 2018

    The 2018 legislative session brought about several significant changes to public school funding, including school capital projects funded with lottery proceeds.  Section 5.3(e2) of the 2018 Appropriations Act (S.L. 2018-5) authorizes counties (not local school boards) that receive Needs-Based Public School Building Grant funds from the Department of Public Instruction [DPI] to enter into a capital lease for construction of school facilities. Only counties designated by the NC Department of Commerce as development tier one or tier two areas are eligible to receive funds from the Needs-Based Public School Building Grant program (for more information about this program, see Kara Millonzi’s blog post here).  If your county is eligible for and receives one of these grants, how do you go about entering into a capital lease agreement under this new authorization?

    Read more »

  • The General Assembly Adjourns Until November

    Authored by: on Monday, July 2nd, 2018

    This past Friday, the NC General Assembly adjourned for several months.  According to the adjournment resolution, the plan is for the legislators to return to Raleigh on November 27. Unlike many previous adjournment resolutions (see S.L. 2017-12 for example), this one does not place any limitations on the types of issues and bills that may be considered when they return. It appears that the door will be wide open for consideration of any and all matters of legislative interest at that time.

    Note that the November session will not be considered a special or extra session.  Rather, it will be a continuation of the current regular session (the one we have historically referred to as the “short session” of the biennium).  See this post from last year discussing the different types of legislative sessions. Even though the short session is not technically over, we thought it would still be helpful to offer our annual Local Government Legislative Review Webinar this summer. Read on for more webinar details.  Read more »

  • Needs-Based Public School Capital Fund

    Authored by: on Tuesday, June 26th, 2018

    In 1987, the legislature enacted the School Facilities Act, which created the Public School Building Capital Fund (PSBCF). The PSBCF was established to provide aid to all counties for school construction projects. It is currently funded with state lottery proceeds. Since 2013, the legislature has appropriated a sum certain amount of lottery proceeds for this purpose, which is then apportioned among all counties based on their respective average daily membership (ADM) numbers. A county and its local school administrative unit(s) jointly apply to the Department of Public Instruction for a distribution of the moneys “to fund school construction projects and to retire indebtedness incurred for school construction projects.”  No county matching funds are required. For the past several years, including FY 2018–19, the legislature has appropriated $100 million to the fund.

    In 2017, the General Assembly established a second public school capital fund, known as the Needs-Based Public School Capital Fund (NBPSCF). This post details the purpose of the new fund and highlights 2018 legislative changes. Read more »

  • Changes to County / School Dispute Resolution Process

    Authored by: on Tuesday, June 26th, 2018

    As detailed here and here, if a local school board believes that it has not received sufficient funding from the county for the fiscal year, for either capital or operating expenses, the local school board may initiate a dispute resolution process. For many years, the process has had three stages—joint meeting of the two governing boards; mediation; and litigation. The General Assembly has replaced the litigation stage with a mandated funding formula for operating expense funding disputes. See S.L. 2018-83. Litigation will continue as the third stage for capital funding disputes. This post summaries the new dispute resolution process. Read more »