Try this online exercise. Go to Chapter 105 of the North Carolina General Statutes. Here’s a link. Once there, most browsers will allow a search feature. A common way to search in many software applications is to press the <Ctrl> key +F. Now search all of Chapter 105 for “tax administrator”. It doesn’t exist. But there are lots of tax administrators in North Carolina, right? Now search all of Chapter 105 for “tax supervisor”. The tax supervisor is referenced 9 times in the Machinery Act. And if you read the context of those references, there are a few important roles involved there. How many counties have a tax supervisor to fulfill these roles?
The purpose of the introduction is more for fun than substance, plus I thought the paradox graphic was cool. The substance of this post is aligned with starting a discussion of conflicts to avoid no matter what we call the position, “tax administrator”, regardless of whether your county has such a position. The Machinery Act clearly requires every county board of commissioners to appoint a county assessor. The appointment of county and municipal tax collectors is referenced here. It looks like there are nine references hanging around to a “tax supervisor”. Those references should probably not be there. In 1987 the General Assembly deleted and changed the name of the tax supervisor to……you guessed it, the assessor.
Regarding most of this discussion, I’ve had multiple conversations with David Baker, Director of the Local Government Division at the NC Department of Revenue, and with my colleague Chris McLaughlin here at the School of Government. We have all spoken with various counties about this issue. While we are not suggesting that any such conflicts currently exist, I have been informed of and received questions about some of them in the past. This post is not intended to suggest a change is needed in counties that have a tax administrator. Rather it’s intended to responsibly interject thought about potential conflicts.
Quite simply, there shouldn’t be a supervisory position that influences the assessor, or the collector, to do anything other than what our law requires. For assessors, aside from a few legal exceptions, the primary legal responsibility is to assess all taxable property at its true value. Local government leadership should be seen as a team effort with several key players, but the assessor’s legal directives must be followed regardless of the ability to collect the tax, the wishes or needs of economic development or another department, the needs of another appointed or elected official, or any personal or political friendships or obligations. A new series of potential conflicts arise when one individual, as both assessor and collector, must without exception optimize assessment without regard to the ability to collect the tax. At the same time, when the assessor and collector are not the same person, the two positions must work hand in hand, communicating continuously. The collector and other team members deserve to know if a $100 million discovery is coming that could be a public relations or collection nightmare. G.S. 105-312(b) mandates that discoveries must be issued for property not properly listed. Property, both real and personal, must be listed and assessed even if the owner is unknown. The tax collector shall employ all lawful means to collect all taxes (he) is charged with. Does pronoun usage in law excuse our other equally-qualified tax collectors? I think not. Property tax statutes are clearly divided between the two appointed local tax officials – the county assessor and the county collector. The laws and oaths must be followed, in every county, regardless of organizational structure.
A tax administrator recently shared their opinion with me that having the two tax officials under one department works better because in the alternative arrangement, the assessor and collector sometimes do not get along very well. And, they added, it’s a lot easier to get along with oneself. My response was that this may be exactly the reason why during the establishment of the two positions and their duties, there was enough thought put into the design to recognize the need for more than one department head. Most local government services and duties are not controlled by a single leader with the legal authority over many functions, but rather controlled by multiple department heads, with statutory responsibilities and authorities designed to create separation of duties.
The position of county tax administrator is the creation of county management, not the general assembly. I’m not suggesting it is illegal. The NC Constitution allows the county assessor to be an office held concurrently with any other appointive or elective office except that of county commissioner. With over half of counties having a tax administrator, the position obviously has advantages. Perhaps those include lower cost, better communication, and it’s easier to get along with oneself (peace). Please share other advantages in your comments! However, the tax administrator should not have any control over the assessor, regarding legal requirements, unless the tax administrator is the assessor and similarly the tax administrator should not have any control over the county collector’s legal duties unless the administrator is appointed as the collector.
Our local governments vary greatly. The School of Government does not recommend any specific tax management organization, but only one that is legal and works best with all considerations. Below are some arrangements that exist currently in North Carolina. Are there others? As you review these, carefully consider which arrangement(s) are best? Is one best for your jurisdiction, but not others? Why?
- Appointed assessor and collector are two individuals who report directly to the county commissioners. This is the basic model that is described in the Machinery Act.
- Appointed assessor and collector are two individuals; one or both report to some other legally established, appointed position, possibly the county manager or finance director.
- Appointed assessor and collector are two individuals; one is designated the tax administrator, who is in charge of both departments. This arrangement should not be used, according to the NCDOR.
- Assessor and collector is one appointed person identified by another title (tax administrator for example) with deputy or assistant positions and appraisers under this person carrying out many of the daily legal responsibilities.
Let’s consider # 3 above. That’s the one the NCDOR discourages. We’ll use the example that the NCDOR would discourage the collector from supervising the assessor. The same conflicts we can imagine from that scenario can create similar conflicts in #4 above, where the collector’s duties and desires have the authority to influence assessment decisions.
Below are examples of potential conflicts to avoid. More than one of these are real examples I’ve received. Can you share other examples of conflicts you have avoided?
- Another position influences the assessor’s budget, resulting in inadequate funding necessary to carry out what is required by law. An example of this category might be the financial inability to acquire or maintain adequate commercial property data. Or perhaps the inability to have a business personal property compliance program. The result could be assessments in those classifications cannot be defended. The assessor has little choice but to reduce those assessments when appealed. When the county is identified by unscrupulous tax reps, more appeals would likely occur, leaving the assessor no choice but to lower values further. The end result is a burden shift to the residential property owner. Here’s a post on suggestions for effectively communicating what is needed in the assessor’s budget.
- Perhaps due to the above, an assessor has several concerns about an upcoming reappraisal. They also hear grumbling in the community about the reappraisal. A public relations campaign was not funded. The requested appraisal staff wasn’t funded, so property data is not accurate. The assessor reports to the “county director”. After hearing these concerns, the county director reports a version to the county commissioners. The county director is optimistic and the assessor’s concerns are watered down. The county director may even get a raise this year if there are no major problems in departments they oversee.
- A supervisor of an assessor or collector influences an assessment or collection duty in a way contrary to the assessor or collector’s best judgement. Most all potential supervisors of the assessor or collector (manager, finance director, or otherwise) are not local tax officials as defined in NCGS 105-273(10a), are not subject to the educational certification and continuing education requirements of the assessor, nor are they legally allowed to view some confidential records that are available to a local tax official, such as information available per NCGS 105-289(e).
- A supervisor doesn’t allow, or discourages, the collector from using all legal enforcement remedies available to collect taxes that have been charged.
- The administrator holds off on billing discoveries, allows listing after the closing of the listing period, and bills prior years without discoveries, all to keep the collection rate high. The collection rate becomes more important than billing non-annual bills. When this situation doesn’t involve a tax administrator, but instead some other supervisor, there should never be influence on the assessor to reduce a value below the legal standard, to exempt property that is not exempt, or to release a discovery before the legal process found in GS 105-312 has occurred.