NEWS

In December 2025, the Speaker of the N.C. House established the Select Committee on Property Tax Reduction and Reform. Guidance to the committee was described as follows: “… study options to reduce the property tax burden on taxpayers in North Carolina. The Committee shall consider reforms that provide property tax relief to taxpayers while balancing potential impacts on local government revenues.”

After meeting for several months, the committee is moving forward with an effort to fundamentally change the way municipalities establish their local revenue by giving the state the authority to cap the tax rates set by local municipalities. The proposal would require a change to the state constitution which requires approval by voters in a statewide referendum.

If you are a property owner in Davidson, this change could impact you. Davidson property owners currently pay property taxes based on rates set by the county (either Mecklenburg or Iredell) and Town of Davidson Boards of Commissioners. The rates are set based on $100 increments of assessed value of the property. The Town Board set the 2026 Budget (1 July 2025 – 30 June 2026) at 26.6 cents per $100 of the assessed value of their property. The Mecklenburg County rate is 49.27 cents per $100. The rate in Iredell County is 50.0 cents per $100 of property value. A chart providing this information across all 100 counties in North Carolina can be found here.

The other key part of the property tax equation is property value. The State of North Carolina requires counties to conduct a property revaluation every eight years. In 2019, Mecklenburg County made the decision to change from an eight-year revaluation cycle to a four-year cycle. The change came after the county came under extreme scrutiny for not only the staggering increases in the eight-year period, but also for the process itself.

The most recent Mecklenburg County property revaluations took place in 2023 and are scheduled to take place again in 2027. News of Davidson published this article in 2023 to describe the potential tax increases based on the changes in property values.

While the property tax burden for residents in the Town budget has often been higher than other local municipalities, current and past town boards have set up assistance programs to directly benefit local residents in need. In several cases, the Town’s assistance programs have worked hand-in-hand with Mecklenburg County programs to specifically offset property tax costs.

Overall, the Town Board sets the rates to meet the expected financial needs of the Town to cover the costs of the services provided to residents. Changes to that process could result in an inability to fund the Town’s operating budget. Since the Town is required to present a balanced budget every year via public meetings and hearings, it could mean a reduction in services for residents.

In their March 2026 Bulletin, the N.C. League of Municipalities, an organization that advises municipalities and lobbies on their behalf, suggested local municipalities speak out against this proposal:

“Over the coming weeks, please take time to reach out to your legislators to share your insights on the importance of property-tax funded services in your community as this committee considers future recommendations. Your advocacy is important!”

The Town of Davidson did just that, making it a top priority in their legislative advocacy agenda. The following specific information was provided by the town.

“The Town of Davidson has discussed this topic with our state elected leaders and included information in the 2026 Advocacy Agenda requesting the General Assembly to protect the Town’s right to levy property taxes and retain revenues to provide essential services to town residents. Property tax is the Town of Davidson’s largest revenue source, comprising 55% of the budget.

• Costs from personnel to trucks to services have increased exponentially in the last 5 - 7 years.
• Fire truck 113% increase (7 years)
• Police vehicle with equipment 47% increase (5 years)
• Solid Waste services 47% increase (5 years)

Towns must be able to pay for core services. See attached for more information from the 2026 Advocacy Agenda.

We have also been staying in touch with the NCLM as they are leading lobbying efforts against this “reform” on behalf of municipalities in NC.”

The legislative proposal is the work of the Select Committee on Property Tax Reform and Reduction. A full list of the members of the committee can be found at the previous hyperlink.

Three elected officials on the committee lost their primary races earlier this year and will not be re-elected to serve in the N.C. General Assembly. Additionally, Rep. Ager is currently running for the U.S. Congress seat held by incumbent Chuck Edwards.

Following the select committee’s meeting on April 15, the following draft document was posted on the General Assembly’s web site.

The Committee Recommendations are described with the following summary:

“The Committee on House Select Committee on Property Tax Reduction and Reform makes the following recommendations to the 2026 Regular Session of the 2025 General Assembly. Each proposal is followed by a Bill Analysis and can be found in Appendices B and E, respectively.

1. An Act to Amend the Constitution of the State to Require the Legislature to Enact a Property Tax Level Limit.
2. An Act to Update and Modify the Nonprofit Low- or Moderate-Income Housing Property Tax Exemption.”

The document includes a “Draft” Transmittal Letter with the signature blocks of the three co-chairs. The document is unsigned and dated May 1,2026.

The committee's site does not provide a record of the vote to move the proposal forward.

If approved, this would fundamentally alter things in the Town of Davidson. Davidson residents (in Mecklenburg County) currently pay property taxes based on rates established by the Mecklenburg County Board of Commissioners and the Town Board of Commissioners.

Meanwhile, the State Legislature’s attempt to limit municipalities' authorities comes in the midst of their own inability to pass a budget. North Carolina is currently the only state, among all 50 states, to not have an approved budget.

For those who might be wondering how the Legislature can do this, the answer is based in part on the fact that in North Carolina, local municipalities are given their authority from the state. According to the School of Government, “North Carolina local governments operate under authority granted by individual statutes, including specific statutes directing courts to interpret the grants of authority broadly (G.S. 160A-4; 153A-4).”

Currently, local governments set tax rates based on their needs to meet the costs of serving residents in their own communities. The proposal would change the state constitution to allow the legislature to limit local municipalities’ ability to set their own rates.

While few would argue that costs continue to rise, the issue here is who should be in control of the revenue of local municipalities – those municipalities or the N.C. General Assembly.

The News of Davidson Editorial Board will keep watching the progress of this issue to keep our readers informed.