Below is from Chowan County government:
FACTS:
- Chowan County adopted a budget on Tuesday, June 30, 2026, based on
the 2026 schedule of values with a tax rate of .5725 cents. - SB474 passed both the House and Senate on July 1, 2026. This bill will
place Chowan County into the Property Tax Reappraisal Moratorium (SB
889) from which Chowan County was previously exempt based on
population. - If SB474 is not vetoed by Governor Stein, Chowan County will be
required to amend the 2026/2027 budget to reflect the 2022 schedule of
values with a tax rate necessary to balance the budget.
Why did the County adopt a budget based on the 2026 property reappraisal
values? State law requires the County to adopt a balanced budget by the statutory deadline of June 30 each year (North Carolina Local Government Fiscal Control Act). At the time the 2026/2027 budget was adopted, the 2026 reappraisal values were the legally effective tax base available to the County. Until SB 474 becomes effective, the County must prepare and adopt the budget using the laws currently in effect.
Didn’t the County know the law was likely to change? Yes. County officials were aware legislation (SB474) had been proposed and amended in both chambers of the General Assembly which would place the County under a reappraisal moratorium. However, at the time the County was required by law to adopt the annual budget (no later than June 30), SB 474 was not in effect.
Why couldn’t the County wait to adopt a budget until the legislation was
finalized? The County is required to adopt the annual budget by the statutory deadline, which is June 30 each year. Delaying adoption beyond the legal deadline could have prevented the County from legally authorizing expenditures, collecting revenues, and continuing essential public services. Historically the County adopts the annual budget at the first or second meeting in June each year. In an effort to avoid confusion for citizens by adopting a budget and subsequently amending it after the General Assembly made a decision on SB 474, the County delayed the adoption several times. The County scheduled a special meeting on June 29 and recessed until June 30 waiting for a decision from the General Assembly which did not timely occur.
What happens now? As of July 1, 2026 SB 474 was approved during its third reading by the General Assembly. Governor Stein has ten days to sign the bill into law, veto it or take no action. Once the SB 474 becomes law, the Board of Commissioners will amend the budget and adopt any necessary changes to the property tax rate in accordance with the new law.
Why didn’t the County budget using the 2022 property values? The County cannot choose which property values to use. It must follow the law that is in effect when the budget is adopted. Using a value schedule that was not legally authorized at that time
could have resulted in a budget that did not comply with state law.
Does amending the budget mean the original budget was incorrect? No. The original budget was prepared using the laws and information available at the time of adoption. Budget amendments are a normal governmental process when laws change, revenues
are revised, or circumstances require adjustments during the fiscal year.
Will County services change because of the amendment? No, the purpose of the budget amendment will be to ensure compliance with the new law. The Board of Commissioners have met over the past several months to develop a budget that meets the needs of the County and the Board requested two budget options based on two valuation schedules that fund services at the current level.
When will the County residents know if changes are necessary? Once SB 474 becomes law, the County will advertise a public hearing to adopt an amended budget based on the appropriate valuation schedule.
What will the tax rate be, if SB 474 becomes law? The Board has reviewed a proposed budget that funds services based on the 2022 valuation schedule and 2026 valuation schedule. The proposed tax rate to maintain services if SB 474 becomes law is 72 cents utilizing the 2022 real property values which is an increase of 2.5 cents from the 2025 tax rate which was 69.5 cents. The tax rate to maintain services using the 2026 property values is 57.25 cents which is not a tax reduction as the tax rate would be applied to higher property values. It is important to note an amended budget with a tax rate adjustment of from 57.25 cents to 72 cents is not a 14.75 cent tax increase to citizens as the
property values will also be reduced.
What should taxpayers do now? At this time, no action is required. The budget adopted by the Board reflects the law currently in effect. If state law changes, the County will provide updated information regarding any amendments to the budget, tax rate, or property tax bills.
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