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Data analysis and additional reporting by Lee Gans.
Property taxes in Durham went up nearly universally last year in the wake of a countywide revaluation. So when City Manager Bo Ferguson announced, last month, that the city faces a $9 million budget deficit due to low property tax revenue—the largest source of income for both the city and the county, the latter of which navigated a deficit of its own before passing its budget this week—council members were perplexed.
For answers, they turned recently to Durham County Tax Administrator Keyar Doyle, who presented a slide deck meant to explain the shortfall during a city council budget work session on May 27.
Doyle first laid out a chain of record-breaking numbers: last year’s revaluation, the first since 2019, produced the largest jump in assessed property values in county history, which, in turn, produced a record 10,533 appeals from property owners challenging their valuations. Ultimately a six-person board called the Board of Equalization and Review, or BOER, granted enough of those appeals to result in a $4.4 billion reduction in the assessed value of property across the county. That drop translated to $9 million in lost revenue for the city, as it collects property tax based on the values Doyle’s office calculates.
While the tax office had expected to lose some assessed value to appeals, Doyle told the council, the reduction ran well past what his office had planned for. The city’s budget shortfall stemmed from that gap: the difference between what revenue was expected and what actually materialized. No plan could have accounted for a value loss this size, Doyle added, because, he said, commercial properties filed more appeals and won larger sums than anyone could have expected.
Council members were not hostile to Doyle’s presentation, but they weren’t satisfied, either. Mayor Leonardo Williams said he plans to request a “deep dive” to pinpoint the “vulnerabilities in the systems” that brought about the shortfall. Other council members pressed Doyle on questions he was unable to answer on the spot, from how the $4.4 billion breaks down by property type to the success rate of appeals at the BOER.
Meanwhile, a six-week INDY investigation—involving records of the 10,000-plus appeals, data from five public records sources, and hundreds of county, state, and corporate documents—has produced answers to many of the questions the council raised.
Among the INDY’s biggest findings: relief flowed overwhelmingly to corporate landlords and to companies like Blackstone, Capitol Broadcasting Company, IBM, and BlueCross BlueShield, which, just between the four of them, had $524 million shaved off the assessed values of their properties. High-value property owners also didn’t just secure the largest reductions, they faced better odds in the appeals process; a low-income homeowner in Hayti was much less likely to get any reduction than, say, an…
