BC 1993 04 05 - Laserfiche WebLink

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249 dispute. However, the settlement makes a breakthrough in the strained relations between Philip Morris and Gabarrus County and thus lays the foundation for future negotiations. Compromise means a settlement of differences in which both sides make concessions. As such, compromise does not set up a win/lose outcome but a blurred result in which both parties can raise their arms in victory. At the same time, the most fervent advocates of each side will be disappointed with the concessions made by their respective side. Some would have us go to the mat for a "clean" victory...or loss. History clearly demonstrates that this is a costly posture to take. Court activity to date has been prolonged, expensive and without any progress in settling the central issue of PM's tax values. Only the issue of the County's tax audit contract has been addressed. At the current rate of speed of the legal processes involved in this situation, we can expect four or five more years of expensive legal maneuvering. "Going to the mat" may be the satisfactory approach from a public opinion perspective, but "mat time" at over $125/hour is excessively costly. During most recent negotiations, the N. C. Supreme Court agreed to review the Court of Appeals ruling against the County in the Philip Morris case. The County is encouraged by the prospect of the review, but it must be kept in mind that the Supreme Court decision will not settle the question of what Philip Morris owes the County. It will only address contract method originally used by the County. Although the Supreme Court's determination will be important, it will not bring Philip Morris and Gabarrus County any closer to settlement. The issue of the discovered taxable values will have to be played out before the Property Tax Commission with the possibility that further litigation will follow its decision...a prospect that is depressingly expensive and fundamentally perverse regarding the County's relationship with its corporate citizens° The question of fairness and equitable treatment underlies all of the County's actions regarding property tax matters. At the basis of our property tax law is the notion that a fair market value can be determined for all property to be taxed. For some types of property, fair market value is relatively easy to determine. The volume of sales in the single family home market provides ample guidance in determining the fair market tax value of most houses. Likewise, sales activities of most ordinary commercial property provides standards for determining tax value in that category of property. On the other hand, unique property is not bought and sold frequently enough to establish fair market values. Philip Morris is certainly a unique property. If the plant came on the market today, what price would it bring? Clearly, the number of potential users of such a large facility is severely limited. Moreover, the n~mber of potential buyers who could use the facility and its cigarette manufacturing equipment is virtually non-existent. Where, then, is the "fair market" by which the County is to measure the facility's tax value. The State provides that in the absence of a fair market the County is to use a cost approach. But the' depreciation considerations of a cost approach again introduces the question of what unique facilities and equipment are worth for ad valorem tax purposes. Three private companies have arrived at three widely different values on the Philip Morris property. If the experts can't agree, how then can the laymen, elected officials, be expected to do otherwise than try to reach a compromise? The only option is to let the mat time clock run and watch the cost consume an increasingly significant portion of the total tax question at hand.