The Tyler Morning Telegraph has a revealing story today (see link or below) in which Tom Pauken, the chair of the Governor’s Property Tax Reform Task Force, is quoted stating how disappointed he is with the lack of progress so far.Â He speaks candidly about what he sees as the primary obstacle to significant protections to control skyrocketing appraisals: Representative Fred Hill, Chairman of the House Local Ways and Means Committee.Â Referring to Hill as “hard-headed,” Pauken notes that Hill hasÂ so far blocked all but the most cosmetic reforms.Â
Many worthwhile reformÂ proposals are mentioned in the article, inlcuding revenue caps and those relating to the Property Value Study (PVS) conducted by the Comptroller.Â Â Legislation that is languishing in Hill'[s committee would allow up to 10 percent variance between local appraisals and the Comptroller’s Property Value Study (PVS), instead of the current 5 percent maximum variance.Â Because property tax appraisal is imprecise, the effect of the currentÂ limit is that local appraisal districts must artifically increase appraisals toÂ avoidÂ losing state education funds as a result of being more than 5 percent below theÂ sample usedÂ in the PVS.Â Â
The bottomÂ line on all propertyÂ tax reformsÂ is that time is of theÂ essence – bills that do not clear committee in the next few weeks have little chance of passing before the session ends on May 28.Â Â Let’s hope some of these important reforms get over the Hill in time to provide relief to taxpayers.
Where’s The Tax Relief?
By ROY MAYNARD
The architect of property appraisal reform says he’s disappointed a powerful committee chairman is blocking all but a few cosmetic changes to the system.
Tom Pauken, the Dallas lawyer who chaired Gov. Rick Perry’s Task Force on Appraisal Reform, tells the Tyler paper that state Rep. Fred Hill, R-Richardson, won’t let the more substantive fixes to the system out of his Local Government Ways and Means Committee.
A property owner’s tax bill is the product of two numbers: the tax rate and the appraised value of the property. Though the Legislature reformed public school finance to allow for a lower tax rate, appraisals continue to rise, threatening to undo any property tax relief the Legislature granted.
Pauken’s group toured the state last year, holding public hearings and preparing recommendations to the Legislature. They developed some specific steps to address what Pauken calls the “stealth tax” of appraisal increases:
- Requiring voter approval for any local taxing entity to exceed the last year’s budgeted revenues by 5 percent or more (revenue caps).
- Changing the makeup of appraisal boards to include two taxpayer representatives on the five-member boards, and giving taxpayers new options in challenging property valuations.
- Revamping the comptroller’s property valuation study.
- Prohibiting by statute any unfunded mandates from the state.
- Requiring real estate sales price disclosure.In addition, the task force recommended two constitutional amendments:
- Allowing property owners to calculate their property taxes using a five-year average of their property’s appraised value.
- Lowering the appraisal cap from the current 10 percent to 5 percent, allowing local option elections on a sales tax increase (with revenues dedicated to buying down property taxes), and doubling the local homestead exemption.
Bills enabling each of those recommendations were filed, then steered to Hill’s committee. That’s where they remain.
“I don’t think appraisal reform is dead yet, but I’m very, very concerned,” Pauken says. “Rep. Fred Hill has made it very difficult to get anything done. You can’t talk to him. He’s very hard-headed on this issue. For all practical purposes, he’s become the spokesman of the Texas Municipal League and the Texas Association of Counties.”
Those groups oppose measures such as revenue caps.
For his part, Hill tells the Tyler paper he’s not completely opposed to tweaking the system.
“But I am against revenue caps, which restrict the abilities of cities and counties to do their jobs,” Hill says. “And I’m against appraisal caps, which don’t do anything except distort the market.”
But there could be room for compromise on a specific measure, one proposed by Sen. Kevin Eltife, R-Tyler. That bill would allow counties to hold a vote on using a sales tax increase to buy down property taxes.
“I’ve met with Sen. Eltife, and I’ve told him I’d be happy to carry his bill in the House, if he would like me to do that,” Hill said. “It’s a very good idea, in my mind.”
On Thursday, Hill did allow some appraisal-related bills to emerge from committee – but they address such things as tax rate posting requirements for cities and counties, and changing the makeup of appraisal boards.
“I’m concerned that we’re just going to be taking baby steps,” Pauken says. “We have an opportunity to fix the whole system, but it’s going to be a much tougher fight now.”
Roy Maynard covers county government and politics. He can be reached at 903.596.6291. e-mail: [email protected]