Citizens experience frustration when their local appraisal districts set their homes’ taxable value. What would real reform of these districts look like, and what will the Texas Legislature do to bring about such reform?
There are two key components involved in the property tax process: the appraisal districts that set the taxable value of the homes or apartment buildings we live in, and the local governments that take those values and set the tax rates that result in our property tax bills.
While it is local government officials—not appraisal districts—that decide our property tax bills, one local official has called the appraisal district’s processes “rather opaque” and said more transparency is needed.
North Texas realtor Chandler Crouch also has concerns.
“The biggest issue is that they appraise your house without ever looking at it, using a ‘mass appraisal’ technique,” he told Texas Scorecard. “It virtually guarantees that half of all the appraisals that they do will be too high.”
There’s also the problem with each district’s board of directors, which are elected by local officials rather than citizens.
“The current voting system for the CAD board of directors is horrible. No oversight. No transparency,” Crouch explained. “It leaves the door wide open for corruption.”
“It disenfranchises smaller taxing entities (cities, [school districts], etc). It completely leaves the taxpayers out of the process,” he added. “We are the ones writing the checks. We deserve to have a system that is transparent, fair, and represents our interests.”
Last week, State Rep. Mayes Middleton (R–Wallisville) introduced House Bill 1395, a lengthy bill that would, if passed, abolish the board of directors and place districts under the authority of their popularly elected local county tax assessor-collector.
“Regarding [the] tax assessor-collector being the leader, the idea has pros and cons,” Crouch said. “I like having an elected person in charge because that allows us to hold him/her accountable. I don’t like one person having so much power. I like having a board.”
I want the person in charge to have a certain level of appraisal/property tax expertise.
However, Michael Berlanga, a CPA and former staffer for then-State Rep. John Garza (R–Helotes), finds benefits to this proposal.
“The benefit of this restructuring would be to hold the county tax collector, who is directly elected by the people, [accountable] for the increasing property burden resulting from out-of-control appraisals with the appearance of fixed rates from the taxing jurisdictions,” he told Texas Scorecard. “The current culture of intergovernmental blame between cities, counties, [school districts] and other taxing authorities has allowed the appraisal process, and the chief appraiser, to be the scapegoat for the increasing burden, which is greater in Texas than the other non-income tax states.”
Other positive proposals Berlanga found include freezing residential property values for homeowners to the purchase price, as well as increasing the accountability of review boards to state legislators.
But others have raised serious questions about Middleton’s bill.
Former Harris County Chief Appraiser Jim Robinson didn’t mince words in a recent interview. “HB 1395, rather than resulting in improvement, would be a recipe for fiscal disaster,” he said.
“This bill would put some money back into the right pocket of some homeowners but would end up taking a lot of money out of the back pockets of all homeowners,” property tax agent John Osenbaugh added. “It is a promise of property tax relief that will be broken – guaranteed.”
“As an example, by eliminating a wide and detailed [range] of business personal property from the tax rolls, HB 1395 will force more even more burden[s] back on homeowners and other categories of taxpayers,” he added.
As for increasing the involvement of state legislators, Osenbaugh has grave concerns. “[It] is a certain roadmap to old-fashioned cronyism that could literally make the current level of inconsistency of enforcement of the Property Tax Code much worse than it is now among the various jurisdictions of Texas,” he said.
Osenbaugh also finds the bill doesn’t address the competence of appraisers, which he says is “far too restricted to be able to understand some of the many variable factors to which homeowners are guaranteed by both state law and constitutional standards.”
Osenbaugh said there are reforms he would support.
“[A] high-quality, professional, and independent statewide authority needs to be created that can review and enforce compliance for all appraisal district methodologies in every jurisdiction in Texas used to produce a property tax roll,” he said.
There are two more reform options he could back.
“I could support creating a system of establishing an ARB process where members were required to have specific levels of demonstrable expertise and certifications in matters of appraisal of property and the various processes used to value,” he said. Osenbaugh also said he would support extending “the civil court system.”
“There are logical steps that can be taken to create a genuinely independent process of protecting property owners’ legitimate due process rights, which are not fully protected now,” Osenbaugh said. “HB 1395 does not even pretend to address this top priority need of reform.”
Crouch said he is pleased the idea of increasing appraisal districts’ accountability to citizens was introduced. “In the end, I love that the idea is being presented and will be argued on its merits,” he said. “I hope the legislative process takes this idea and others being presented and figure out a way to upgrade.”
Citizens can keep track of HB 1395 and other proposed bills regarding appraisal districts and property tax rates by visiting Texas Legislature Online.