Mar. 19, 2010
Here is one assertion I bet all Texans will agree with — property taxes in our state have a peculiar way of increasing. They rise in the best of times, and they rise in the worst of times. They rise in expansion, and they rise in recession. They rise in times of prosperity and in times of poverty. In short … they always rise.
As you probably know, property taxes are based on appraisals, and appraisals are speculations on what your property would fetch in the "open market." You also know, I'm sure, that property taxes are where municipal, county, and the state gets funding. Since Texas has no income tax, property taxes and sales taxes constitute the majority of our tax base.
Not surprisingly, our property-tax system is fraught with potential abuse. For the longest time there was no state oversight over local central appraisal districts (CADs). That reminds me of letting the fox guard the chicken coop. Furthermore, appealing a decision from a CAD's appraisal board was time-consuming, costly, and complex.
Well, Texas legislators heard the cries of their constituents and, in the 81st session, decided to act. Our state representatives and senators passed several laws last year that seek to make CADs accountable to taxpayers and streamline the
appeals process.
For instance, HB 8 intends to ensure that CADs across the state are using the same procedures and methodology. With great fanfare, the state comptroller's office announced their list of appraisal districts that would be under review. An audit of half of the CADs will occur this year, while the other half will be reviewed in 2011. This measure will ensure that property-appraisal practices are more accurate and uniform across the state.
SB 771 shifts the burden onto the chief appraisers to present "substantial evidence" for increasing the appraised value on homes whose value was reduced the year before.
The Texas Legislature also addressed rising taxes in down times. HB 1038 directs the chief appraiser, when determining the market value of a residence homestead, not to exclude the values of property on the neighborhood that had sold in foreclosure within the three previous years or that declined in value because of a declining economy.
Lastly, the legislature passed HB 1038, which creates a three-year pilot program in the state's largest counties to allow taxpayers to appeal to the State Office of Administrative Hearings (SOAH) an appraisal review board's determination on property valued over $1 million. Currently, those property owners must appeal the decision in a district court, which is cost prohibitive and time-consuming. SOAH conducts hearings and mediations in response to referrals from more than 50 state agencies and governmental entities. SOAH is held in high regard for being a low-cost option that handles disputes quickly.
These reforms were a long time coming, and there's more work yet to be done. In the meantime, we can all be glad that we're headed in the right direction here
in Texas.
