More news from the Harris County Appraisal District

Local legislators, candidates call for appraisal system reform

By VAL CLIFTON <mailto:[email protected]>

Published: 08.15.08
With many of their constituents feeling the pinch of increased taxes coupled with rising home valuations, legislators are expressing their disapproval of the state’s appraisal system.Senate Dist. 7 Dan Patrick said appraisal reform is an issue he’s been working on for the last 10 years.“It’s broken and it needs to be abolished because we need to move away from a property tax base to support our schools and our government,” Patrick said. “But within the system we have, the appraisals from one property to one another don’t represent the true value of the property.”Patrick said many of his constituents don’t feel they get a fair hearing and are forced to go to the appraisal review board, or even to court.

“I’ve have had countless people call my office and tell me their home was appraised for more than they sold it for, considerably more in some cases,” Patrick said.He said some counties in Texas appraise every three years, while other counties appraise annually, but reappraising every other year would be equal to cutting the appraisal cap from 10 to 5 percent.Patrick called for the state comptroller to be removed from the appraisal process.“We don’t need someone in Austin, who has no clue what someone’s house is worth in Tomball or Memorial or Katy, telling the appraiser here how to appraise their homes,” Patrick said.

Dist. 150 Rep. Debbie Riddle said she thinks the state’s appraisal system needs a “tremendous” amount of reform and shouldn’t be the main moneymaker for public school education.

She said she is opposed to property tax, and would prefer a lower, more broad-based tax such as a slight sales tax increase.

“I think that the problems are symptomatic of a problematic tax,” Riddle said. “If we tackle the problem and not just the symptom, I think everything will fall into line quickly.”

Riddle’s Democratic opponent Brad Neal said a more objective evaluation process, more transparency in the district’s management and a longer term cycle for valuations could be possible improvements to the appraisal process in Texas.

Reappraising every five years, as opposed to annually, would be more beneficial in that it would reduce the overhead and cost that the appraisal district incurs, he said.

“Primarily, the benefit for the property owners would be that less of their time would be wasted in the annual contesting of the appraisal,” Neal said. “They would only have to do this once every cycle.”

One idea he favors, but isn’t committed to, is for the districts to begin basing their formulations based on an average valuation per square foot instead of a property-per-property valuation.

He said that because HCAD is an entity that most people have to interact with, the voters should decide who hold the offices.

But HCAD Chief Appraiser Jim Robinson said perhaps the most significant problem with the state’s property tax system is that most people don’t understand how it works.

“Unfortunately, even though the total state and local tax burden in Texas is among the lowest of all states in America, the property tax component is being called on to handle too much of the load,” Robinson said. “That part of the equation needs to change.”

Robinson said it has become popular for people to blame rising taxes on what some refer to as “appraisal creep,” but that the appraisal’s sole purpose is to allocate the tax burden based on Jan. 1 market value.

School districts, which generate the largest share of the local tax levy, don’t have the option to lower tax rates because state funding formulas decrease the amount of state money sent to the ISDs as property values increase, he said.

“There’s also immense pressure from the state for the appraisal district to maintain full market values,” Robinson said. “Each year, the state comptroller is required to study the appraisal level in every appraisal district, and in every school district.”

If the appraisal district’s values in a school district are more than 5 percent below the value the comptroller’s study projects they should be, the school district is considered to be outside the margin of error and fails the study, he said.

If this happens for two consecutive years, the district becomes subject to state funding penalties. Additionally, the appraisal district is at risk of being placed in conservatorship until the comptroller finds that values in every school district are as high as the state thinks they should be.

The state study claimed that HCAD was under appraising the Cypress-Fairbanks ISD for the last two years, and Houston ISD for the last three, findings that Robinson said the district disagrees with.

“The values claimed by those property owners are lower than the 2007 values placed on their properties by HCAD, but the state says we are all wrong; that our appraisals should be higher yet,” he said.

Robinson said hopefully the legislature will act to fix the inaccuracies in the state’s process of studying appraisal district values, and will also consider enacting mandatory sales disclosure.

“Texas is one of only a hand full of states where sales information isn’t disclosed to the appraisal authorities at the time of sale, and this omission creates a situation which contributes to inaccurate appraisals,” he said.

HCAD is also looking at its processes, and Robinson has asked the board of directors to change the frequency of the appraisal cycle to every two years, an approach he said several legislators support.

“The Harris County Appraisal District is committed to fairly serving the property owners of Harris County,” Robinson said. “We have a top-notch and caring professional staff, and offer more services to assist property owners than any appraisal office in America.”

Representative Patricia Harless did not respond to requests for interviews in time for press.