Talking taxes, and our state’s screwed-up appraisal process.
Mike Collier
With about as many local candidates as voters in attendance, the Travis County Democratic Party hosted a “town hall” on property tax reform Friday morning, where everybody agreed with would-be County Commissioner (Precinct 2) Brigid Shea: “The appraisal process is broken.” To fix it – in the current state political climate – will take some doing.
The event, introduced by TCDP Executive Director J.D. Gins, was headlined by Shea and Mike Collier, candidate for state Comptroller, who each spoke briefly and then responded to audience questions. Among the several dozen attendees, Newsdesk counted at least a dozen local candidates – most of them for Austin’s fall City Council elections – and among them likely County Judge Sarah Eckhardt, who took the mic for a moment to rattle off some estimates of the financial benefits to county homeowners of substantial tax reform. The forum was also webcast across the state; Shea introduced a brief video produced by Real Values for Texas, a new statewide coalition “taking action to expose the impact of our state’s broken property tax system on homeowners, kids, and local communities.”
The gist of the problem, reiterated Collier and Shea, is that the property tax appraisal system has been allowed to become radically inequitable – even unconstitutional, said Collier. Under the Texas Constitution, properties are required to be assessed at market value for taxation purposes. For individual homeowners, said Collier, that’s mostly what happens; but big industrial and commercial property owners have managed, over the years, by various mechanisms – e.g., limiting exposure, concealing sales prices, and using greater resources to appeal – to be taxed at much lower valuations.
According to Real Values for Texas, the result is a system that, statewide, taxes major commercial and industrial properties at roughly 60% of market value, thereby moving much of that additional burden onto residential homeowners. Shea said that during her campaign visits, the subject is on everyone’s lips (especially in Travis County, where property values continue to surge). “It is hurting people all across our state,” Shea said, “literally driving people out of their homes.”
Collier noted that statewide, the problem must be addressed by the Legislature, which has largely relied on across-the-board spending cuts – especially to public schools – instead of attempting to make the system more equitable. He recommended three basic fixes: 1) tightening the definition of capital property; 2) requiring some form of sale price disclosure (as is required in 46 states); 3) addressing the imbalance in “negotiating power.” Commercial property owners, he pointed out, not only have teams of lawyers to appeal their valuations, but also, if they should win a lawsuit, the appraisal districts must pay any legal costs (not so in reverse). As a result, appraisal officials are motivated to capitulate rather than risk losing contested appeals.
Collier acknowledged that substantial reform will require legislative action, but the comptroller has a “voice, and the data,” to press the Legislature to comprehend the problem and restore equity to the system. He said that the Republican Party in Texas has become the spokesman and representative of big business, and “small businesses need at least one comptroller.” Rather than think first about the needs of big business, he added, state officials need to consider, in order, the needs of “homeowners, consumers, small business, and then big business.”
We’ve talked about this before, and you know how I feel about it. I’m glad to see Collier out and about talking about this – he’s on a two-week statewide tour, including a stop in Atascocita today, to discuss the issue. If he can get his message out, he can put himself in a position to win.