Homeowners are raising a stink over how Texas appraises property taxes.
Yet, lawmakers continue to allow special-interest groups to keep secret key information that could equalize the system. The information – the sale price of real estate – is public in 38 states.
Texas is the largest and the most reliant on property taxes of the states that keeps this information secret. The result is a rigged system that favors the wealthiest of property owners, who have the means to fight appraisals every year.
Meanwhile, everyday homeowners and small business owners shoulder more of the property tax burden every year. During a legislative hearing this session, chief appraisers from across the state testified that making sale prices public would help restore fairness to the system.
A bill to open this secret died in the House Business & Industry Committee this legislative session. During testimony before the committee, Bexar County’s chief appraiser explained the bill was needed because the wealthiest are able to appeal and file lawsuits, lowering their values by about 50 percent on average. This imbalance drains fairness from the system.
“Homeowners are tired of paying more than their fair share,” he said.
The process also breeds public distrust. Homeowners don’t understand how appraisers arrive at the value for their property because they have no ability to compare sale prices – all they can do is compare what the appraisal district reports.
Should the sale price of real estate be public information?
To put this another way, homeowners have to appeal their appraised value against what the appraisal district has told them about the appraised value of other homes. That’s like appealing a judge’s decision to the same judge. What difference will it make?
The Texas Constitution calls for property to be taxed at no more than its fair market value. What a willing buyer will pay a willing seller is the most accurate way to determine market value.
The sale price is not the only way to determine market value, of course, but appraisers all agree it’s the most valuable of data points. Making the information public would not take away any of the other methods appraisers now use to determine value; it would only add to the accuracy and fairness of the process.
The chief financial officer for the Fort Bend school district also testified in favor of the bill. He said he started his career at Price Waterhouse and has worked for AT&T, “so I definitely understand the tactics for tax avoidance.”
“The why on this is just equity and also just transparency,” he testified. “Commercial property owners, with the resources that they have, shield their sales prices, almost universally, and the homeowners don’t have that afforded to them.”
The movement for transparency in taxation is a populist bipartisan cause. Republican Gov. Rick Perry convened the Texas Task Force on Appraisal Reform, which recommended this change in 2007.
Closer to home, Victoria businessman Jeff Bauknight, a conservative member of the City Council, also has called for sale prices to be public. Bauknight, who serves on the Victoria Appraisal District’s board, said the current process makes no sense. Even in his elected and appointed positions, he said, he can’t explain why Victoria residential appraisals went up 8 percent in 2019.
“There doesn’t seem to be much rhyme or reason with the appraisal process,” Bauknight said.
When a business owner, City Council member and appraisal board member can’t explain the taxation process, it’s clearly broken.
The argument to the contrary offered to the House committee would be laughable if the issue were not so serious.
Jim Popp, whose Austin law firm represents commercial property owners, claimed appraisals are almost 100 percent accurate and the existing appeal process is “rosy.”
The secrecy in this process smells to high heaven, but it’s nothing like a rose.