Property tax reform is the hottest new "it" issue in Austin, although the topic is as old as the legislative loopholes that created an unfair appraisal process favoring commercial properties.
The conversation around appraisals and property taxes gathered momentum last month after the arrival of residential tax bills and a May 20 community forum that drew an overflow crowd to the First Unitarian Universalist Church in North Austin. There, homeowners aired their grievances over another year of higher residential appraisals – an 18% jump in the last three years alone, but much higher for many homeowners – and higher property taxes.
Responding to these concerns, Travis County Commissioners decided it was time to do something – possibly by challenging the county's entire 2014 commercial property tax roll. Commissioners met privately with attorneys on Monday – the deadline for residents to appeal their taxes – as a placard-waving crowd of people waited for a chance to testify. But commissioners neither voted, nor heard testimony.
County Judge Sam Biscoe told the crowd they'll have their chance to speak June 17, if not before, when commissioners take action on whether to file a challenge petition with the Travis Central Appraisal District. "We need additional time to review and work through this matter," Biscoe said after emerging from executive session.
Let's hope the commissioners don't get cold feet between now and when they vote. In 2009, they mulled the idea of filing a challenge but for whatever reason backed off without a vote. In that instance, commissioners were responding to a report released by local activist and real estate investor Brian Rodgers titled "The Unfair Burden." The year before, Rodgers had bankrolled an unsuccessful ballot referendum that would have ended city subsidies for retail projects (see "No Fair Share?," July 17, 2009).
Rodgers' report based its findings on public documents and other information obtained through open records, which bore out his claims that: 1) the Texas property tax code is screwy, and 2) commercial property owners don't pay their fair share.
The disparity gap between commercial and residential properties has only widened in the five years since the county first dipped its toe in the water. Now, Biscoe appears ready to act. That's thanks in large measure to Brigid Shea, the likely next Precinct 2 Commissioner, who has helped reignite the property tax conversation in Travis County. Shea credits both Biscoe and interim Pct. 2 Commissioner Bruce Todd for moving the ball forward. The more doors she knocked on during her primary campaign, she said, the more she realized that homeowners are terrified of losing their homes to rising tax bills. "In my 25 years of grassroots work in the community," she added, "I have never seen an issue where people are as furious and as frightened."
The appraisal process is also poised to become a campaign issue in this year's mayoral and City Council elections. Council Member and District 9 candidate Kathie Tovo has proposed that the city follow the county's lead and also file a protest; that item is on Council's June 12 agenda.
The recent burst of activity on this front, including extensive coverage in the Statesman, touched off a flurry of email exchanges this week on the Austin Neighborhoods Council listserv and elsewhere. Lorri Michel, a property tax attorney, issued a cautionary warning, saying that a change in the law could end up pitting apartment renters against homeowners, as multifamily property owners would likely pass the cost on to their tenants. Former County Judge Bill Aleshire disseminated an email charging that if the city really wanted to help homeowners, they could follow Travis County's example by giving 20% homestead exemptions on city property tax bills. "They can do that with their own vote, right now," he wrote. "And, by granting a homestead exemption, guess what? It shifts the tax burden from homes to commercial properties."
County Tax Assessor-Collector Bruce Elfant, who with the Appraisal District's Marya Crigler has met with residents at community forums, also offered some insightful analysis of a state law that doesn't require disclosure of sales prices – "which makes the process of determining fair market value far more expensive and problematic than it should be." He said Texas is one of only nine states that don't require disclosure. Still a larger issue is the state's over-reliance on property taxes to fund public services, he said. That problem is compounded by the Legislature's eagerness to slash funding for schools and social services, forcing local governments to shoulder more of the costs.
State Sen. Kirk Watson says he's also reviewing ways to create a more equitable tax system to pay for public services. "Homeowners are doing their part," he said. "It's past time for the Legislature to do its part, too."
On that note, voters need to do their part and resist voting for Dan Patrick to be our next lieutenant governor, based on his pledge to cut property taxes by reducing the annual appraisal increase cap to 5%. You think the appraisal process is bad now? With Patrick in charge, things would only get worse.
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