Property Tax Relief
Big Thicket Messenger - February 2007
by John Otto
Under the current appraisal process, appraised values are increasing at a higher rate than personal income growth. This results in homeowners finding it more difficult to pay their property taxes, and in some cases being forced to sell their homes. There have recently been unsuccessful attempts to lower the current yearly cap on appraisals from the current 10% to 5%, thereby slowing the rate of increasing taxes.
Why have attempts to lower the appraisal cap failed? There are several reasons, but the most significant being the inability to garner the 100 votes (2/3 of the House membership) needed to pass this piece of legislation because it requires a Constitutional Amendment.
Those who oppose lowering the appraisal cap to 5% do so because they believe it is bad public policy to artificially keep property values below their fair market value. This could, they argue, result in taxpayers being treated differently for ad valorem tax purposes depending on when they purchased their home and how long they have lived there. Others argue it artificially ties the hands of city and county officials to generate the funds necessary to operate their entities.
Those who support lowering the appraisal cap to 5% point out that it more closely approximates the rate of personal income growth and inflation; therefore, it will allow taxes to increase more in line with the increase in personal income and people will be better able to afford any tax increases resulting from appraisal increases.
I do support appraisal caps, and did cast my vote in support of lowering the appraisal cap to 5% during the 79th Legislative Session. I realized though, it may once again prove difficult to pass an appraisal caps bill during the current 80th Session. Therefore, I began looking for other methods to slow down the rate of appraisal increases. That’s why I filed House Bill 216 (HB 216).
HB 216 affects the appraisal reviews that are conducted each year by the Comptroller’s office on each appraisal district in the state. Under current law, appraisal districts must come within a 5% margin of error of the study completed by the Comptroller. If they do not fall within that margin of error, they are forced to either raise their appraisal values or the school districts within the areas that fall outside the 5% margin lose some of their state funding. The practical result is some appraisal districts feel the pressure to “shoot high” on appraised values to 10%, thereby removing some of the pressure on appraisal districts to raise values in order to meet the Comptroller’s review.
I originally filed HB 216 in the Third Special Session of the 79th Legislature as HB 60. The bill was heard in the House Committee on Ways and Means with three chief appraisers testifying in favor of the bill, including Alan Conner, Chief Appraiser of Liberty County Central Appraisal District. Unfortunately, there was not enough time to get the bill beyond committee in the shortened time frame of the Special Session. This session, however, I am optimistic the bill will go forward as the Chairman of Ways and Means has asked to joint author the bill with me, which demonstrates significant support for the bill going forward.
I sincerely hope HB 216 is met favorably by my colleagues in the legislature and is an answer to increasing appraisal values and rising property taxes. But whether it passes or not, I am still continuing to find other methods to help relieve the burden of rising property taxes.