Coalitions and Property Tax Consultants
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“We will now discuss in a little more detail the Struggle for Existence”. Charles Darwin
By
Paul pennington
I. Sampling of Coalitions opposed to the current Texas property tax system:
A. Property Owners coalitions:
1. Americans for Prosperity
2. Citizens Lowering Our Unfair Taxes (CLOUT)
3. Texans for Facts
4. Texas Taxpayers
5. Empower Texans
6. Texas Public Policy Foundation (research)
II. What do these coalitions want?
A. Generally these groups propose appraisal caps or replacing property taxes for school funding with “fair sales tax.” Additionally, they oppose the Gross Margins tax and spending limits on political entities.
B. “The cost of owning a home or business in Texas is becoming increasingly prohibitive. Not only are property owners currently facing sky-high tax bills, but as each year passes, the rate of growth intensifies. Rather than encouraging economic prosperity, the property tax system penalizes Texans every year for their investments. Short of totally abolishing the property tax, limiting the growth of local spending to the sum of population growth and inflation is the only meaningful way the Texas Legislature can push back the rising tide of property taxes.” Texas Public Policy Foundation.
C. “Americans for Prosperity; Texas’ Property Tax Turns American Dream into Nightmare. “
III. State elected officials seek to change the current Texas property tax system.
A. Legislators speak out:
1. "I am absolutely convinced that my constituents, and frankly, the voters across Texas, would rather pay a sales tax when they purchase something than a property tax for the rest of their life." Republican State Representative Phil King
2. “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 another don’t represent the true value of the property.” Senate Dist. 7 Dan Patrick
B. The Governor’s Office: Texas Tax Reform Commission (School Finance):
1. Tax Fairness: Property Tax Relief by reducing school tax rates over two years (2006 – 2007).
2. New Franchise Tax (Gross Margins Tax).
C. The House committee studying property tax relief, including changes in the appraisal system.
IV. Appraisal districts, local governments, the Comptroller’s Office and the media by their actions keeps fueling the fire for the demand for change by the legislature and taxpayers.
A. Issues from the taxpayers/consultants point of view:
1. Unfair informal hearings.
2. Unfair Appraisal Review Board (ARB) hearings:
a. Bias of board members.
b. The staff has too much influence at ARB hearings.
c. Lack of qualifications of board members.
i. They need better unbiased training as it relates to The Property Tax Code and Case Law.
3. Taxpayers feel overwhelmed by the process:
a. They feel like they are fighting a huge, rigid monolithic bureaucracy.
b. They are not properly educated and do not have a good understanding of the Texas property tax system.
i. Some appraisal districts provide training on how to present an effective appeal informally and formally.
c. Thus they are drawn to special interest groups who claim to have quick fixes to change the current property tax system.
4. Rogue appraisal district(s): Bexar County appealing ARB rulings:
a. Bexar County; they want two bites at the apple.
5. Pressure to constantly increase values because of the Comptroller's Annual Property Value Study (PVS).
a. Both the appraisal districts and the Comptrollers’ Office have agreed that the current methodology is an accurate measure of valuations, which it is not.
b. Statistical samples do not reflect market as of the assessment date because of the natural ebb and flow of valuations.
6. HarrisCounty Appraisal District’s inability to make local value over the past three years.
a. So goes HCAD, so goes the Texas property tax system.
b. HCAD vs. the State Comptrollers’ Office.
7. “Appraisal districts are not at fault!
a. “If we had open sales records everything would be just fine”.
i. They essentially have it with residential properties (MLS) and there are still errors.
ii. They currently have Costar, Loopnet, etc.
iii. How does sales disclosure affect uniform and equal appeals?
b. “If we had audit powers with BPP everything would be just fine”.
i. The districts would hire third party entities to conduct audits.
8. Currently appraisal districts are not regulated as it relates to their day to day operations.
a. There is a lack of accountability.
i. With the exception of an occasionally adverse court ruling, Attorney General opinion and The Comptroller’s Office PVS, appraisal districts operate with immunity.
ii. Currently there is no agency to field complaints from the public and/or agents regarding issues they may have with appraisal districts.
9. The media, Appraisal districts and local government officials continue to claim businesses don’t pay their fair share of property taxes.
a. Neutral third party research groups disagree with this opinion;
ii. Businesses pay more property taxes in Texas than Homeowners.
b. Why are businesses portrayed as not paying their fair share of property tax?
i. (Easy Target) Homeowners vote and businesses don’t.
ii. Since appraisal districts and local governments won’t take any responsibility they pass the buck.
c. Businesses do pay the fair share of property taxes and the Margin tax.
i. This fact doesn’t sell news papers or make for good sound bites.
V. How do we protect ourselves and our clients’interests and rights?
A. The answer: Coalitions:
1. Definition. What is a coalition?
a. “A structured arrangement for cooperation and collaboration between otherwise unrelated groups or organizations, in which each group retains its identity, but all agree to work together toward a common, mutually agreed-upon goal”.
B. What elements make a coalition?
1. Members must have a common interest.
2. Members trust in each other and have credible commitment to the common issue.
3. The coalition must have a mechanism(s) to manage differences between and among the collective members.
4. The shared incentive to participate and consequently benefit.
VI. Coalitions which help property tax consultants and their clients:
A. Texas Association of Property Tax Professionals (TAPTP);
1. Its goal: “To unite professionals involved in all aspects of property tax management within the state of Texas. TAPTP has established itself as the clear voice of unified property tax professionals and has prevailed in multiple legislative and licensing issues”.
2. Tax consultants are helped by TAPTP committees and lobbyists.
3. Legislative updates to keep TAPTP members and their clients informed.
4. The creation and/or distribution of “White Papers” regarding the effects that the dismantling of the current property tax system would have on all Texans.
B. The IPT would be another example of a helpful coalition.
1. The IPT is an excellent resource for educational programs and affords members the opportunity to obtain a nationally recognized CMI designation.
2. National property tax news updates.
VII. Why Property Tax Consultants need local coalitions?
A. To level the playing field, first assess your opponents:
1. When looking at the size and budgets of appraisal districts, property tax consultants quickly find themselves in a “David and Goliath” situation.
a. For example look at the budgets and number of employees of the Big 5 Texas Appraisal Districts.
|
Appraisal District
|
2007 Budget
|
Total Parcels
|
Number of Employees
|
Parcels per Employee
|
Number of Appraisers
|
Parcels per Employee
|
|
|
|
|
|
|
|
|
|
Dallas Central Appraisal District
|
$20,960,025
|
856,520
|
255
|
3,359
|
93
|
9,210
|
|
|
|
|
|
|
|
|
|
Harris Central Appraisal District
|
$46,777,911
|
1,505,827
|
561
|
2,684
|
241
|
6,248
|
|
|
|
|
|
|
|
|
|
Tarrant County Appraisal District
|
$17,805,057
|
675,477
|
210
|
3,217
|
82
|
8,238
|
|
|
|
|
|
|
|
|
|
Bexar County Appraisal District
|
$12,698,319
|
600,000
|
151
|
3,974
|
67
|
8,955
|
|
|
|
|
|
|
|
|
|
Travis Central Appraisal District
|
$9,929,300
|
369,880
|
112
|
3,303
|
45
|
8,220
|
|
|
|
|
|
|
|
|
