By: Jack Cross
Editor’s Note: When an opportunity presents itself to allow
our little paper to help this community learn more about a
topic that impacts each and every one of us, it is not difficult
to say yes. So when Jack Cross came to us with the offer to help
us understand more about the processes behind appraisals
and tax law, we became very excited. Following is the first of
a three-part dive into Appraisals, Taxes, Exemptions, and the
measures, processes and impact these particular areas of our
local and state government agencies work.
As a member of the Appraisal Review Board for six years,
Cross was unable to speak out. Now he is ready to share his
insights and expertise through this column and by answering
your questions and comments. Simply submit your questions
at: firstname.lastname@example.org and watch for your answers
to appear in our next issue.
In 1979 the state created Central Appraisal Districts
(CADs). Legislators wrote a tax law and appraisal procedures.
The comptroller was assigned as the state
bureau to be the governing agency for Cads. As the
governing body, the comptroller has major influence
on every aspect of CAD operation. Cads must follow
appraisal procedures and practices developed by the
state. The comptroller’s responsibility includes training
Cad appraisers and other key Cad employees, training
appraisal review board members and providing model
hearing for the ARB to use.
Comptroller agents make yearly on-site visits to audit
Cads governance, operating procedures, appraisal standards
and methodologies. State agents conducts a
Property Value Study (PVS) using real estate sales to
ensure that Cads appraise at 95 to 100 percent of market
The PVS is important to the state because it determines
how much money the state sends to school
districts. Higher appraisals benefit the state because
increased appraisal values result in less money the state
sends to school districts, thus shifting more tax responsibility
to local property owners.
If Cad values are below 5 percent of what the state
determines are true market values, the Cad MUST correct
the deficiencies before the appraisal values are set
final in January. Non-compliant deficiencies are referred
to the Texas Department of Licensing and Regulation for
School funding is the reason for the rise in property
taxes, it is complex, loaded with formula’s and not well
understood by the public. It is no secret that voters are
irate over rising property tax and this is why the Governor
and other candidates run on property tax reform as a
campaign issue while they running away from the real
problem, school finance.
Promising to fix a state problem with a local tax cap is
deceiving and reality, just another unfunded state mandate.
School taxes are 54 percent of all property taxes,
a tax cap would NOT apply to school taxes. A tax cap
will NOT lower your appraisal, there is no limit on market
value, when your property value increases most people
see a tax increase even if a taxing unit does not increase
the tax rate.
The rules on how schools are funded has a staggering
impact on both taxpayers and the quality of education.
In recent years the share of funds the state sends to
school districts has declined from 48 to 37 percent. This
results in an astonishing loss of local property tax dollars
that taxpayers have to make up. The Texas education
agency estimates it will “recapture” $5.13 billion during
the next budget period, up from $3.69 billion in the current
budget. By freeing up state money for school funding
allows the state to use local property taxes for programs
other than education. It’s really a tool to help balance the
Recapture or what is commonly called “Robin Hood”
is a transfer of money from property rich school districts
to poorer school districts. The court has ruled this as
legal, but now the state is using part of this local property
tax money for programs other than education. School
districts already saddled with shrinking state revenue for
operations and paying salaries to keep good teachers,
now are having to ask taxpayers to pay more taxes for
During the legislative session that just ended, nothing
was done in the way of property tax reform. The house
offered to add $1.5 billion extra into schools but adding
funding for private schools and home schoolers killed
it. School districts opposed this because it would have
taken more money away from the public-school system.
Fast forward to the current election cycle and we hear
rhetoric that suggests high taxes are caused by over
spending local elected officials. The state’s fix is a local
tax rate cap. Keep in mind that the state’s rate tax cap
is open-ended; it does not cap schools, appraisal value
increases or service fees.
The property tax provides more tax dollars for local
services in Texas than any other source. Property taxes
help to pay for public schools, city streets, county roads,
police, fire protection, and many other services. A complicated
appraisal/ tax system that taxpayers are not
familiar with allows state officials to shift blame away
from themselves and run on a platform that property tax
reform is a local problem.
By: Jack Cross