Tag Archives: Austin tax appraisals

Tax Appraisal Spike Proves Need For Homeowner Retention Initiative

By Bill Oakey – April 12, 2016

The Travis Central Appraisal District has released the data on 2016 property tax appraisals. As you can see from the map below, some of the most worrisome geographic areas in terms of gentrification are being clobbered again. Look at the dark-colored areas marked W, E and F and note that these Northeast and East Austin neighborhoods are seeing 16%, 17% and 18% appraisal increases. Beyond that, the map is dotted with other assorted double-digit increases.

 

 

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Click the map to enlarge it.

Austin Should Consider the Homeowner Retention Initiative

As mentioned in my previous blog posting, I have launched a comprehensive set of ideas for the City and the County to consider. The Homeowner Retention Initiative lays out a range of options to help make home ownership more affordable for both longterm residents and first-time homebuyers. The main focus however, is on our longterm residents who are consistently being priced out of their neighborhoods. The cost squeeze affects both low income and middle class homeowners and renters. So far in my discussions with City Council offices, the response has been very welcoming and encouraging. The issues are very complex and challenging. But I believe strongly that now is the time for a meeting of the minds, within both public and private civic quarters to attack and solve this critical affordability problem.

In the ongoing discussions of the initiative with City Council staff, some interesting perspectives have been raised. I would like to thank Ken Craig in Council Member Ann Kitchen’s office for suggesting that landlords could participate in some of the programs, and thereby be able to offer more affordable rents. When I met with Ashley Richardson in Council Member Renteria’s office, I was impressed with the stack of printed reports that she was prepared to study. And Michael Searle In Council Member Troxclair’s office, along with the other two policy aides, dug into the discussion with lots of detailed questions and insights. Because of some of the complexities, there will be tall mountains to climb. And we may not be able to surmount all of them. But if we can plow through some of the obstacles and achieve a measure of success, then it will have been worth the effort. On Wednesday of this week at 2:00, the initiative will be presented to the City’s Housing and Community Development Committee.

As for the Sting of the Tax Appraisals

We should not blame TCAD for the high appraisal increases. The year-after-year “clobbering” of the taxpayers is caused by the boom in Austin’s economy. Along with planning and zoning decisions. Even more importantly, the Texas Legislature maintains a steadfast insistence on relying more heavily on local property taxes to fund public services than any other large state in the country. I often hear people say, “Oh but this issue of skyrocketing property values is nothing new. California went through all that back in the 70’s and 80’s.” Well, here’s the big difference. Even back in those days, California paid its workers a living wage. And not only that, California voters passed Proposition 13, which froze taxable values at the purchase price of a home. Only after that home went back on the market did it gain a new taxable “market value.” It was an imperfect and controversial solution. But at least California had some kind of solution, along with much better salaries and wages.

We should also note that when the City of Austin, Travis County or any of the other taxing entities set their budgets, they would have to lower their tax rate in order to maintain an even level of spending from the previous year. If they actually did that, then the steep appraisal increases wouldn’t matter as much. But, unfortunately, we gaze at the Austin skyline every year and marvel at the sleek new highrises. Then we see all of the huge multifamily developments along every thoroughfare. And we ask and we wonder…

Where is all the new revenue from all of that new “tax base” going? How much new tax money is being generated each year? And why in the world are they spending it as fast as they can?

If anyone reading this can answer those questions, please drop a comment into this blog post! (And I haven’t given up on asking the City and the County for an itemized list of all of their “plans,” with a grand total of the costs and a public participation process to prioritize all of those plans).

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Musical accompaniment for this blog posting:

  1. “Taxman,” – the Beatles, Revolver album, 1966
  2. “I Got Stung,” Elvis Presley, 1958

Come And Speak 4:00 PM Thursday At City Council On Tax Appraisal Challenge

By Bill Oakey – May 26, 2015

The Austin City Council must decide by June 1st whether to launch a landmark challenge to the Travis Central Appraisal District over the undervalued commercial properties in this year’s tax appraisals. You can help convince them make the right decision to go forward with the appeal. Come to the City Council Chambers at 301 West 2nd Street, this Thursday May 28th. Bring your neighbors and friends. Email, text, Tweet and Facebook the link to this blog posting. We have obtained a 4:00 time certain for speakers on this topic, which is Item #4 on the agenda. You can sign up to speak, using the kiosks in the lobby of the Council Chambers anytime between now and Thursday’s meeting.

Please keep in mind that this is not an adversarial action against the TCAD appraisal officials. They have been very cooperative with our City Council members and City staff. This is the legally required process to correct major flaws caused by the Texas appraisal system. The law does not require sales price disclosure on either residential or commercial real estate transactions.

Here are some new developments on the Council’s pending decision on the appraisal challenge. Two major stumbling blocks could cause Travis County, AISD, or any of the other taxing entities in our area to oppose Austin’s challenge to TCAD. Both involve a potential delay in TCAD’s new certification of the tax rolls after the revised commercial appraisals have been calculated.

For one thing, taxpayers who usually make their payments to the Travis County Tax Office at the end of the year might lose the opportunity to do that, and then lose their Federal income tax deduction for this year. But a solution to that problem was discussed at Tuesday’s City Council Work Session. A plan is underway to allow taxpayers to pay an estimated tax by the end of the year and still use that for their Federal tax deduction. Then they would simply make a final supplemental payment once the new tax rolls are certified and final tax bill amounts are determined. With these tax receipts coming in, the taxing entities would not face a delay in receiving the revenues needed to fund their operations.

Plans are also being considered that might allow TCAD to certify the new tax rolls faster and shorten the delay period. City Council members are looking into whether each taxing entity could make a small contribution to TCAD and the Travis County Tax Office, so they could hire temporary workers to help them through the clerical work required to finish the new certification and get new tax notices sent out

We’ll see you in the City Council Chambers on Thursday afternoon. We are one step closer to ending the egregious inequity of undervalued commercial properties that has plagued residential taxpayers for too many years. For more information on the flawed Texas appraisal system, please visit Real Values for Texas at this link. Read their report and watch their excellent video.

City Report On Tax Appraisal Inequities Draws Outrage

By Bill Oakey – May 21, 2015

On Tuesday May 19th, a blue ribbon panel of City and County officials and other top leaders addressed an emotional crowd at the First Unitarian Universalist Church in Austin. The topic was property tax appraisals. The speaker lineup included:

Brigid Shea, Travis County Commissioner
Steve Adler, Mayor of Austin
Kathie Tovo, City of Austin Mayor Pro Tem
Bruce Elfant, Travis County Tax Assessor
Marya Crigler, Travis Central Appraisal District Chief Appraiser
Dick Lavine, Center for Public Policy Priorities
Leigh Murrin, Real Values for Texas

If you missed this event, please consider watching the full video here. It was highly informative, even if you thought you knew quite a bit about our tax appraisal system and how unjust it is. The combined factual and emotional impact is quite stunning. The City of Austin is considering filing a formal appeal of the undervalued commercial properties here in Austin. Estimates vary, but in many cases, large commercial buildings have been found to be undervalued by 40% or more.

On May 11th, the City released its detailed report on undervalued commercial properties. You can read the full report here. The panelists at the Tax Appraisal Forum discussed this blistering report, as well as details on the flawed tax appraisal system here in Texas. The cards are stacked so heavily against residential homeowners that the situation qualifies as a national disgrace. There are risks associated with the contemplated action by the City of filing a formal appeal to the Travis Central Appraisal District. The appeal could cause a delay in certifying this year’s tax rolls. Over 100 area taxing jurisdictions have been asked to weigh in on the appeal decision. But if the City indeed makes good on its formal challenge, the entire State of Texas would sit up and take notice. Fighting for justice can be a treacherous battle, just like any battle throughout history for a noble cause.

Affordability in Austin has reached an epic tipping point. You will see in the video of the panel discussion, that the citizens who spoke during the Q&A displayed emotions ranging from frustration to full-on anger. The appraisal inequities are only part of a bigger picture. Austin is growing at a breakneck speed, putting unprecedented pressure on home values and rents. Unlike businesses of all sizes, cities and counties do not carefully plan the pace of their growth. They do not add up the costs of all of their combined expansion plans that taxpayers go into debt and pay annual taxes to fund. It is more a matter of “build first and ask questions later.” That path, as everyone knows, can and often does result in spectacular boom and bust cycles. Perhaps we can convince our local officials to conduct a “Pre-Mortem” to determine how much we the citizens can realistically afford to pay for the cost of growth. And at what pace that growth can be deemed to be “affordable” for anyone but the most wealthy amongst us.

The State of Texas does not require sales price disclosure on either residential or commercial properties. We are one of only a few states that lacks this requirement. This sets up the flawed appraisal protest system, where the big boys can out-lawyer and out-spend not only the average homeowner, but the Appraisal Districts as well. Believe it or not, any cases that the Appraisal Districts lose in court require them to pay the commercial property owners’ legal fees. But if the case is decided in favor of us lowly taxpayers, we still have to pay the people’s side of the legal fees. The scales of justice are as titled as they can be. Attempts at reform during the current Legislative session went mostly nowhere, just as they have in every previous session going back for eons.

If you have a strong enough stomach, try to make yourself comfortable and watch this informative video on the inequity issues in our tax appraisal system. Thanks to the good folks at Real Values for Texas for their tireless efforts to push for reforms.

Austin To Consider Challenging Commercial Property Appraisals

By Bill Oakey – May 19, 2015

The City of Austin will decide within less than two weeks whether to formally challenge the tax appraisals of non-residential commercial properties. This would be a landmark event that comes as very welcome news. For far too long, commercial property owners have enjoyed the benefit of special loopholes under Texas law that allow them to gain property tax appraisals that often equate to only 60% of their true market value.

Texas is one of a tiny handful of states that do not require sales disclosure of properties after completed real estate transactions. This creates a tremendous burden on tax appraisal districts. It is much harder for them to determine actual market value of many commercial properties than it is for residential units. Residential units can be appraised in bulk, because of common characteristics in residential neighborhoods. But commercial properties vary widely in all sorts of respects, causing appraisals districts to face lots of challenges in trying to accurately estimate the market value of every building within their jurisdictions.

in Travis County, 90% of commercial property owners challenge their appraisals, and they often take their cases to court. The deep pockets of the big corporations dwarf the budget of the appraisal district, creating a very unlevel playing field. Many of the very same companies that receive tax subsidies to locate in Austin turn around and protest their tax appraisals, shifting the burden to residential taxpayers. The whole picture does not bode well for the beleaguered homeowners who have seen their tax appraisals shoot through the roof in the last few years.

A Great Big Thank You to Mayor Pro-Tem Kathie Tovo and Council Members Ann Kitchen, Ellen Troxclair Don Zimmerman!

These four City Council members have co-sponsored a resolution for Tuesday May 19th  to formally challenge this year’s tax appraisals for large commercial properties. A final decision on whether to file a challenge must be made before June 1st. The City has been studying and preparing for this potential action since last year. Of course there are risks that tax collections might be delayed. Bold actions always come with risks. But a fight for fairness is always a noble fight! One might ask, why doesn’t the Texas Legislature pass better laws to close the loopholes enjoyed by the rich and powerful? (silly question).

And one might say that commercial property owners might just raise their prices to their customers if they were suddenly required to pay their fair share of property taxes. But I have a much different outlook on the situation. Why should good, hard working average citizens be taxed out of their socks, year after year, while the big boys skate by without paying their fair share? I’m not the least bit concerned about how tough the fight is. The fact that we have new people on the City Council who are bold enough to stand up for the taxpayers is something to celebrate. I support the City Council resolution. Let the battle begin!

You Are Invited to a Property Tax Appraisal Forum

Dear Travis County Resident,

Commissioner Brigid Shea invites you to the Property Tax Appraisal Forum on Tuesday, May 19th from 6:00-8:00pm at the First Unitarian Universalist Church (4700 Grover Ave; 78757).

The forum will provide information on the current status of tax appraisals and the efforts underway to ease the burden on homeowners. The speakers will address concerns and provide information that you may need for appeals and exemptions, as well as an update on current legislation.

Speakers Include:

Brigid Shea, Travis County Commissioner

Kathie Tovo, City of Austin Mayor Pro Tem

Bruce Elfant, Travis County Tax Assessor

Marya Crigler, Travis Central Appraisal District Chief Appraiser

Dick Levine, Center for Public Policy Priorities

Leigh Murrin, Real Values for Texas

Sincerely,

Brigid Shea
Travis County Commissioner, Precinct 2
Address: 700 Lavaca, Ste.2.700, Austin, Texas
Phone: 512-854-1489
Email: Brigid.Shea@traviscountytx.gov
Twitter and Facebook: CommishShea

Who To Contact To Support Property Tax Relief At The Legislature

By Bill Oakey – April 30, 2015

The State Legislature has convened a joint House / Senate Budget Conference Committee. This committee will iron out the differences between the House and Senate versions of the budget.

We need to support the Senate version, which provides $2.4 billion in property tax relief. The House version contains no property tax relief, and would only give a tiny reduction in the sales tax. Here is a link that describes the Senate’s proposal for property tax reductions.

I urge everyone to email or call the House members of the Conference Committee listed below. Ask them to support the Senate’s recommended property tax reductions in their budget negotiations. Let them know that Austinites are struggling to keep up with sky high taxes and double digit appraisal increases. Please email, Tweet, and Facebook this blog posting to all of your friends and other contacts and ask them to do the same.

Texas House Members of the Budget Conference Committee:

Click each name to send an email. Phone numbers are listed on each page.

Appropriations Committee Chair John Otto

Appropriations Committee Vice Chair Sylvester Turner

Rep. Trent Ashby

Rep. Sarah Davis

Rep. Larry Gonzales

If you belong to a neighborhood organization or have access to any organization newsletter, please see that this appeal is posted. Try to get it circulated on as many blogs and forums as possible.

Property Tax Appraisals Require Quick Action By Local Leaders

By Bill Oakey – April 30, 2015

As the sun came up this morning, neighborhoods across the City were jolted awake by the continuing shockwaves of this year’s property tax appraisals. They are up by as much as 29% in some areas of town. For many taxpayers, this is on top of crippling double digit increases in last year’s appraisals.

This situation demands a call to action!

As a first step, I will be contacting City and County officials and asking them to make a public statement of support for the Texas Senate’s property tax reduction plan for the State budget. Unfortunately, the Texas House has offered a much weaker plan that reduces the sales tax by a very small percentage.

We need property tax relief now!

Look for another blog posting today, with links for you to contact the members of the House-Senate Conference Committee on the State budget. It is time for all taxpayers to unite in this effort. We will not get another chance for State legislative relief for two more years.

Here’s hoping that our City and County officials will make a strong public statement on our behalf as soon as possible. I will keep you posted.

The Biggest Tax Appraisal Shock Yet!

By Bill Oakey – April 29, 2015

They’re here!

That expression is somtimes used to announce that a flying saucer has landed. Emotions like horror and fear come to mind, especially when you get a peek at what lurks inside.

The same thing happens at this time every year in Austin.

The new TCAD property tax appraisals are now posted online. If you want to get scared out of your socks, just start picking out addresses from various neighborhoods and take a look, using TCAD’s property search page.

It’s not a pretty sight! Here is a map that shows some of the astonishing appraisal increases, as high as 29% in some neighborhoods. Click the graphic to enlarge it.

web_042915_travisappraisals

By reviewing the values across the City on TCAD’s website, you will see many $60,000 to $90,000+ increases for single family homes. Many of these same homeowners saw appraisal increases last year that were well above 10%. So, guess what that means. Even though there is a 10% cap on the home value used to calculate their tax bill, the assessment amount above the cap sits in the system to haunt the taxpayer in future years.

Even if the taxing entities lower their tax rates slightly to compensate for rising appraisals, tax bills continue to skyrocket.

Think about the longtime Austinites who have already seen their tax appraisals double and even triple in the last 10 or 15 years. Then think about the future. If taxes go up just 5% each year, it would only take 14 and a half years for today’s tax bills to double! That’s becuase the impact is compunded.

Ask yourself if the City of Austin can sustain that kind of tax spiral. Then you might want another cup of coffee.

Have a nice day!

Rail Bond Vote Would Bring Historic Tax Increase

By Bill Oakey – July 30, 2014

If anyone thinks the property tax impact of an annual City Council budget battle is something to worry about, please consider this.  For the last two years, the budget discussions have centered around changing the City’s tax rate by a tiny fraction of one penny.  That’s because our tax appraisals have skyrocketed, meaning that even a zero change in the tax rate would yield a considerable tax increase.

Well, make sure you are sitting down when you read this.  If voters approve the $1 billion urban rail and road bond package in November, they can say hello to a 6 cent increase in the property tax rate over the next five years.  The sobering details are contained in a City document called “General Obligation Bond Capacity Analysis.”  You can read it here.

What Would Happen to Our Bond Debt If the Rail Bonds Pass?

That’s an easy question to answer.  It would flat out double!  Our current general obligation debt, made up of previous bond votes for roads, parks, libraries, open space, and housing stands at about $1 billion.  So, in one fell swoop we would double our debt by voting for the rail and road package.  And the worse part is that it would do essentially nothing to relieve traffic congestion for most existing residents.

In fact, Austin won’t even come close to attaining the ridership levels needed for Federal funding for the urban rail line unless we reach extremely optimistic, massive growth projections. The developers pushing for the rail line from Riverside to Highland Mall would need to convince voters of the “miracle” in economic development potential that the project would bring. And yet, as one Austin American-Statesman reader wrote to the editor recently, “Well, thank goodness they are building a line from Riverside to Highland Mall, because I travel between those two points all the time. SAID NO ONE EVER!”

What the City Report Says About Taxes, the Debt and Our Bond Rating

Here is a snapshot of some of the report’s most significant facts and conclusions:

1. Our current general obligation debt is about $1 billion.

2. We still have an additional $425 million in 2006-2013 bonds left to issue.

3. The City estimates that another $425 million will be needed in a separate bond election in 2018, on top of the $1 billion in rail and road bonds to be voted on this November.

4. In order to preserve our AAA bond rating, we would need to raise property taxes by 6 cents between 2015 and 2020 if all of the bonds pass.

5. Not only would the property tax rate increase by 6 cents, but the City estimates that property tax appraisals will jump by over 25%!  Their example shows a $200,000 home being assessed at $255,000 by 2020.  So, the tax impact would multiply exponentially.

Don’t Forget About All the Other Tax Increases!

None of the above estimates include the back to back tax increases for the main part of the City Budget, plus utility rate increases and add-on fees, and taxes for AISD, Travis County, ACC, and Central Health.  And don’t forget that ACC will be asking for a $386 million dollar bond package this November as well.

So, as long as your career is rocking along with huge pay raises every six months or so, or your retirement income is zooming past inflation and leaving you with extra piles of cash, then you can easily afford to vote for the rail bonds.  But if you’re like the vast majority whose income is flat or even decreasing, then make sure you pass this information along to your friends and ask them to cast a resounding NO vote in November.

Austin Leaders Should Unite Behind Tax Appraisal Reform

By Bill Oakey – June 4, 2014

The Travis County Commissioners Court took the first step on Monday toward meaningful action on tax appraisal reform.  Thanks in large part to the efforts of commissioner candidate, Brigid Shea, the Court is seriously exploring whether to legally challenge all of the commercial tax appraisals in Travis County.  Two stunning facts tell the story of gross inequities in the current system:

1. Commercial property is currently being assessed at only about 60% of its market value, thanks to a gaping loophole in State law.

2. The Travis Central Appraisal District is out-gunned by high priced lawyers who often sue in court and win if those property owners don’t get the appraisals they want from TCAD.

The end result is that residential homeowners get the shaft.  And with Austin taxes hitting unsustainable levels, local leaders are speaking out on the need for reform.  If the County Commissioners follow through with their challenge, the entire state will take notice, and regardless of the outcome, the Legislature will be confronted with the issue come January.

County Judge Sam Biscoe stated after the discussions in executive session on Monday that a lot of legal questions will need to be answered before commissioners can decide whether to take action.  A formal challenge would trigger the need to find out what set of appraisals the City, County, and other taxing entities would use for tax collections in the upcoming year.  A potential delay in tax collections could jeopardize the chances of a challenge being filed.  The issue will return to the Commissioners Court on June 17th.  At that time, homeowners will be given an opportunity to speak.

City Council Member Kathie Tovo has scheduled an item for the City to consider an appeal as well.  What would really be helpful would be a coordinated effort, including AISD.  The year of 2014 apparently marks the tipping point where citizens and local leaders have finally gotten the message.  Austin cannot continue to grow and maintain a booming economy unless there is available money to pay for services.  Homeowners cannot be expected to carry a lopsided portion of that burden.  It’s not even a matter of whether they WANT to pay.  The fact is that rapidly increasing numbers of them simply can’t afford to pay any more.

Mayoral Candidate Steve Adler Adds His Voice To The Call For Reform

I especially appreciate the comments that Steve Adler made on Monday in his handout to the packed crowd of frustrated homeowners at the Commissioners Court on Monday:

“Residential property owners are being unfairly burdened with property taxes. The city and local governments should have challenged the system years ago. There is nothing new about this problem and it is good to see Travis County considering action now.”

“Politicians should be honest when they talk to taxpayers about raising taxes, regardless of what they do with the tax rates. Taxpayers deserve truth in taxation.”

Mr. Adler’s characteristic breadth of scope in approaching complex issues will place him ahead of the pack when it comes to tackling property tax issues.  His experience working in the Legislature will help with respect to appraisal reform.  And he has made it clear in discussions with me that he would not tolerate the deceptive City Hall practice of hiding behind the tax rate during annual budget deliberations.  It was Steve Adler who brought to my attention the fact that the 7/10 of a cent tax rate reduction in the City Manager’s budget forecast actually adds up to a 5.5% tax increase.

I was reminded of John Kerry’s comment in his acceptance speech at the 2004 Democratic National Convention, “Imagine a President who believes in science!”  Well, how about this.  “Imagine a mayor who believes in truth in taxation!”

If This Is A Chess Game, What Is The Next Move?

By Bill Oakey – June 2, 2014

If you often feel like a pawn in somebody else’s chess game, you are not alone.

The Players are looking down at Us from their perches on the upper floors of the tall towers. Those towers are all over the country, and even in some places overseas.  They can see us on their super-HD computer screens.  I’m not talking about literally seeing us through the cameras on our computers.  I’m talking about the figurative representations of us.

They are the kings and the queens, the rooks and the knights.

We are the pawns.

The City of Austin is just one ledger on one page in their impressive portfolios.  Of course, there are more of these viewing stations in downtown Austin than there are in New York, California , and Dubai.  But the objective is the same.  Move the pieces on the chess board around.  And try to outwit the opponents.  Try to make as much money as they can as fast as they can.  If only those gosh darned pawns didn’t get in the way sometimes!  They could make even more money.

We are the little dots seen slogging through the crowded streets, trying to get to work, to the grocery store, or perhaps over to Barton Springs, if only we could find a parking place.  And then slogging back home again to get some rest.  Before getting into the game all over again the next morning.

The Players have to be pretty worried right now.  Our tax appraisals were not a pretty picture. The news media is telling them that we have been observed acting restless.  So, what does that mean?  What will They do if We fall victim to the simple laws of economics?  No amount of maneuvering on the chess board can change the fact that we only earn X amount of income.  We can only afford so much in taxes.  We can only afford to vote for X number of bond elections.

The economy is part of the game too, but it is a Silent Player.  Just like Mother Nature is silent. You can’t do anything about the weather.  And when the economic scales get tipped out of balance, it becomes a desperate race against time.

Can The Players find enough new pawns to replace the estimated 40 current pawns who are leaving Austin every day?  Can they build enough self-enclosed “apartment communities” where the lowest rent for a one bedroom apartment is $1,375 per month?  These places have secured club rooms, open terraces with views, green lighting, and DNA testing for dogs.  You read that right.  If you find dog poop on your doorstep, THEY know whose dog did it. They have everybody’s dog’s DNA.  (I’m not making this up!  I saw it last night).

They want you to sell your single-family house so they can scrape it off and add another “apartment community” to their portfolio.

But what will happen to Them if the economy and Mother Nature don’t cooperate?  They have to scrambling to find a solution to the drought problem.  (I have to wonder how They feel about the proposed 30% water rate increase, with a new “drought fee” added to it).

Reports keep popping up in the news, stating that too many of Us are have stagnant wages and we can’t keep up with the costs of living in Austin.  So, I will end with the same question that I started with.

If this is a chess game, what is the next move?