Property Taxes: Only Two Candidates Offer Any Real Hopes For Reform

The moon rises over a home along the Texas Coast. Homeowners are feeling like they are holding the bag, while politicians wrangler over the facts. (Matt Briscoe)

By Matt Briscoe

Property taxes in Texas have been out of hand for several years, but this year, more and more Texans are starting to grumble. While some taxpayers point the finger at local school districts, others are pointing them at lawmakers in Austin. Still, there is another group that is just shaking their fists in rage, not giving a damn who is to blame, just knowing that they are paying increasingly more, despite promises from elected officials.

During the Texas Gubernatorial Debate on Friday, Abbott directed concerns to a 34 page document on his website. Democrat Lupe Valdez simply said that she was the only person on the stage who knew how to fix it—though she didn’t not lay out plan on how, nor did Valdez point to a plan that she would support.

As it stands, there are only two candidates for statewide office that are talking about the issue, the problem and solutions that they think would be best. But the problem is that one is running for Governor and the other is running for Lieutenant Governor.

Only incumbent Republican Governor Greg Abbott and Democrat Mike Collier, candidate for Lieutenant Governor are even really speaking on the issue.

Reasons for that are obvious—Lupe Valdez obviously has no clue about the topic or the issue and sitting Lieutenant Governor Dan Patrick knows that under his leadership, the budget called for school property taxes to increase $6.9 billion dollars in 2018-2019–a conversation that he is wise to avoid with voters.

One topic that is starting to gain notice among property owners and voters in Texas is a formerly little known bill known as the Equal and Uniform law passed back in 1997.

In short, the Equal and Uniform Law establishes a method that allows owners of large industrial and commercial properties to sue appraisal districts. That action alone often allows for these owners to pay taxes that are well below market value.

In Brazoria County, outside of Houston, residents are facing some of the most aggressive enforcement of property taxes in the state. It is also home to Michigan based Dow Chemical, the largest landowner in the county.

Dow Chemical owns hundreds of parcels in Brazoria County and nearly all of those properties are appraised for below market value. In the highly secretive world of Brazoria County and their relationship with Dow Chemical, records are often hard to get your hands on and tax information is often listed as not applicable or is hidden on the Brazoria County Central Appraisal District website. However, one source within the company, who has a knowledge of Dow Chemical’s inner financial workings sent a letter to Matt Briscoe Texas, detailing methods used by the company to effectively lower their tax values on company owned property.

A letter sent from an employee of Dow Chemical shows how the company frequently uses tax attorneys to enforce the Equal and Uniform Law.

We reached out to Dow Chemical and the Brazoria County Appraisal District for comment, but requests to both were repeatedly denied.

But it is not only in Brazoria County that a large business takes advantage of this loophole. Alone, it is also not the problem when it comes to property taxes in Texas.

Just as Mike Collier, has identified Equal and Uniform loophole as a fatal flaw in the property tax debate, Governor Greg Abbott has identified a set of fatal flaws himself.

Abbott wants taxing jurisdictions to be more transparent about their local debt.

Currently, according to the Texas Bond Review Board Texas taxpayers are footing the bill for $218.46 billion dollars in outstanding bond debt. For taxpayers, that is concerning, as it translates to Texans holding the second highest per capita local debt burden in the nation.

But what can be done to fix the problem?

Governor Abbott does not answer the question in his extensive 34 page plan. He does want to include items such as the amount of current outstanding debt, debt service payments, current debt obligations and the amount of new debt being proposed on future bond election ballots. His plan does not address a solution for current local government debt—partly because without authorizing local tax increases, there isn’t one.

But still, that isn’t all there is when it comes to trying to figure out if Texans are holding the bag when it comes to property taxes or how much they are even holding.

The Texas Association of Counties talks plenty about unfunded mandates placed upon local governments by the state.

Those unfunded mandates often point to the economically challenged in our counties. Things like indigent healthcare, mental health programs, jail operations standards and indigent criminal defense.

Under current laws in place, the Legislature is allowed to force local governments to pay for mandates that often leave local governments carrying the burden, who often pass that down to the property owners.

Abbott wants to pass legislation that would force the Legislature to pass funding measures on any legislation that would bring a financial burden to local governments. His plan would also cap what jurisdictions could increase each year on taxpayers.

Abbott’s plan would place a cap of 2.5% per year without voter approval. Beyond that, his plan would do away with appointed positions such as appraisal district directors. Under his plan and similar to Senate Bill 2, which was a political casualty in the 85th session due to more socially driven bills favored by Lt. Gov. Patrick, Abbott proposes to have appraisal board directors to be incumbent elected officials such as a county commissioner or city council member. To avoid conflicts, non-elected employees of taxing authorities would be prohibited from serving as Appraisal District directors.

All of the steps outlined by Abbott bring little relief to taxpayers now, and only offer a promise of hope for the future. On the flip side, the plan laid out by the candidate for Lt. Governor, Mike Collier, doesn’t really offer any good solution either. Though Abbott’s plan is more forward looking, Abbott would have to have Dan Patrick’s full support to get any of it through the Legislature, something Abbott is likely not to get as long as deeply social issues are at the forefront of the Lt. Governor’s agenda.

By reading through both Collier’s and Abbott’s plans for property tax reform, it is clear to see that the pair, though from different parties could reasonably work hand in hand together to reach a solution for Texas property owners.