North Texans air tax appraisal criticisms
The chief appraiser of the Tarrant Appraisal District apologized to a panel of state lawmakers after a grilling over the problems with the software that caused millions of dollars in property to remain off the books in 2015.
“I’m very sorry for the issue we had to go through,” TAD Chief Appraiser Jeff Law told the state panel. Law got a grilling from the committee chairman, state Sen. Paul Bettencourt, R-Houston. Law was referring to a new software conversion that was implemented in October 2014.
Law was in the hot seat over a series of issues, including a contentious protest deadline that TAD mailed in notices to hundreds of thousands of property owners, a lawsuit that has put a clamp on the release of appraisal data to the public and the failures of appraisal software.
Bettencourt, a former tax assessor-collector in Harris County, said TAD should have gone to mediation to settle a lawsuit that blocked the public’s access to appraisal data. A software vendor sued the state to keep from disclosing the in formation.
“Once that data hits your house” it should be made public, Bettencourt told Law. “I don’t see how you could rule any other way. I would hope for a settlement.”
Law replied that the appraisal district’s attorneys are working diligently with attorneys for the software vendor to resolve the issue. He described TAD’s role as a “bystander” in the suit.
“We feel the same way,” Law said.
More than 500 spectators packed a large auditorium at the University of Texas at Arlington. A who’s who of Tarrant County leadership attended, including the mayors of Fort Worth and Arlington, Tarrant County Judge Glen Whitley, Tarrant County Tax Assessor-Collector Ron Wright and District Attorney Sharen Wilson.
More than 75 people sought permission to offer public testimony at the hearing, which began at 8 a.m. Speakers included dissatisfied property owners, attorneys and three former members of TAD’s Appraisal Review Board who were critical of TAD practices.
Former TAD ARB Chairman Gary Losada said the software “doesn’t work.” He said that the protest hearings are stacked against property owners and that TAD’s system is “adversarial” to the public.
Randy McKechnie, a property tax consultant and professor at UTA, expressed similar concerns that TAD’s process is not user-friendly to the public.
Texas has one of the best taxing systems in the nation, McKechnie said. “But I assure you the bar is very low.”
A North Richland Hills attorney, Kent Davis, who represents property owners at protest hearings, echoed that.
“If it took me four years to change software in my practice, I’d be counting bears as a park ranger in East Texas,” Davis said.
TAD “needs to be fixed,” he said. “We need leadership from the state level to come in and fix what’s going on at the local level.”
”The process is so frustrating,” he said. “I see people in my office every week, seniors, folks, people moving in from out of state that don’t understand the system. They want to know how can taxes be this much. How can we afford to pay this.”
Bettencourt’s committee is the Texas Senate Select Committee on Property Tax Reform and Relief. It has held similar meetings across the state to gather input from local residents. A former Birdville school trustee, state Sen. Kelly Hancock, R-North Richland Hills, is a member.
For years, TAD went about its business with little or no public scrutiny. Annual appraisals were released and local schools and cities adopted tax rates to coincide with those values with few questions asked.
But in 2015, many began to question TAD operations. Last fall, after delayed appraisals and reports of thousands of incomplete accounts, it was discovered that an October 2014 software conversion did not go as smoothly as touted.
The transfer of 1.6 million property records created a slowdown in the assessment of millions of dollars in properties for 2015. TAD reported values considerably less than those of its neighbors and the state comptroller of public accounts.
In March, the chief financial officers of several local public school districts said they had lost millions in local funding for schools because of TAD’s software problems. The Fort Worth school district said it lost $12 million in property tax revenue for the 2015-16 school year budget. Eagle Mountain-Saginaw said it was shorted $5 million; Grapevine-Colleyville, up to $8 million.
Using the state comptroller’s study and TAD 2015 certified values, there was an estimated $5 billion difference in property values.
To schools, that represented more than $140 million in local revenue based on each school district’s tax rate, records show.
Last week, TAD’s governing board voted unanimously to spend $195,000 on an audit of the appraisal software. The audit is to be conducted by Weaver, a large Texas public accounting firm.
Under the gun
Law has said all along that the software problems have been resolved.
But Wednesday’s public testimony called that into question.
Tracy Stanley, a former ARB member and a state arbitrator on the comptroller’s registry, said that Law had minimized the extent of the software problems to TAD’s board of directors.
“Since 2014, TAD’s conversion and implementation have caused a disaster like no other appraisal district has suffered in recent history,” Stanley told the Star-Telegram after his testimony to the committee. “Most of the issues have been withheld from the public, the taxing entities and the board of directors.”
Over the past 1 1/2 years, Stanley has obtained hundreds of TAD emails and documentation under requests he made in accordance with the Texas Public Information Act, according to a log obtained from TAD by the Star-Telegram. The act allows residents’ access to the records and data of public entities.
Stanley said he has shared the emails and documents with Hancock, the North Richland Hills lawmaker. Stanley also provided some of the emails to the Star-Telegram. In one email, a TAD appraiser spends multiple pages to outline flaws with the new software. “If a user accidentally hits the enter key on the RPA search screen, it throws the system into a loop that will not exit until it times out, ten minutes later.”
Yet another gripe was that TAD pays the chairman of the Appraisal Review Board a daily rate of more than $400. Other ARB members earn a daily rate less than $200.
“On first glance, it has the perception of a payoff by the appraisal district,’’ Stanley said.
Rising property values a burden
Committee members are expected to use the testimony to develop new legislation to push for tax relief. Many Texans are burdened by rising property taxes, committee member said.
In some cases, the tax burden is pricing Texans out of their homes, said state Sen. Eddie Lucio, D-Brownsville.
“I’m saddened and just extremely worried for those that have not had cost of living increases,” Lucio said.
Tom Fabry of Frisco said local elected officials play a role in the tax “charade.” Many contend that they have not increased their tax rates but they receive a windfall in their tax collections because property appraisals continue to rise at a breakneck rate.
“They pat themselves on the back for keeping tax rates low,” Fabry said. But a “stealth” tax is created as property values continue to increase. People are required to pay more if their homes are being valued higher.
Tarrant County expects a 14 percent increase in property values for 2016. Dallas and neighboring counties have projected similar increases.