Home Travis Central Appraisal District Protests Appraisal Review Board heads off lawsuit

Appraisal Review Board heads off lawsuit

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Board votes to accept the results of June 4 protest hearings

So it looks like property owners and their tax agents won’t be suing the Travis Appraisal Review Board after all.

Property tax agents had threatened to file suit because Travis Appraisal Review Board Chair Betty Thompson announced June 4 that the results of protest hearings held that day would be disregarded and rescheduled for June 29. That rankled property tax consultants who represented their clients at June 4 hearings and had obtained results they didn’t want thrown out.

John Krueger

John Paul “JP” Krueger, founding partner and CEO of Five Stone Tax Advisers (shown in lead photo conferring with Betty Thompson) told The Austin Bulldog his agents completed 98 protest hearings June 4, resulting in valuation reductions that saved his clients some $83,000 in taxes based on last year’s tax rates. The exact savings won’t be known until taxing units set new tax rates this fall.

The Travis Appraisal Review Board met this morning and, after spending an hour in a closed-door session to consult with its attorney, reconvened and voted to accept the results of the June 4 hearings. Protest hearings scheduled for June 4 but not held that day will be rescheduled for Saturday June 29.

ARB press release misleading

The Travis Appraisal Review Board (ARB) issued a press release (linked below) shortly before noon today that appears to show a misunderstanding of the ARB’s lawful role and a decided inclination to favor TCAD instead of basing its decisions on facts it hears from the property owner (or agent) and the appraisal district to decide whether the appraisal district acted appropriately in determining the value of property.

Tax Code Section 41.67(d) states, “Information that was previously requested under Section 41.461 by the protesting party that was not made available to the requesting party at least 14 days before the scheduled or postponed hearing may not be used as evidence in the hearing.”

The press release attempts to spin that prohibition, as if it’s unfair for TCAD not to be able to present its evidence—even if that evidence was not made available to the property tax protester, stating, “That would have meant agents could dictate reductions in value unopposed.”

To which Krueger replied, “This is a clear indication of the ARB working on behalf of the appraisal district.”

But the press release contains another statement that reveals an even more egregious misunderstanding about property taxes.

“Going forward without District evidence in thousand of cases could have had a tangible impact on tax revenues that fund schools, emergency services and various taxing entities in the county. ‘I don’t think that’s what the Legislators had in mind,’” Thompson said in the press release.

Bill Aleshire
Bill Aleshire

Attorney Bill Aleshire, a former Travis County tax assessor-collector and former Travis County judge, said, “I’m hoping soon we’re going to see a retraction or correction of that statement from the ARB chair because of the profound implications.

“If she really believes and tells ARB members that the chief appraiser has to win a protest hearing in order to prevent negative funding for education and emergency services, what ARB member in right mind would not side with TCAD in a protest hearing?

“The fact is that statement is not true, because when a governmental body adopts the effective tax rate the revenue stays the same.”

Aleshire said legislation enacted in 1979 put an end to the practice of hiking property appraisals as a way to increase revenue. “For the ARB to say this in a press release is very upsetting.”

(Disclosure: Aleshire represented The Austin Bulldog in two public information lawsuits against the City of Austin in 2011.)

Logjam due to unilateral changes

Aleshire said the number of formal protest hearings the ARB must hold this year increased tremendously compared with 2018. Last year, he said, 140,000 property valuations were protested and 90 percent of those were settled with informal, face-to-face meetings with TCAD staff appraisers. That left 14,000 protests to be decided via formal hearings before an ARB consisting of 30 members.

An unsigned letter from TCAD to property tax agents dated April 4, 2019 (copy linked below) announced “a new informal protest procedure for the 2019 season based on the extremely successful informal settlement via packet pilot program in 2018. This program will be utilized for all informal settlements in 2019. … These procedures demonstrate our commitment to working efficiently and effectively for every tax agency.”

Aleshire said the 2018 pilot program “was just a way to file the protest—not to have settlement discussions. What Chief Appraiser Marya Crigler did on informal settlements in 2019 was not tried, even as a pilot project, for settlements in 2018.”

Crigler did not respond to The Austin Bulldog’s phone request for an interview for this story.

This year, property owners or their agents could only E-File a protest via the TCAD website. Staff members would then review information supplied by the owner or agent and if persuaded by the evidence would email notice of a settlement offer. The property owner could either accept the offer or request a formal hearing.

Krueger said what’s even worse about doing away with informal hearings with staff appraisers is that the property valuations determined through ARB protest hearings will be skewed. Evidence is presented to three-member panels that for the most part have no experience in real estate or property valuation.

“You get far less accurate values in an ARB hearing than you do in an informal meeting with a TCAD appraiser,” he said. The informal process is not adversarial. It’s professional. You sit down in an informal environment and come up with a fair value.”

Krueger contrasts that with the adversarial nature of ARB protest hearings in which the TCAD appraiser is arguing to uphold the property valuation that was mailed to the property owner. “You’re less likely to have a fair and accurate outcome.”

TCAD less forthcoming with evidence

Another disruptive change implemented this year concerns how the property owner or agent obtains the information TCAD used to establish its property valuation.

In past years, evidence packets—containing the data, schedules, formulas and other information the chief appraiser plans to introduce at a hearing—were mailed to property owners or their agents.

This year, the property owner or agent could only obtain the evidence packets through TCAD’s online portal. Worse, in some cases the packets were not available. As The Austin Bulldog reported June 6, 2019, six Texas Protax agents who went to TCAD to get evidence packets for their clients property were unable to obtain them.

The end result of these changes is that just a small fraction of the estimated 150,000 protests filed this year were settled through the online process. The vast majority must go through formal ARB hearings to be resolved.

To handle the much higher number of formal hearings the ARB was increased from 30 members in 2018 to 120 members this year, a four-fold increase that Aleshire says will cost taxpayers an additional $1.7 million that will ultimately be passed on to the taxing units that pay TCAD’s annual budget.

“ARB members are paid a minimum per diem of $150 per day,” according to ARB Appointment Information published on TCAD’s website. At that pay rate the 120 ARB members would be collectively paid $18,000 a day for a protest season that started May 1 and could last until September 1, according to the webpage.

Links:

Travis Central Appraisal District letter to property tax agents, April 4, 2019 (1 page)

Travis Central Appraisal District undated letter to property tax agents (2 pages)

Travis Appraisal Review Board press release issued June 12, 2019 (2 pages)

Related Bulldog coverage:

New procedures undermine appraisal process, June 6, 2019

Lawsuit Seeks Property Tax Hearings, December 17, 2018

Homestead Exemptions a Tax Loophole,” February 26, 2014

Homestead Exemptions Rife With Abuse, December 20, 2013

Appraisal District to End Records Suppression, November 22, 2018

Chris Riley Nailed for Back Taxes, August 20, 2014

Appraisal Records Hidden from Public View, November 18, 2011

Are Austin’s Property Taxes Fair and Equitable? July 30, 2010

Trust indicators:

Ken Martin has been covering local government and politics in the Austin area since 1981. See more on Ken on the About page.

Email [email protected].

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