While cities and counties are limited by state law to 3.5 percent revenue increases and school districts are limited to 2.5 percent increases (unless a disaster has been declared) the appraisal district is planning for massive spending increases
“This is going to get noticed,” said Bruce Elfant, Travis County’s tax assessor-collector and ex-officio member of Travis Central Appraisal District’s board of directors. That was his understated reaction to the staff presentation of the proposed TCAD budget for calendar year 2022.
The agency’s 2021 budget was the same as its 2020 budget: $20,193,893.
But the proposed 2022 budget unveiled at yesterday’s Budget Work Session weighed in at just a hair under $25 million—$24,986,951 to be exact.
Stated in raw dollars that’s a jump of $4.8 million.
The TCAD board advised staff to do what it could to either reduce or delay increased spending as much as possible before coming back to it’s June 8th meeting with a full-blown draft budget for further consideration.
More people power proposed
In the 11 tax years 2011 through 2021 TCAD staffing remained essentially unchanged. TCAD had 129 employees budgeted in 2011 and the same number in 2021. In the intervening years budgeted staffing levels never changed by more than three positions. That’s about to change—drastically—if staff budget proposals are approved.
TCAD wants to add 28 full-time employees. That’s 21.7 percent more people.
Of the new positions, 11 would be residential appraisers and five would be commercial appraisers. Customer support and appraisal support would each get three additional staffers. The other half-dozen new jobs would be spread over six different areas.
These increases are attributed to growth in workload. In the last decade, 62,400 parcels have been added to the tax rolls. Over that same 10 years the value of taxable properties has increased by $158.7 billion. Field inspections during that period have increased by 186 percent.
In addition, protests, lawsuits, and arbitrations have all skyrocketed.
Staff attorney Dustin Banks said, TCAD is very aggressive in assigning market values and it’s “very profitable” to file lawsuits against the agency, given the way the Tax Code is structured. “It’s a profitable model for the other side.”
Chief Appraiser Marya Crigler said, “We have to create a duplication of the workforce, one for formals (ARB hearings) and one for informals (protests filed and responded to primarily via the online portal). We can’t do them all at the same time.”
She said TCAD had encountered a lot of turnover in its appraiser staff, and had lost a lot of experienced people. The new employees are not as efficient and it takes a couple of them to do what previously could could have been done by one, more experienced person. “We need to increase staff just to keep up,” Crigler said.
Want more competitive salaries
Like employers in just about every segment of the economy, TCAD says it’s getting harder to attract and retain qualified workers. TCAD staff sees itself competing with businesses ranging from Amazon and Tesla to McDonald’s and Chipotle.
In response, budget work session materials show that TCAD’s 47 clerical workers are slated for a 12 percent increase in pay. Its 75 appraisers would see a 7 percent pay increase, as would 34 salaried professionals. The district’s 10 management and executive employees would get 3 percent raises.
Desirable candidates have turned down offers because salaries offered weren’t high enough to offset the area’s high cost of the living, staff said.
Crigler said that keeping employees is also a challenge. Twenty-seven left TCAD last year citing high stress and inability to take vacations. Only two went to work for firms that represent property owners filing protests, the rest went to other industries, she told the board.
“We want competent, highly qualified people. We want to train them up and keep them,” she said.
Nicole Conley, one of the City of Austin’s appointees and TCAD’s newest board member, asked if TCAD had other benefits it could tout to offset concerns about salaries and make jobs more attractive.
According to TCAD’s 2021 Adopted Budget, full-time regular employees with fewer than five years of service accrue eight hours a month in vacation time. Each additional five-year increment in years of service adds another eight hours per month for vacation. All such employees earn eight hours of sick leave per month with no carry-over limit. They also get 12 paid holidays a year plus two days off with pay for “personal holidays.”
In addition, TCAD participates in the Texas County and District Retirement System, under which employees contribute 7 percent. The district matches that at 250 percent. Employees vest after 10 years service and can retire when the employee’s age and years of service combined total 75. Further, the district contributes to a 401(a) plan for each employee annually, paying no less than 5 percent of the previous year’s gross income. Employees are fully vested in five years. Additional benefits include a deferred compensation plan, health insurance, health reimbursement account, and retiree health benefits. Plus they get dental insurance, vision insurance, life insurance, long-time disability insurance, long-term care insurance, and an employee-assistance program for a variety of services.
Leana Mann, TCAD’s director of operations, replied to Conley, saying, “We have robust benefits, but we have found in clerical and residential appraiser positions that pay is more important than benefits. They have to put food on the table.”
Earlier in the budget session, Mann said, “We’ve gone as far as we can technology-wise, we need people.”
Crigler said employees can’t take vacations in the middle of the summer protest season and appraisal work continues in the fall, as well, for discovery and field work.
“We have staff that hasn’t taken vacation in two years,” Crigler said. “We don’t have a bench to take up slack when someone’s absent…It’s not healthy for staff not being able to take vacations. They need to be freed up so they can recharge. The work is incredibly stressful.”
Other budget increases requested
The projected 2022 cost of operating the Appraisal Review Board, based on recommendations from recently appointed ARB Chair Thomas King, is $1,630,425. That’s an increase of more than $400,000 (36 percent) from the 2021 adopted budget. Per diem pay for ARB members account for more than $1.5 million, plus training, new member orientation, and other expenses.
TCAD is separate from the ARB but provides financial and clerical support for it.
TCAD staff proposed a 26.5 percent budget increase for subscriptions and data. Legal and attorney spending would see a 39.4 percent increase in response to a 548.3 percent increase in lawsuits filed since 2011.
Postage and freight are slated to increase to pay for additional mailings. Telephone expenses would increase 446 percent to continue the well received system of conducting formal Appraisal Review Board hearings by telephone. Aerial photography would increase to take advantage of a Change Finder capability that would assist appraisers in finding new improvements added to properties.
In addition, $523,791 is requested for capital equipment for a variety of uses.
Board members floated and discussed ideas for how TCAD might be able to reduce the overall workload by putting a crimp in the number of value protests filed each year.
Anthony Nguyen said fewer protests would be filed if property owners and agents knew TCAD would be fair and equitable in assigning property values. Since protesting valuations is a legal right the idea is to woo fewer protests by any means necessary.
Crigler responded by saying the number-one reason for filing protests is high property taxes. “We have one of the highest tax burdens in the state and there’s not a lot the appraisal district can do. We’re just the first place taxpayers get to come and talk.” She added that the district is doing more to educate taxpayers and giving them more opportunities to participate. To that end TCAD has held five webinars this year and also offers a series of educational videos on registering an online account, filing a protest, submitting and reviewing evidence, and accepting or rejecting settlement offers. All these videos are available on TCAD’s website.
Mann noted that more than 80 percent of all protests are filed by agents who represent property owners. Attorney Banks said a lot of agencies that represent property owners have contracts to file protests year after year. If someone is signed up with a company, then protests will be filed regardless.
That claim was confirmed by David Bawcom, director of appeals for Texas Pro Tax. “Our agreements require us to appeal and continue every year until terminated,” he said in an email.
Board Member Conley said, “I don’t see a way the appraisal district can convince anyone (not to protest) in a state that’s highly dependent on property taxes.” She suggested TCAD needs to talk to lawmakers and have a multiyear plan to meet its needs.
ARB plans for protest season
Before the Appraisal Review Board begins holding formal hearings for 2021 protests it will be working to finish up some 1,400 in-person hearings that were held over from 2020 due to Covid restrictions. “We have to figure out how to do that,” said ARB Chair King.
To get the 2021 hearings done and get the tax rolls certified by July 20th, he said, cooperation is needed among ARB, TCAD, and agents. “Agents are the key to getting certified by July 20th.” He said he expects to have completed 40,000 hearings by that date.
To that end, King sent a two-page letter to property tax agents May 11th to inform them of procedures and expectations for this year’s process. The letter states that 2021 formal protest hearings are scheduled to begin in mid-June and conclude on or before August 30th.
The letter states TCAD plans to operate up to 40 panels concurrently using remote Internet and telephonic communication. The intention is to schedule a minimum of 40 residential hearings and a minimum of 30 commercial and business personal property hearings per panel per day. Any postponements or rescheduling of hearings—if approved by King—will be held on Saturdays, he said. “That’s my strategy.”
He estimated the ARB will have to hold 47,520 hearings. Residential hearings will likely continue into September, King said.
He said that $290 billion in values must be certified to reach 90 percent for certification. The ideal is to hold formal hearings starting with the highest values and working to lower values as the process grinds on.
Legislation affecting appraisal districts
TCAD is tracking 503 bills that may or may not make it through the legislative sausage grinder to become law. Some have already been enacted. The session ends May 31st. Here are just a few of the bills the chief appraiser mentioned to the TCAD board and the status of each, according to Texas Legislature Online:
Elected official privacy—HB 1082, signed by Governor Greg Abbott May 19th, makes confidential the appraisal district records for all elected public officials in Texas. That privilege was previously available only for state officers, people elected statewide, and members of the Legislature, as well as 18 other categories including peace officers, current or former members of the armed forces, judges, and prosecutors. The statute takes effect September 1, 2021.
Faster exemption decisions—SB 63, among other things, would require the chief appraiser no later than the 90th day after receiving a request for a property tax exemption to decide whether to grant, modify, request additional information, or deny the exemption. The bill passed in both houses May 25th but has not yet been sent to the governor. Additional staffing would be needed to comply if this is enacted, Crigler said.
Disaster temporary exemptions—SB 1427 would allow temporary exemptions from ad valorem taxation for a portion of the appraised value of a property damaged by a disaster only for physical damage. Economic damage would not qualify for such exemptions. The bill passed both houses May 25th but has not yet been sent to the governor.
How TCAD’s budget is funded
It should be noted that TCAD itself does not levy a property tax. Instead, its budget is funded by the 15 school districts, 22 cities, Travis County, Central Health, Austin Community College District, and assorted other taxing entities for which it provides appraisal services and certifies tax rolls. Each taxing unit’s portion of TCAD’s budget is allocated based on the total property taxes imposed by each unit in proportion to the total dollar amount of property taxes imposed by all taxing units within the district.
Texas Tax Code Section 6.06 requires TCAD’s chief appraiser to prepare a proposed budget for operation of the district for the following calendar year and submit copies to its board and to each taxing unit before June 15.
The TCAD board must hold a public hearing on its proposed budget at least 10 days after giving notice of the hearing to each taxing unit’s presiding officer. The budget must be adopted by September 15th.
Although it hasn’t happened in recent memory, there is a provision to override the budget approved by the TCAD board.
“If governing bodies of a majority of the taxing units entitled to vote on the appointment of board members adopt resolutions disapproving a budget and file them with the secretary of the board within 30 days after its adoption, the budget does not take effect, and the board shall adopt a new budget within 30 days of the disapproval,” states Section 6.06(b) of the Tax Code.
Trust indicators: Bulldog founder and editor Ken Martin has been covering local government and politics in the Austin area since 1981 and investigating and reporting on Travis Central Appraisal District since 2011. See more about Ken on the About page.
Links to related documents:
TCAD 2021 Adopted Budget, September 3, 2020, (230 pages)
TCAD Board of Directors meeting materials, May 25, 2021 (213 pages)
TCAD Budget Work Session materials, May 25, 2021 (55 pages)
Links to related Bulldog coverage:
Appraisal Review Board gets new leader, finally, April 9, 2021
Appraisal Review Board chair resigns, March 18, 2021
Appraisal Review Board member rebuts criticisms, January 7, 2021
TCAD board hammers ARB chair over costs, delay, December 15, 2020
TCAD 2021 budget approved for $20.2 million, September 8, 2020
COVID-19 plans for appraisal review board hearings, June 1, 2020s
Deadline for property value protests this Friday, May 11, 2020
Protesting property values during COVID-19 emergency, April 15, 2020
Chief appraiser on a losing streak, March 17, 2020