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Question on the allowable valuation date range

Colton asks:

I have a question about the valuation date for the property taxes. Everywhere I see a date on the HCAD website it says that the market value is the value of the property at Jan 1. I interpret this to mean that my market value, derived by HCAD, is based off information prior and up to Jan 1.

My hearing for my 2014 property taxes was last week. The first comp they used to derive my market value had a sale date of 1/9/2014. This seemed strange to me because every date I have seen references Jan 1. I asked the HCAD representative why this comp was included and his response was that HCAD can use sale dates up to Jan 31 (seems like the website should say that). Then during his presentation of evidence, he brought up sales from 5/31/14 as evidence to support his value. The 5/31/14 sale will be included for 2015 and should not have any impact on my 2014 value. So the majority of HCAD’s evidence to justify my 2014 market value is based on information that should not be used until 2015.

Does anyone know if they are allowed to use dates that are after Jan 1 to justify their market values? I don’t have all the rules to this game memorized, but this just seemed like they were playing dirty.

Colton, yes, everything I have read says that the value must be that of January 1. Whether there is some grace period of the entire month of January or not, it is obvious that a sale on May 31, 2014, about 2 months after your valuation notice was sent out, should not have been allowed. However, as you have found, and I have also experienced, HCAD appraisers routinely lie under oath in ARB meetings, and unfortunately, in the last two or three years, ARB panels have just become yes-men for HCAD, I have personally experienced them blatantly violating the state tax code in making their decisions.

Mayor Annise Parker on Harris County Suing HCAD

KUHT (Houston local PBS affliate Channel 8) had Mayor Annise Parker on Red, White and Blue about a months ago, and she gave her thoughts on the undervaluing of large commercial properties in Houston, and the county’s suit against HCAD.

The Ramp Up to 2014 Protest Season, and a Defense of Property Tax Protestors

I know I haven’t posted a story in a looong time, part of that is this is mostly a seasonal blog, it gets pulled out and dusted off when people are actively receiving their valuation notices and considering what to do next, and going through the property tax protest process. My own process is ongoing, yes, I am suing HCAD in district court, and one day I will write a blog on why I chose not to avail myself of the HCAD-controlled binding arbitration process and why I think you shouldn’t either. Once something significant happens in my case, I will share it with you, but now it is just a matter of waiting to get on dockets, etc.

In the meantime, I would like to address a charge that gets levied against property tax protestors on occasion, and I and people who have shared their story here on this blog have found ourselves accused of this: It is the pernicious and fallacious idea that those of us who protest our property taxes are trying to get out of paying our “fair share” of public services – schools, hospital districts, roads, etc. It is time to put this scurrilous slander to rest once and for all.

The person who leveled this accusation against me and another person here gave his full name, so I looked him up on the HCAD website, and found no property in his name on HCAD rolls, and is diatribe used very poor grammar indicative of someone with a low level of education, and as we all know it is education that allows us to prosper and be able to afford things like real estate, so it’s a pretty safe bet to assume this guy owns no real estate and therefore pays no property tax. So since I pay several thousand dollars every year that this guy does not  pay, frankly, he is the one not paying his “fair share” of the costs of running this county and state.

This brings up an important point – do people who own $200,000 houses use more public services than people who live in rental properties? Do people who own $300,000 houses use more public services than people who own $200,000 houses? Does a person who makes a cosmetic improvement to his house that raises its value from $300,000 to $350,000 suddenly use more public services than he used to? The answer to all these questions is “of course not”, and yet with each of these situations, the person owning the more expensive property pays more towards public services than the person who owns less expensive property, or no property at all. So let’s do away once and for all with the argument that the amount of money you have to pay in property tax is based on you paying your “fair share.” Frankly, it’s pretty insulting and hypocritical for non-property-owners to accuse property owners of not paying our “fair share”, when we are the ones paying the lion’s share of the public costs in this state, including paying non-owners’ “fair share” for them.

There is also an arrogance to the non-owner’s logic, that even though the non-owner knows nothing about the reality of the owner’s property, the non-owner must know that the owner’s property is worth what HCAD wants to claim it is worth. There are numerous flaws to that logic. First there is the fact that the state of Texas and the Harris County Commissioners Court  themselves found HCAD’s valuation process flawed and it is currently being heavily investigated, and second it ignores the fact that HCAD and its employees’ salaries are paid by tax dollars, so it is in HCAD’s vested interest to do everything it can to keep tax rolls as high as possible, and the easiest way to do that is to pad residential tax rolls, because residents don’t have the same resources to fight them that businesses do.

The other bit of arrogance in the non-owner’s logic is the non-owner is really saying that even if HCAD is overvaluing our houses, we should just shut up and take it, or else we are shortchanging kids’ education. It’s a really dirty below-the-belt tactic, and it is hypocritical for several reasons as well, and it just doesn’t stand up to the barest scrutiny. Take federal income tax. If someone makes $40,000 a year, and the government were taxing them for a $50,000 a year income, would you expect anyone to tell them they should just shut up and take it, or else they are shortchanging our armed forces? Of course not. What’s more, everyone, even the non-property-owner, utilizes every single deduction and tax credit he can to reduce his taxable income as much as possible so that he can pay the least taxes possible. So why is it that it is widely accepted that everyone is going to do everything they can to legally reduce their federal property tax burden, but there are still people out there who try to shame us property owners for simply doing what we can to legally reduce our property tax burden?

Last, this argument that it is our trying to reduce our property taxes that is taking money away from kids education, I want to do away with this once and for all. Harris County government makes all sorts of decisions that are inefficient and wasteful uses of our tax dollars, and that takes money away from kids’ education. Having running two separate law enforcement agencies, the sheriff’s department, and the constable’s office, when it would make a lot more sense to shut down the constables and expand the sheriff’s department, for one. Another example is the Astrodome. Even though the majority of voters in this county voted against saving the Astrodome four months ago, the Commissioners have continued to stall on tearing it down and keep trying to find other ways to repurpose it, when tearing it down would save taxpayers $2 million a year in insurance, utilities, and maintenance.

Harris County Commissioners Court Threatening to Sue HCAD

Sorry for the prolonged hiatus, everyone, the past several months being the property tax offseason I did not have a lot to write about, until now. As the Houston Chronicle reported on January 30,  “county officials said Wednesday that they may consider suing the Harris County Appraisal District over concerns it is undervaluing certain business properties at the expense of homeowners.”

The Commissioners court took an “unprecendent step” of hiring independent appraisers to double check HCAd valuations on business properties, following revelations over the past year by George Scott, the Houston Press, and others that HCAD has agreed to set commercial value properties well below what these properties later sell for.

Former HCAD Chief Appraiser acknowledges George Scott’s criticism of HCAD is accurate

There are few champions of property tax reform in this county as tireless as George Scott (and one of those would be Coach Don Hart). Compared to these two gentlemen, I am a mere dilettant. George was a member of HCAD’s executive staff, and since leaving in 2012, he has been relentless in his investigation and reporting of HCAD’s corruption. One of the targets of his criticism has been former HCAD Chief Appraiser Jim Robinson. Scott reports in his latest column of georgescottreports.com that recently Robinson was asked in front of a room of several hundred tax agents, attorneys, and others, what he thought of George Scott’s criticism of him and HCAD. Robinson confirmed that much of what Scott has reported has been valid and accurate.

Scott also reveals that Robinson had serious reservations about the management team working under him, the same management team that came into power after Robinson’s retirement, people like Sands Stiefer. In the months leading up to his retirement, he had been making sincere efforts at reform, but these efforts did not succeed.

Costly Astrodome Rehab Proposal Defeated

The ballot proposal to raise $217 million by selling bonds for the purposes of redeveloping the Astrodome failed yesterday. Thank you to all of you who went out and voted “NO”. I had higher than average traffic to my site yesterday, and almost all of that was people who found my blog by searching for information on the plan and how to vote for it. I hope they found my post helpful in deciding which way to vote. The proposal would have raised property taxes for all of us, while only promising to break even in revenue.

The Dome is now almost certainly to be demolished soon. While this will cost about $30 million, it will save $2 to $3 million in upkeep a year after that.

Vote “No” on the Astrodome Redevelopment Plan This Tuesday

I have been weighing the Astrodome redevelopment plan ballot initiative over in my mind, had trouble deciding, but after doing research and talking to people whom I respect, I have come to the conclusion that this plan is just throwing good money after bad, and we, the property owners of this county, are the ones who will have to pay more in taxes because of it, and that is why I have decided to voice my opposition to it on this blog.

I am a native Houstonian, and apart from my time away in college, have lived here my whole life. I grew up with the Astrodome as the most recognizable landmark of my hometown, I went to games and rodeos there, and I understand that it is sad to see such a symbol, such a site of tradition for our city, in such disuse and disrepair. On top of that, I am generally an historical preservationist. I feel we have lost so many great places, like the Music Hall and the Colosseum, wonderful examples of Art Deco, and I hate to see any historic structure torn down if it can be practically preserved. But let’s face it, the Astrodome was never an ideal venue. Jack of all trades is master of none, and its multipurpose design really made it ill-suited for any of the events scheduled there. Indoor games never had the epic feel of outdoor events. The architecture isn’t exactly beautiful, and was long-ago adulterated by ill-conceived modifications, some of which were desperate and ultimately unsuccessful attempts to keep the Oilers in Houston. The Astrodome as it stands today is a deteriorating shell of what it once was. It is selfish and wrong of us to want to hang onto it out of nostalgia, like pet owners who refuse to put a suffering pet out of its misery.

With emotional issues out of the way, one concern remains – because of the ill-conceived late 80s additions, and because of costs associated with allowing a mammoth structure to sit mostly idle on an expensive piece of real estate for over 10 years, Harris County has accrued as much as $32 million in debt. I say “as much as” because due to the complex structure of the debt, no one is sure exactly how much debt there is. I am not sure how much the land the Astrodome is on is worth, but between the debt and additional cost to demolish to dome before selling it, I think it is a fair guess that Harris County will be upside down on the sale. So the question is, should we revitalize the dome, invest more on top of the debt, in the hopes that this new investment will create a facility that will generate enough revenue to produce a reasonable ROI?

On top of all the current debt that will continue to be serviced, the initiative on the ballot will raise $217 million from bond sales, and that $217 million, plus interest, will be paid back by us, the property owners of this county, in increases on our property taxes every year for the next THIRTY YEARS. We, today’s taxpayers, will not see a return on our investment in this revitalization plan. What also concerns me is the way both the Harris County Sports and Convention Corporation (HCSCC) and the Harris County Commissioners have coyly avoided the issue of potential revenue streams for this plan. I found it nowhere in the 14 page presentation (careful, I had a lot of problems trying to load this) the HCSCB has provided to the Harris County Commissioners, or the public. Furthermore, I was disturbed by these comments by Ed Emmett:

The taxpayers of Harris County own a very unique asset called the Astrodome. And Yes, it costs money, and I’ve been badgered by some in the media who say well, show us the business model. Well, you don’t have a business model for a park. There are a lot of things that government does that provides an asset or a service to the taxpayers that doesn’t necessarily pay for itself.

The best that HCSCC has done is estimate that the new facility would break even. The facility is expected to spend $2.1 million in annual operating expenses, and make $4 million in operating revenue, making a modest yearly profit of $1.9 million, but HCSCC board chairman Edgar Colon and Reliant Park general manager Mark Miller acknowledge that $1.9 million would likely be spent on utilities or other operating expenses.

That means that the new complex would not be generating money to pay back the bonds issued to build it – the cost of paying back those bonds would fall back on us, the property owner-taxpayers of the county.

There have been other far less expensive revitalization plans offered that involve demolishing the Astrodome. Trying to do something with this existing, unwieldy structure is simply too expensive, yet too many in the Commisioners Court want to hold onto the Astrodome for nostalgic value. We need to bite the bullet, vote down this proposal, and tear down the dome immediately. Though the teardown itself would not be cheap, it would be far less expensive than the current proposal, and even if the county were to sit on the vacant lot a few more years to consider redevelopment proposals, a lot without an astrodome on it would save county taxpayers about $2 million a year in insurance, maintenance, utilities, and security, the same as the renovated facility’s alleged “profit” that will be immediately spent, and we don’t have to spend $217 million to get it.

Vote NO on Harris County Bond Election Proposition 2.

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