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Texas - Keeping Taxes Equal and Uniform

by Foy Mitchell, Dallas, November 2014

 

The Texas State Constitution guarantees fair tax treatment for all property owners. Article VIII, Section 1 begins with these words: “Taxation shall be equal and uniform.” Recently this provision of law has come under persistent attack by some special interest groups and the media.

 

Are Homeowners at a Disadvantage?

 

Many claims have been made that the law causes homeowners to be treated unfairly. It's alleged that commercial and industrial property owners have a means to challenge their appraisals that puts homeowners at a disadvantage.

 

In addition, some local governments have also claimed they are losing millions of dollars in revenue because commercial and industrial properties are receiving valuation adjustments under the “equal and uniform” provision of the law that allow them to escape taxation on the full value of their property. In fact, they are not losing revenue because the Texas Truth in Taxation laws prevent this from happening.

 

Various organizations have lined up to express their concerns about the “equal and uniform” provision of the law, while many other groups have aligned themselves totally in support of these laws.

 

Research Shows the System Works

 

Perhaps one of the more factual papers on the issue was recently published by the Texas Taxpayers and Research Association (TTARA). Based on factual data from the Texas Comptroller’s office for 2012, the latest year for which data has been published, a TTARA white paper concluded that:

 

  • Of the 17.6 million parcels of land, only one million protests were filed.
    Thus, only 5.6% of property assessments were protested.

  • Of all the protests, only 31 were actually decided by trial verdicts.

  • The total protests resulted in a 2.8% reduction in value from the appraisal
    districts initial proposed values.

  • Total state value was $1.77 trillion. Thus, only 3.4% in value was lost
    due to ALL protests, not just equal and uniform.

 

TTARA’s report went on to note that while it is true single family properties have picked up a larger share of the total school district tax burden in the last 20 years, this is explained by the fact that:

 

  • There has been a 45% increase in the number of single-family homes built
    in this time period.

  • Modern housing is larger and much more expensive than 20 years ago.

  • Texas now has many more intellectually based industries whose capital
    investment in buildings and land are much smaller than the manufacturing
    industries of 20 years ago.

 

According to public sources, lawsuits filed in 2012 for all issues resulted in a total value loss of $13.75 billion. A further analysis of the Comptroller’s data finds that more taxable value was lost due to abatements ($16.9B), Freeport exemptions ($26.2B), homestead exemptions, and appraisal cap reductions ($161.9B). Interestingly, the appraisal districts themselves agreed to adjustments from their preliminary appraisals of $29 billion and their Appraisal Review Boards adjusted an additional $18 billion.

 

Finally, the “equal and uniform” provisions of the law are available to all property owners, not solely the purview of large/complex property owners. Virtually every homeowner who appeals a property value to the appraisal district makes a comparison of their value versus other properties in the neighborhood. Whether they realize it or not, this is an “equal and uniform” appeal. To deny Texas citizens this right would be unconscionable.