12/05/06		Property tax caps.
David Tuthill

There are three articles of interest in the  Friday (12/01/06) edition of The Dallas Morning News.

The first in the business section by Steve Brown (Another boomer wave is expected) describes some in the real estate market objecting to stories of the down turn in the national and to an extent the local real estate markets.  It appears these real estate professionals feel that by keeping quiet about the down turn that the market will recover to the ?unbridled exuberance? of the past few years.   Perhaps the record levels of foreclosures in north Texas should not be mentioned either.

Second, is a story on the front page ?Study Appraisals cost schools funds?
tells of a study by the ?Texas Association of Appraisal Districts? that states commercial appraisals are only 65% of actual value and residential only 85% of actual value. This should be viewed within the fact that, while valuations are capped by law at 10% per year, the appraisal districts continue to appraise residential values above this limit.  In my case 48% over 3 years or 16% per year.

They are the same people who opposed the proposed cap of 3% to 5% that earlier this year was approved in the Republican primary by tax-paying voters in a non-binding referendum.  I am not surprised about their comments on commercial properties considering hardly a week goes by without the Dallas City Council granting tax abatement to some well-financed developer for a special building project.  

Abatements are handed out by the city like candy at Halloween to developers. After all, Dallas is owned by developers who should not have to pay taxes for their projects when residential homeowners can.

The Third item is a letter to the editor bemoaning the constant negative news reporting on the Dallas Independent School District.  That reader seems not to be offended by the constant reporting of misdeeds, mismanagement and scandal that has plagued the district over the past several years because they have children in the DISD. They seem not to mind that their tax dollars are wasted by the DISD on a continual never-ending crusade ?for the good of the children? by these misdeeds.

Several closing thoughts:

Despite the downturn in the real estate market, I doubt this trend will be reflected in any valuation by the appraisal districts.  Their valuations only go one way -- up.

A statewide prohibition on the ability for local taxing agencies/governments to grant abatements to developers is long over due.  Such a statewide ban would level the municipalities' playing field to attract new developments in that they would not have to compete with other cities in granting more favorable abatements to attract developments to the city.  If no one can grant tax abatements to developers, all cities are on an equal footing.  After all, where would the developers go if no gives them an abatement?

Lower the appraisal cap to 3% to 5 % for residences with a guaranteed homestead exemption that increases the longer the owner resides in their home.  Even better, put the cap of 3% to 5% on the final tax bill (the amount of the check the taxpayer writes from one year to the next).  The government can jiggle around the valuation, rate or homestead exemption just as long as the total net result does not exceed 3% a year.  This would address the problem of fixing one leg of the residential property tax bill (rate, value, homestead) and government and/or appraisal district pulling out one of the other legs.

Perhaps the time has come for those who have children in public schools to start to pay some form of tuition.  This would give the parents a bigger stake in making sure that their monies are spent correctly and provide additional incentive towards their personal involvement with their child and their schools.

Perhaps then, they would not turn such a blind eye to the misdeeds of their school administrators.

David W. Tuthill