Last weekend, the National Association of Real Estate Editors (NAREE) awarded this series discussing state and local property taxes “Bronze” in their Best Series category. While originally published in May 2016, a year later nothing has alleviated our property tax increases.
Several weeks ago I wrote a pair of columns (here and here) about how the core math of Texas property taxes is fundamentally broken (and always has been). While, A+B=C, if “A” is patently wrong, how can “B” and “C” be accurate?
In this case, “A” is assessed property value, “B” is property tax rate and “C” is the revenue required to run the city and state. In Texas, without real estate transaction disclosure, “A” is always a bit of a crapshoot as DCAD pulls assessed values out of thin air. Now I’m sure there’s some enormous algorithm they use to calculate values (a bottle of Jack, a blindfold and a dart board?) but in the end, not having access to the actual selling prices of real estate in Texas hamstrings a meaningful conversation about taxation rates.
As it is, property tax assessment districts in Texas have higher rates (“B”) than are actually needed because they have no visibility into “A” valuations. Texas rates are high because the underlying assessed values are inaccurate.
Yesterday, the Dallas Morning News outlined how this year’s rate increases hit middle-income homes harder than higher income homes. Color me shocked! And yet, the middle class are just as vocal about keeping Texas’ system of non-disclosure in place.