Image: Toby Powell (left), shown with his wife, clearly stands more valiantly for the citizens of Montgomery County than anyone. Unfortunately, his lawsuit against Montgomery Central Appraisal District Chief Appraiser Tony Belinoski and Tax Assessor-Collector Tammy McRae will face serious legal challenges.
The Golden Hammer Staff Reports
Conroe, May 18 – This past Friday afternoon, May 15, 2020, Toby Powell, who is the Mayor of Conroe, filed a lawsuit in the 284th District Court of Montgomery County, Judge Kristin Bays presiding, against Montgomery Central Appraisal District Chief Appraiser Tony Belinoski and Montgomery County Tax Assessor-Collector Tammy McRae. Powell, who is a genuinely kindhearted and popular man who has every want to fight for the citizens, faces serious legal impediments to his lawsuit.
In the lawsuit, Powell basically seeks a declaration from the District Court that:
- (1) “the Appraisal District has the legal duty to re-assess the [tax appraisal] values of each property in the county based on the sudden and precipitous loss in market values [from the Chinese Coronavirus crisis which the government has precipitated] that occurred in the weeks and months after January 1, 2020 but before the [tax appraisal] values were reported to property owners on or about April 15, 2020.”
- (2) “the values as originally reported on April 15, 2020 for substantially all of the properties in Montgomery County are inaccurate because of the sudden and precipitous loss in market value that occurred after January 1, 2020 and that any taxes assessed based on those values would be inaccurate, inflated and constitute an illegal tax.”
Powell wants the District Court to order Chief Appraiser Belinoski to reappraise all properties in Montgomery County to take into account the precipitous drop in values due to the government-mandated shutdowns from the Chinese Coronavirus panic among government officials who believed the scare tactics of the United States Centers for Disease Control. In his lawsuit, Powell explains:
“On January 1, 2020 the local economy was booming, continuing a trend since 2013. As Montgomery County and the United States moved into the year 2020 with optimism, almost no one could have predicted the COVID-19 crisis and how it would devastate the economy. It has had a worldwide impact but has hit the United States especially hard. Because of government-mandated shutdowns of non- essential activities and businesses unemployment in the United States went from a historic low of 3.0% up to 14.7 percent in just five months. The last time the national unemployment rate was as high as 14.7 percent was during the Great Depression of the 1930’s. Montgomery County and the State of Texas have not been immune to the crisis. Thousands of county residents have been without work because their businesses and employers were forced to close, at least for a time. They have lost tens of thousands of dollars in revenue and months of work they will never recover.”
Powell makes an excellent point that actual land values for residential and commercial land have most assuredly dropped enormously since the government shutdowns and the giant impact those shutdowns have had on the local and national economy.
Powell sued McRae to attempt to force her to stop collection of taxes. What a wonderful legal mechanism it would be, if a citizen could file and prevail in such a suit to stop the government from collection of taxes!
Unfortunately, Powell faces a mighty uphill battle for his lawsuit to survive early legal challenges, which the Montgomery County government and the MCAD will very likely assert to seek a quick dismissal of the lawsuit.
Powell has made some great points in his claims against the government. But his lawsuit suffers from three major shortcomings:
(1) Sovereign immunity. Under Texas law, a citizen cannot sue the government, unless the government has consented to the lawsuit first. The doctrine of “sovereign immunity” stands for the proposition that “the king can do no wrong.” Courts in Texas, under well developed statutory frameworks and almost two centuries of legal precedent, may not adjudicate claims against the government without an express waiver by the government to permit such a lawsuit. There is no such waiver, which the Texas Legislature passed and which the Governor signed into law, to allow this type of claim against governmental entities, such as MCAD or the Montgomery County government which McRae represents in her official capacity.
The likelihood is that MCAD and the County will file motions to dismiss the lawsuit for lack of subject matter jurisdiction and that the District Court will follow current law and grant such motions. That doesn’t mean it’s right, but it’s the law.
(2) No standing. Legal precedent from two centuries of Texas law and from half a millennium of British common law make clear that an individual taxpayer may not sue to lower taxes on behalf of all other citizens. In other words, Powell lacks standing to bring a lawsuit on his own or on behalf of all other citizens, as a class action, complaining about his property taxes. Powell’s lack of standing would also likely be the subject of a property motion to dismiss.
(3) Failure to exhaust administrative remedies. It may be unfair, but it’s the law in Texas. In fact, in his lawsuit, Powell even acknowledges and makes some great points as follows:
“Chapter 43 of the Tax Code provides the only method a taxpayer may use to avoid an increase in the value of their property if the appraiser concludes it has increased in value. Prior to May 15 in a given tax year the property owner must file a written protest with the appraisal district if they wish to contest the value placed on their property. Protesting involves a multiple-step process that is time consuming out of all proportion to the results usually achieved. For example, the taxpayer must usually first meet with a staff appraiser, at which point they may reach an informal settlement. If the taxpayer is still not satisfied they are entitled to a hearing before an appraisal review board. If they are still not satisfied they must sue in district court, which has the ultimate power to decide the value of their property, but only for the year in which they protested. If the appraisal district continues to over-value their property in subsequent years they are required to navigate the protest process each year. It can be a never-ending process and many homeowners do not have the time or knowledge of appraisal practices to effectively represent themselves in the process.”
That, however, is the problem. The Texas Legislature has made clear that there is only one method under Texas law by which a taxpayer may avoid an increase in value of his or her property: through the appraisal protest process provided for, in detail, in the Texas Tax Code. A District Court, such as Judge Bays’ 284th District Court, simply cannot legislate from the bench and create new law to circumvent the clear statutes the Texas Legislature has enacted to create the sole means of protesting taxes.
An individual taxpayer may file a protest and even eventually file a lawsuit, if he follows the protest procedures and is unhappy with them. He may not circumvent the specifically-required procedures by filing a class-action lawsuit on behalf of every taxpayer, even though they didn’t file written protests, as the Texas Tax Code requires.
Powell has made some great points. The property tax appraisal process in Texas suffers from deep flaws and fundamental procedural and substantive unfairness. Sadly, Powell will have to take his fight to another venue: the Texas Legislature when it convenes in January, 2021.