Publisher’s Note: Nick Vonas’ excellent Guest Editorial is very timely, as local political activists are currently working with State Representative Steve Toth, Republican of Conroe, on legislation to require election of the policy-mkaing Montgomery Central Appraisal District Board of Directors.
Guest Writer Nick Vonas’ Introductory Comment: The Golden Hammer has been an integral part of pushing for reasonable reforms. For me, it has very kindly seen fit to publish my comments on the Montgomery Central Appraisal District (MCAD). Right now, the initial flurry of protests may have died down (my own ARB is still pending), but the problem is still in front of us. To that end, I’m hopeful that perhaps The Golden Hammer may publish these comments on election reform for appraisal Board of Directors. I’m aware that in the piece The Golden Hammer did on Peggy Hausman, there is reference to attempted 2017 legislation to address this election reform. My viewpoint is that this is overdue, and that hopefully our representatives, other The Golden Hammer commenters, local conservative groups, etc., can work together to get our elected representatives to focus upon this. I’m just one guy but I know there are many that can get behind this.
Although I’ll reference the excessive appraisal values within my particular neighborhood, I can safely say that many of the same issues noted here are experienced not only in Montgomery County, but throughout the entire State of Texas. I liken this to a disease that has spread into all areas – we are trying to treat the symptoms, but in my opinion we need to address the root cause – appraisal districts that do not answer to the general public and essentially are operating without public control.
A brief backdrop on the organization of our appraisal district here in Montgomery Central Appraisal District (MCAD), as established by the Texas Tax Code, is in order.
You receive a property appraisal compiled by the staff of the chief MCAD appraiser, central office in Conroe on Gladstell Street. Your appraisal is supposed to be the value based on fair and reasonable market values of properties similar to yours and in close proximity, and should also reflect current applicable exemptions, such as homestead, over-65, disabled, etc.
The chief appraiser is selected by and answers to an appraisal district board of directors (BOD). The district BOD members are, in turn, typically nominated by the taxing entities you see listed on your appraisal notice, such as city, county, community college(s), schools, hospitals, MUD, etc.
There are currently 6 individuals serving on the MCAD board. The county judge and county commissioners can also make a nomination, such as they did in 2019 for Peggy Hausman.
The chief appraiser prepares a ballot and those same taxing entities vote on BOD membership. Simply, it’s a closed loop election scenario with no public voting input.
Per the guidelines within the Texas Review Board Manual and State Tax Code, the BOD also selects individuals from the community to serve on the Appraisal Review Board (ARB). These are the persons, along with an MCAD representative, that you deal with when you go through an ARB review for your tax protest.
The ARB members are trained by MCAD. In my experience with ARB reviews, I have found the review members to be working to be fair, yet at the same time there is the culture of MCAD that permeates the proceedings.
Remember that, by Texas Tax Code, MCAD must present a “burden of proof” and a “preponderance of evidence” to substantiate their valuations and to prove that their valuations don’t exceed median values of comparable properties. In many cases, this requirement is not really highlighted at the review and it’s the property owner thinking they must provide that overwhelming evidence. What I have found is that I’m not just fighting a slightly higher appraisal, I’m fighting a ridiculous assessment value so even the “settlement” can easily land in the favor of the appraisal district.
If I don’t agree with the ARB decision, per my home value, I must pay $450 for binding arbitration with no guarantee of reimbursement even if I win, or I can file a lawsuit. Commercial property owners can pay up to $1550 or the arbitration.
Property owners often decide that the additional cost for arbitration or a lawsuit is less than the additional tax they will pay related to the increased appraisal values. So the excessive valuations march on thanks to this onerous process.
The other side of the coin relates to the taxes we pay. MCAD is quick to say that they are in the appraisal business, not the tax business, but I think this arms-length scenario is a smokescreen.
You cannot logically assume that an appraisal district established by local tax entities isn’t aware of the actions of those same entities. It’s a very convenient handshake.
Let’s say the City of Conroe decides to leave the tax rate the same or even reduce it slightly, yet your appraisal has increased from last year. Your net tax paid will increase, as that tax rate is based upon that appraisal value factored with any applicable exemptions.
The politicians look good – they kept the tax rate down – and the appraisal district can be the designated bad guy, which is fine because they don’t answer to the public. The taxpayer is the cash cow. And please keep in mind, this isn’t about paying a fair share, it’s about the continued push to support excessive valuations and bloated budgets.
Seniors don’t get a pass on this either, even if some of their tax rates are frozen for Over-65. Appraisals can and do increase, so combined with the same tax rate, their tax amount will increase.
Here’s a case in point – the appraised value on our lot (Land Value) increased 194% from 2019 to 2020. I took a random sampling of 45 properties of my neighborhood and found that the average Land Value increase was 217%! I’d like to know (my ARB is still pending) what possible “fair and equitable” assessment could possible increase land value by that ridiculous amount.
In my view there’s a sneaky aspect to the valuation process that MCAD has implemented in that, at the same time, they slightly reduced Improvements Values (your home), so that the overall assessment increase may be in the 2-3% percent range. In my case the overall increase was 6%. Furthermore, other than a passing reference to making up any pandemic economic-impact differences in 2021, there was zero incorporation of any pandemic impact in 2020 appraisals. In fact, many appraisals increased.
The same Tax Code that states appraisals are per January 1 values also states that the chief appraiser can make adjustments due to economic factors. MCAD statements were mailed out in April – plenty of time for MCAD systems to make any adjustments. But this didn’t happen, and I doubt seriously that 2021 appraisals will bring any relief, much less reductions.
Let’s look at the recent CISD bond that was passed last year. This isn’t about the children, it’s about the marketing. This bond was marketed as NO TAX INCREASE, especially to seniors. I’m 65 and didn’t buy this for a minute. What actually happened was that as my appraisal increased, my CISD tax will increase by $119 for 2020, if I cannot successfully resolve my protest. No tax increase? Hardly.
Many of my neighbors may look at their overall appraisal increase and shrug it off as part of living anywhere, but they’ve just opened the door to a significant tax impact to this and especially subsequent years. If that owner has accepted the overall assessment value, then they’ve just accepted that artificially inflated land value as well. So next year when the Improvements (home/garage/pool) assessment possibly also skyrockets, they are now faced with an excessive assessment – way beyond fair market value – for their property. Since the ridiculous land assessments are now in place, MCAD will want to use those assessments in their area comparable values, creating a sense of authenticity for those false values and further locking the property owner into excessive appraisals and resultant higher taxes. And the circle continues with no choice but to protest into a system that is leveraged towards the appraisal district.
Unless there is a significant change in this rigged system, the average property owner will be at the mercy of appraisals and taxes. The public needs to be involved in the selection of the appraisal district board of directors, yet the lobby opposition is fierce as tax entities guard their income.
In 2017, in the 85th Texas Legislature, a proposal was introduced to change the current tax entity selection of appraisal district board members to publicly elected board members. This proposal was passed by the Texas Senate but died in the House of Representatives after significant lobbying from the the Texas Municipal League and the Texas Association of Counties. Both are involved with protecting the interests of towns, cities, and counties. So who are our representatives representing?
The premise that the public is stupid and will short-change local and state budgets is not true. We are aware that our municipalities need taxes as a viable income source and simply look for accurate data and accountability to make reasonable decisions. We are also adamant that appraisal values should be fair and reasonable, not hundreds of percentage increases. Again, there is nothing wrong with paying a fair share for city and county services. But the current appraisal and taxing system has become its own closed-loop, self-perpetuating environment with a basic arrogance towards public intervention and an increasing greed factor.
I mentioned that we are constantly trying to treat the disease symptoms with the current protest process but we must address the root cause. Change is needed and accountability of tax appraisal boards must be shifted to the same public they drastically impact.
I urge you to contact your local and state representatives to move forward with re-energizing the 2017 proposal to publicly elect appraisal district board members before we are all appraised and taxed right out of our properties.