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CADs bring uniformity to tax process, impact school funding

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With protests near completion and local taxing entities adopting their 2022-23 tax rates, residents will see Grimes Central Appraisal District (GCAD) property tax bills hit their mailbox next month. For Chief Appraiser Mark Boehnke and staff, it’s been anything but a routine year with high valuations and a last-minute exemption withdrawal spiking protests.

Why a CAD?

The Texas Legislature created appraisal districts in 1979 in response to a “chronic and growing problem of inequitable and unfair taxation.” Until then each taxing entity - counties, cities, school districts, etc., appraised the properties within their boundaries. There was no uniformity and the value of a property often varied from taxing entity to taxing entity. Disputes had to be handled at the tax office of the taxing entity who levied the tax. The new legislation required a centralized agency be established in each county to appraise property for ad valorem tax purposes, a written tax code establishing appraisal standards, appeal procedures and it guaranteed each appraisal district was regularly reviewed by a state agency.

Independence

Boehnke’s office consists of a dozen clerical and appraisal staff. Distinctly separate from his offi ce is a board of directors (BOD) who are selected by the taxing entities. Their duties are primarily administrative in nature and include hiring the chief appraiser. It is the Appraisal Review Board (ARB), made up of citizens, who hear and make decisions on property owner protests. The Code of Judicial Conduct governs the conduct of judges and may serve as a guide for ARB members. A review of the Appraisal District Director’s Manual and the Appraisal Review Board Manual available on the Texas Comptroller’s website, reveals the steps the State has taken to avoid conflicts of interest among chief appraisers, directors, ARB members, elected o ffi cials, relatives and others.

Boehnke said, “The state is trying to make this as independent as possible. They don’t want the board of directors appointing the ARB. They don’t want us having any contact with the ARB members. We don’t talk to them.” According to Boehnke, at a protest hearing the property owner makes their case, the appraiser makes their case and the ARB makes the decision.

In addition to members of the appraisal district board of directors, officers or employees of the appraisal district who may not serve on the ARB are the members of a governing body or employees of a taxing unit or employees of the Comptroller’s office.

Boehnke continued, “They don’t want a representative of a taxing unit driving values up or driving values down.”

Appraisals and school funding

Tax Code Section 23.01 requires taxable property to be appraised at market value as of Jan. 1. In addition, the 1979 legislation requires that each appraisal district be reviewed every other year, the results of which can have an impact on state-provided school funding. The comptroller’s office is currently conducting their review of the Grimes CAD and results will be released Jan. 31, 2023.

Boehnke said, “Your school districts, through property taxes, collect only about half the money they need to run their schools. The other half of that money comes from the State of Texas. The State in their biennial budget, hands out money to the school districts. They want to be sure that every appraisal district has their values at 100% of market value. That’s where this study comes in. They come in to see that everybody is appraising at market value. They’re testing us because those results affect state funding.”

Boehnke explained that should he choose not to collect at 100%, not only would he would be breaking the law, but state funds would be withheld from the school districts.

He said, “That’s the hammer. That’s the stick they have over appraisal districts. ‘If you don’t meet the test, then we’re going to cut off the money to school districts.’ “ He added, “It’s getting more complicated each and every year.”

2021 protests

According to Boehnke, the final 144 protests will be heard Sept. 20, 22 and 29. The day before this Examiner interview, the ARB heard 46 protests in one day.

Assistant Chief Appraiser Shannon Sanders said, “It’s almost a miracle we’re able to get through all of this stuff. The magic number is 95%. We want to get to where less than 5% of our properties are under protest.” The decision of the Navasota ISD board of trustees to remove the Local Homestead Exemption Option (LOHE) impacted more than property owners. Boehnke said, “The day before the last day to protest was when we got the call they were going to do this. We were about to wrap up the year, and anytime there’s a change in a person’s tax liability, we have to send out new notices. We sent out almost 4,300. We got about 90 protests from that 4,300. It wasn’t going to surprise me if we got 1,000- 1,500.” A flyer in the second notice and the GCAD’s link to Dr. Stu Musick’s explanatory video proved helpful to taxpayers.

Defer to owner

According to Boehnke, interest rates and costs are pushing demand down.

He said, “On the flip side, everybody’s coming to Texas. Everybody is coming to our area and when you look around, I still say we’re the cheapest in our microcosm. We’re cheaper than Brazos, Washington, Waller and Montgomery. Instead of buying in College Station, they’re driving to King Oaks right across the line.” He continued, “I hear people all the time saying, ‘Instead of William Fitch, I’m driving to Navasota where I can get a bigger lot, more house for twothirds of the dollar amount and it’s not that bad a drive.’” As for how they obtain sales data, Boehnke said, “We beg, borrow and acquire from everybody.” Homebuyers are sent a letter requesting information about the sale price but they aren’t required to respond. His office talks with realtors, they go to website listings and look at loan notes.

Sanders said, “We look at all houses in a mass fashion rather than driving by your house taking pictures to see if you painted or put a new roof on.”

Boehnke said, “We’re not funded to do that. We do everything in mass, in models and by statistical analysis.”

According to Boehnke, less than 5% of protests actually go to the ARB.

He said, “Most of the time they meet with the appraiser and it gets settled. We have a happy customer. It’s the ones where we can’t reach an agreement, we’re too far apart, who come into the ARB.”

Sanders said, “Most people are not aware of what neighboring properties are selling for and most then agree with the valuation.”

As for the outcome of the nearly 5% who come before the ARB, Boehnke said, “I expect to win. If I’m not confi dent in the data I have, I’m going to defer to the property owner.”

ARB vacancy

In January 2020, the 76th Texas Legislature transferred appointment of ARB members from the BOD to district judges. In Grimes County, that is Judge Gary Chaney of the 506th Judicial Court. The five-member board has operated one down this year following a board member resignation. Members live in different areas of Grimes County from Iola to Anderson to Plantersville but at present none live within the Navasota city limits. Mayor Bert Miller has nominated several individuals to fill that vacancy and a decision may be forthcoming soon. According to the ARB Manual, there are no special qualifications to serve, and Sanders describes the ARB as “basically, a jury.”

During a protest hearing, Sanders said, “They (property owners) give their spiel and we give ours. They (ARB) give their decision. Every one of them could be from Bedias or from Navasota. They shouldn’t be swayed by where they’re from. They’re not here to be an activist or to protect their territory. They’re here to be an open-minded juror. That’s the way I see it.” ARB members serve twoyear terms and are required to take several training courses. Sanders reiterated that the chief appraiser does not appoint ARB members.

He said, “Any citizen can call the judge and say, ‘I’m interested in being on the ARB.’”