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Part III:
Appraisal Districts

County appraisal districts (CADs) continue to appraise property with uniform results and close to market value, according to the Comptroller’s 2002 Final Property Value Study. CADs achieved a study result of 100 percent of market value, after holding at 99 percent for the previous six studies.

State law requires tax appraisals to be equal, uniform and at market value. The median appraisal ratio measures how close a CAD’s typical appraisal is to market value. The coefficient of dispersion measures appraisal uniformity, whether properties are being appraised at an equal percentage of market value. The statewide coefficient of dispersion was 11.49, better than the previous year’s 12.26.

Table 15 shows the statewide median appraisal ratios from 1992 to 2002. Table 16 gives the statewide coefficients of dispersion for the same time period.

Table 15: Statewide Median Appraisal Ratios
1992 through 2002 Property Value Studies
The table below compares the statewide median appraisal ratios from the 1992 to 2002 Property Value Studies. The statewide median appraisal ratio for an individual property category was calculated using the appraisal ratios of all Property Tax Division sample properties in that category from across the state. The overall statewide median appraisal ratio was calculated using the appraisal ratios for all sample properties.
Property Category 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
A. Single-Family Residential 0.98 0.98 0.98 0.98 0.97 0.97 0.98 0.98 0.98 0.97 0.98
B. Multi-Family Residential 1.00 1.00 0.99 0.99 0.99 0.98 0.99 0.98 0.98 0.99 0.98
C. Vacant Lots 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
D. Acreage (market value) 1.00* 1.00* 1.00* 1.00* .99* .98* .98* 0.98 0.98* 0.98* 0.99*
E. Farm & Ranch Improvements * * * * * * * * * * *
F1. Commercial Real 0.99 1.00 1.00 1.00 0.99 0.99 0.99 0.98 0.97 0.98 0.98
F2. Industrial Real ** ** ** ** ** ** ** ** ** ** **
G. Oil, Gas & Minerals 1.02 1.04 1.03 1.02 1.02 1.01 1.00 1.02 1.03 0.99 1.01
J. Utilities 1.02 1.00 1.01 1.02 0.99 1.00 1.00 1.00 1.00 1.00 1.00
L1. Commercial Personal 0.98 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
L2. Industrial Personal ** ** ** ** ** ** ** ** ** ** **
M. Other Personal ** ** ** ** ** ** ** ** ** ** **
O. Residential Inventory ** ** ** ** ** ** ** ** ** ** **
OVERALL 0.99 0.99 0.99 1.00 0.99 0.99 0.99 0.99 0.99 0.99 1.00
* Beginning in 1989, taxable values for Farm & Ranch Improvements (formerly Category E) were merged into Category D with Acreage (market value).
** Too few sample observations were available to produce meaningful statewide median appraisal ratios for these properties.
Source: Comptroller's Property Tax Division


Table 16: Statewide Coefficients of Dispersion
1992 through 2002 Property Value Studies
The table below compares the statewide coefficients of dispersion from the 1992 to 2002 Property Value Studies. The statewide coefficient of dispersion for an individual property category was calculated using the appraisal ratios of all Property Tax Division sample properties in that category from across the state. The overall statewide coefficient of dispersion was calculated using the appraisal ratios for all sample properties.
Property Category 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
A. Single-Family Residential 13.12 12.93 10.74 12.11 11.36 11.06 9.68 9.23 10.05 10.68 10.33
B. Multi-Family Residential 10.84 12.66 8.38 10.06 8.43 7.71 7.34 7.63 7.70 8.91 8.74
C. Vacant Lots 22.66 22.01 19.27 18.21 19.86 17.10 15.17 13.68 14.79 17.29 18.50
D. Acreage (market value) 15.50* 16.31* 18.49* 14.92* 14.60* 15.62* 16.09* 14.51* 14.96* 15.64* 15.01*
E. Farm & Ranch Improvements * * * * * * * * * * *
F1. Commercial Real 15.80 14.38 12.59 13.28 11.34 11.01 10.51 10.59 10.56 10.39 9.82
F2. Industrial Real ** ** ** ** ** ** ** ** ** ** **
G. Oil, Gas & Minerals 9.41 11.20 13.01 12.61 18.95 4.85 7.38 20.52 7.15 31.30 11.50
J. Utilities 17.28 14.18 14.35 12.50 ME 10.76 9.64 12.78 12.26 12.00 11.72
L1. Commercial Personal 16.36 10.83 8.14 11.95 20.73 11.20 9.24 7.52 8.19 8.32 8.44
L2. Industrial Personal ** ** ** ** ** ** ** ** ** ** **
M. Other Personal ** ** ** ** ** ** ** ** ** ** **
O. Residential Inventory ** ** ** ** ** ** ** ** ** ** **
OVERALL 14.58 13.97 12.86 13.17 13.47 11.64 10.86 11.79 11.53 12.26 11.49
* Beginning in 1989, taxable values for Farm & Ranch Improvements (formerly Category E) were merged into Category D with Acreage (market value).
** Too few sample observations were available to produce meaningful statewide coefficients of disperson for these properties.
Source: Comptroller's Property Tax Division

Appraisal District Workload

The Comptroller’s 2002 and 2003 Appraisal District Operations Report showed that the state’s 253 CAD offices served 3,743 taxing units with almost 16 million taxable property accounts. Total statewide cost for CAD operations was about $270.5 million. Potter and Randall CADs form a single appraisal office in Amarillo, with one budget and staff.

From 2001 to 2002, the total number of taxable parcels or accounts increased statewide by 233,045 parcels for a total parcel count of almost 16 million parcels. CADs vary in how they divide and consolidate properties into parcels, particularly personal property accounts. These variations may affect the total parcels reported.

The greatest increase in number of parcels occurred with mineral property. CADs added 103,373 mineral accounts — an increase of about 4 percent — to reach a total of 2,973,163 parcels. The number of real property parcels (land and buildings) increased by 59,797 parcels — to total more than 11 million parcels. Business personal property accounts saw an increase of more than 4 percent, adding 48,535 parcels. Business personal property accounts totaled 1,156,593.

Unlike 2002, CADs reported 13 percent more taxable non-business personal property accounts. In 2001, the only category of property that decreased in number of accounts was this category. CADs reported an increase of 21,340 non-business personal property accounts to 180,335 accounts.

In Texas, 21 of the 253 CADs appraise 150,000 or more taxable parcels, representing almost 46 percent of all taxable property parcels. Of these 21 districts, six CADs have more than 300,000 parcels and represent almost 21 percent of all taxable properties -- down from 27 percent in 2002. The six largest districts with more than 300,000 parcels, in order beginning with the largest, are Harris, Dallas, Tarrant, Bexar, El Paso and Travis CADs.

State law requires CADs to reappraise property in their districts at least once every three years. For the 2002 tax year, 189 CADs, or 75 percent, completed reappraisals, while 144 CADs planned to reappraise for the 2003 tax year.

For tax year 2002, CADs mailed more than 9 million appraisal notices, of which almost all contained estimated taxes on the proposed taxable values. Only about 17,000 notices were a “shorter” version allowed by Property Tax Code Section 25.19(i), with no estimated taxes. Most CADs mailed these reappraisal notices in May or earlier.

Property owners filed almost 12 percent more written protests than in the previous year, for a state total of 734,941 protests in 247 CADs. In 2001, officials reported a total of 658,575 protests reported by 244 CADs. About 64 percent of the protesting taxpayers met with CAD staff in informal hearings to attempt a settlement without continuing to a formal ARB hearing.

Appraisal review boards (ARBs) scheduled 379,325 formal hearings for these filed protests — an increase of 72,489 formal hearings or about 24 percent from last year. More than 139,497 taxpayers, however, did not attend their scheduled hearing, representing almost a 36-percent “no show” rate. In 2001, about 40 percent were “no shows.”

Taxing units also may file written challenges if they disagree with CAD decisions. In 2002, eight taxing units — compared to only two units in 2001 — filed challenges.

Table 17 highlights the appraisal district workload for the 21-year period from 1982 through 2002.

TABLE 17 - Twenty-One Year Review of Appraisal District Workload
In 2002, CADs mailed fewer appraisal notices but scheduled more ARB hearings than in 2001.
Year Taxable Parcels Appraisal Notices Sent Taxing Unit Challenges ARB Hearings Scheduled
1982 10,811,817 6,509,076 235 52,707
1983 11,736,724 2,978,839 88 33,875
1984 12,206,774 4,629,682 270 151,144
1985 12,568,931 4,731,365 66 91,665
1986 12,803,055 4,428,225 106 125,246
1987 12,786,518 5,054,336 184 163,085
1988 12,937,341 3,977,007 39 170,711
1989 13,225,514 4,160,375 156 157,947
1990 13,139,219 7,191,615 32 178,124
1991 13,518,442 7,199,515 193 209,889
1992 13,320,845 7,465,478 36 196,503
1993 13,546,649 8,383,541 154 166,056
1994 13,723,699 7,810,313 10 218,538
1995 14,099,466 8,241,057 5 195,097
1996 14,304,085 7,654,301 19 189,769
1997 14,617,741 7,586,079 4 149,771
1998 14,847,469 8,160,120 3 189,622
1999 14,756,523 8,743,293 8 248,526
2000 15,022,588 8,420,244 18 234,691
2001 15,385,913 9,364,893 2 306,836
2002 15,618,958 9,068,428 8 379,325
Source: Comptroller's Property Tax Division

Appraisal District Expenditures

In final 2002 expenses, CADs spent a total of about $257 million, or an average of $16.48 per parcel to appraise. These expenditures were about 6 percent more than in 2001. The average 2002 CAD operating expenses were $1,017,132.

The 2002 expenditures per parcel varied. The lowest per parcel was Crockett CAD at $0 per parcel. Crockett CAD does not report its expenditures separately from the Crockett County Tax Office. At the other end, Somervell CAD reported the highest cost per parcel at $40.69.

CAD budgets payments by taxing units are allocated based on the property taxes levied by each taxing unit in comparison to the total taxes of all units within the CAD. CADs reported that the total tax levy used to allocate their budgets increased from $24 billion in 2001 to almost $25.5 billion in 2002. About 1 percent of property taxes levied goes to pay CAD operating expenses.

Table 18 details the average cost per parcel and total budgets for appraisal districts from 1982 through 2002. Table 19 details the average 2002 expenses of appraisal districts by size of the districts.

TABLE 18 - Appraisal District Spending, 1982-2002
While CAD spending has risen on an average cost per account in the past 21 years, the CADs received a smaller percentage of the taxes levied by taxing units.
Year Average Cost Per AccountTotal Spent PercentChange from Previous Year Spending as Percent of Taxes Levied
1982 $10.25 $110.8 million 1.69%
1983 $10.47 $122.9 million + 10.92% 1.70%
1984 $10.69 $130.5 million + 6.18% 1.61%
1985 $10.92 $137.2 million + 5.13% 1.53%
1986 $10.91 $139.7 million + 1.82% 1.45%
1987 $10.96 $140.1 million + 0.29% 1.41%
1988 $11.44 $148.1 million + 5.71% 1.41%
1989 $11.52 $152.4 million + 2.90% 1.37%
1990 $12.00 $157.7 million + 3.48% 1.32%
1991 $12.25 $165.6 million + 5.00% 1.10%
1992 $12.80 $170.5 million + 2.96% 1.23%
1993 $12.89 $179.0 million + 2.40% 1.19%
1994 $13.10 $179.8 million + 2.98% 1.17%
1995 $13.11 $184.7 million + 2.73% 1.18%
1996 $13.16 $188.2 million + 1.89% 1.13%
1997 $13.42 $196.2 million + 4.24% 1.14%
1998 $13.66 $203.5 million + 3.72% 1.12%
1999 $14.74 $217.5 million + 6.88% 1.10%
2000 $15.14 $227.5 million + 4.60% 1.04%
2001 $16.09 $241.7 million + 6.24% 1.01%
2002 $16.67 $256.5 million +6.12% 1.01%
Source: Comptroller’s Property Tax Division

TABLE 19 - 2002 CAD Spending by Size
While the average 2002 cost per account statewide was $16.48, grouping the CADs by account sizes shows the cost per account varies - with the largest group of districts exceeding the state average.
Number of Accounts Number of Districts Average 2002 Expenses Average Cost Per Account/Parcel
Below 5,000 4 $56,948 $12.65
5,000 to 9,999 28 $117,282 $14.13
10,000 to 14,999 25 $160,441 $12.80
15,000 to 19,999 26 $212,647 $12.06
20,000 to 24,999 17 $291,504 $13.10
25,000 to 34,999 45 $424,023 $14.84
35,000 to 49,999 39 $488,846 $11.55
50,000 to 74,999 24 $809,692 $13.39
75,000 to 149,999 24 $1,405,697 $13.40
150,000 to 300,000 15 $3,090,216 $15.41
Over 300,000 6 $16,718,118 $23.80
Source: Comptroller’s Property Tax Division

Consolidated Collections

In 2002, 147 CADs also perform assessment functions, the same as 2001. Assessment functions include calculating effective and rollback tax rates, publishing required notices and preparing and mailing tax bills.

Some 113 CADs also collect property taxes. The number of CADs collecting taxes for taxing units is the same as in 2002. The number of taxing units receiving collection services from CADs increased from 899 taxing units in 2001 to 905 units in 2002.

CADs that collect establish a separate collection budget. These CADs budgeted an average of $123,534 to perform the 2002 collection function, about a 1 percent increase from the preceding year. CAD collection budgets ranged from as low as $2,600 to $896,382, with an average cost per parcel to collect of 39 cents.

In 2002, eight CADs also collected property taxes for multi-county taxing units for which they did not appraise these taxing units’ property.

The survey also asked CADs to report on other taxing units that offer consolidated collection services in their districts. Some 165 county tax offices collect for 1,817 taxing units. Other taxing units used private companies to collect taxes. In 2002, there were 48 private companies collecting for 486 taxing units, compared to 48 companies collecting for 481 units in 2001.

Consolidation of all property tax collections for all taxing units into one office occurred in 114 CADs — five more than 2001. The single collecting office in these CADs included 59 CAD offices, 54 county tax offices and one city that collected for all taxing units in that county.

Only about 382 taxing units still collect only their own taxes as more taxing units move to consolidated collection offices. In 2001, 425 units collected their own taxes.

Table 20 compares consolidated collections for tax years 2001 and 2002. For more data on collections, see Appendix G.

TABLE 20 - Who Collects and for Whom
2001 Collecting Office and Units Served 2002 Collecting Offices and Units Served
167 counties for 1,751 taxing units 165 counties for 1,817 taxing units
113 CADs for 899 taxing units 113 CADs for 905 taxing units
4 cities for 31 taxing units 4 cities for 30 taxing units
42 school offices for 128 taxing units 42 school offices for 120 taxing units
1 special district for 3 taxing units 1 special district for 3 taxing units
48 private firms for 481 taxing units 48 private firms for 486 taxing units
375 offices collecting for 3,293 units 373 offices collecting for 3,361 units
Source: Comptroller’s Property Tax Division