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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 Texas Comptroller’s 2003 Final Property Value Study. CADs achieved a study result of 99 percent of market value.

State law requires tax appraisals to be equal, uniform and at market value. The median appraisal ratio measures how close an appraisal district’s typical appraisal is to market value. The coefficient of dispersion (COD) measures appraisal uniformity, whether properties are being appraised at an equal percentage of market value. The statewide COD was 11.38, better than the previous year’s 11.49.

Table 14 shows the statewide median appraisal ratios from 1993 to 2003. Table 15 gives the statewide coefficients of dispersion for the same time period.

Table 14 - Statewide Median Appraisal Ratios - 1993 through 2003 Property Value Studies
The table below compares the statewide median appraisal ratios from the 1993 to 2003 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 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
A. Single-family Residences 98% 98% 98% 97% 97% 98% 98% 98% 97% 98% 99%
B. Multi-family Residences 100% 99% 99% 99% 98% 99% 98% 98% 99% 98% 98%
C. Vacant Lots 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
D. Rural Real 100%* 100%* 100%* 99%* 98%* 98%* 98%* 98%* 98%* 99%* 99%*
E. Farm & Ranch Improvements * * * * * * * * * * *
F1. Commercial Real 100% 100% 100% 99% 99% 99% 98% 97% 98% 98% 98%
F2. Industrial Real ** ** ** ** ** ** ** ** ** ** **
G. Oil, Gas, Minerals 104% 103% 102% 102% 101% 100% 102% 103% 99% 101% 100%
J. Utilities 100% 101% 102% 99% 100% 100% 100% 100% 100% 100% 100%
L1. Commercial Personal 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
L2. Industrial Personal ** ** ** ** ** ** ** ** ** ** **
M. Other Personal ** ** ** ** ** ** ** ** ** ** **
O. Residential Inventory ** ** ** ** ** ** ** ** ** ** **
OVERALL 99% 99% 100% 99% 99% 99% 99% 99% 99% 100% 99%
* Beginning in 1989, taxable values for Farm & Ranch Improvements (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.

Table 15 - Statewide Coefficients of Dispersion 1993 through 2003 Property Value Studies
The table below compares the statewide coefficients of dispersion from the 1993 to 2003 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 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
A. Single-family Residences 12.93 10.74 12.11 11.36 11.06 9.68 9.23 10.05 10.68 10.33 9.48
B. Multi-family Residences 12.66 8.38 10.06 8.43 7.71 7.34 7.63 7.70 8.91 8.74 10.49
C. Vacant Lots 22.01 19.27 18.21 19.86 17.10 15.17 13.68 14.79 17.29 18.50 18.07
D. Rural Real 16.31* 18.49* 14.92* 14.60* 15.62* 16.09* 14.51* 14.96* 15.64* 15.01* 16.65*
E. Farm & Ranch Improvements * * * * * * * * * * *
F1. Commercial Real 14.38 12.59 13.28 11.34 11.01 10.51 10.59 10.56 10.39 9.82 10.93
F2. Industrial Real ** ** ** ** ** ** ** ** ** ** **
G. Oil, Gas, Minerals 11.20 13.01 12.61 18.95 4.85 7.38 20.52 7.15 31.30 11.50 10.46
J. Utilities 14.18 14.35 12.50 ME 10.76 9.64 12.78 12.26 12.00 11.72 11.66
L1. Commercial Personal 10.83 8.14 11.95 20.73 11.20 9.24 7.52 8.19 8.32 8.44 8.21
L2. Industrial Personal ** ** ** ** ** ** ** ** ** ** **
M. Other Personal ** ** ** ** ** ** ** ** ** ** **
O. Residential Inventory ** ** ** ** ** ** ** ** ** ** **
OVERALL 13.97 12.86 13.17 13.47 11.64 10.86 11.79 11.53 12.26 11.49 11.38
* Beginning in 1989, taxable values for Farm & Ranch Improvements (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: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division

Appraisal District Workload

Texas Comptroller Carole Keeton Strayhorn reported on appraisal district operations in the agency’s Appraisal District Operations Report–2003 and 2004. The Comptroller’s Property Tax Division (PTD) surveyed the 253 appraisal offices to obtain data about final 2003 operations and projected 2004 budgets and plans.

Texas’ 253 CAD offices appraised more than 16 million pieces of property for 3,743 taxing units in tax year 2003. That meant working about 389,000 additional properties and 25 more taxing units than tax year 2002. The CADs did their job with final operating expenses of about $272 million, a 6 percent increase over 2002. The result was a total reported $1.4 trillion of appraised market value for all Texas properties.

While Texas has 254 counties, the Potter and Randall CADs form a single appraisal office in Amarillo, with one budget and staff.

Of the 388,678 new property accounts, the largest increase occurred in real property accounts. CADs added 236,755 accounts to reach a total of 11,545,622 real property accounts. Mineral property accounts increased by 148,030 to total more than 3 million accounts. Business personal property accounts added 11,071 accounts for a total of 1,167,664.

Taxable non-business personal property decreased by 7,178 accounts, or about 4 percent, to reduce that group of properties to 173,157 accounts. That decrease resulted from the repeal of the school tax on personal travel trailers in 2003.

Almost half of Texas’ taxable property accounts are concentrated in 22 of the 253 CADs. These 22 CADs appraise more than150,000 accounts. Six of these 22 CADs handled more than 27 percent of all taxable property accounts, up from 21 percent in the preceding year’s survey. These six districts each have more than 300,000 accounts and include 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. Numerous CADs reappraise property every year. For the 2003 tax year, 179 CADs, about 70 percent, completed reappraisals, while 147 CADs planned to reappraise for the 2004 tax year.

For tax year 2003, CADs mailed more than 9 million appraisal notices, of which almost all contained estimated taxes on the proposed taxable values. Only about 7,500 notices were a “shorter” version with no estimated taxes, allowed by Tax Code Section 25.19(i).

CADs send property owners appraisal notices if the owners’ property values are higher than the previous year, higher than the owners’ rendered value or new to the appraisal roll. CADs send the “shorter” version to all properties during a reappraisal year, for ownership changes or upon requests from property owners or their agents.

Property owners filed almost 22 percent more written protests for 2003 property values than in the previous year on 2002 values. Statewide, CADs reported 751,290 protests in 242 CADs, compared to 734,941 protests in 247 CADs in 2002. More than half of the protests were settled through an informal process. Some 435,276 of the protesting taxpayers met with CAD staff in informal hearings to attempt a settlement without continuing to a formal ARB hearing.

ARBs scheduled 359,743 formal hearings for these filed protests, a decrease of almost 20,000 hearings or about 6 percent fewer hearings than in 2002. One-third of the taxpayers, almost 175,000, were “no shows” for their scheduled hearing. In 2002, about 36 percent were “no shows.”

Taxing units also may file written challenges to the ARB if they disagree with CAD decisions. In 2003, four taxing units—compared to eight in 2002—filed challenges.

Table 16 highlights the appraisal district workload for the 22-year period from 1982 through 2003.

Table 16 - 22-Year Review of Appraisal District Workload
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
2003 16,007,636 9,088,784 4 359,743
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Appraisal District Expenditures

Final 2003 CAD operating expenses totaled $272 million, or an average of $17.00 per property account. With 6 percent more in expenses than in 2002, the average 2003 CAD operating budget exceeded $1 million. The previous year’s average cost per account was 33 cents less at $16.67 per account.

The 2003 expenditures varied by CAD size. The lowest cost per property account was Panola CAD at $2.28 per property account. At the other end, Kenedy CAD reported the highest cost at $56.15 per account. Crockett CAD did not report an operating budget; the Crockett County Tax Office operates the appraisal office.

Since local taxing units fund CAD budgets, the taxing units may veto the CAD budget adopted by the CAD’s board of directors. Taxing units in two CADs—Childress and Lee CADs—vetoed their 2004 budget, as allowed by Tax Code Section 6.06.

Local taxing units pay the CAD 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 $25.5 billion in 2002 to almost $28 billion in 2003. Less than 1 percent of property taxes levied goes to pay CAD operating expenses.

Table 17 details the average cost per parcel and total budgets for appraisal districts from 1982 through 2003. Table 18 details the average 2003 expenses of appraisal districts by size of the districts.

Table 17 - Appraisal District Spending, 1982-2004
While CAD budgets have risen on an average cost per account in the past 22 years, the CADs received a smaller percentage of the taxes levied by taxing units.
Year Average Cost Per Account Total Spent Percent Change 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%
2003 $17.00 $272.2 million +6.12% 0.97%
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Table 18 - 2003 CAD Spending by Size
While the average 2003 cost per account statewide was $17.00, 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 2003 Expenses Average Cost Per Account
Below 5,000 5 $62,192 $15.49
5,000 to 9,999 22 $123,023 $15.40
10,000 to 14,999 30 $156,703 $13.13
15,000 to 19,999 24 $220,187 $12.56
20,000 to 24,999 16 $312,480 $14.15
25,000 to 34,999 47 $466,868 $15.28
35,000 to 49,999 37 $510,442 $12.12
50,000 to 74,999 28 $784,400 $12.87
75,000 to 149,999 22 $1,661,797 $15.13
150,000 to 300,000 16 $3,142,482 $15.43
Over 300,000 6 $17,425,299 $24.29
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Consolidated Collections

While all CADs appraise property, some CADs have additional duties for assessing or collecting property taxes. In 2003, 142 CADs also performed the assessing functions, including calculating effective and rollback tax rates, publishing required notices and preparing tax bills.

Some 111 CADs also collect property taxes, down from 113 CADs in 2002. Although the number of CADs collecting has dropped, the number of taxing units receiving collection services from CADs increased to 917 units in 2003, up from 905 taxing units in 2002.

CADs that collect taxes establish a separate collection budget. These CADs budgeted an average of $126,640 to perform the 2003 collection function. CAD collection budgets ranged from as low as $2,600 to $897,030, with an average cost per parcel to collect of 37 cents, down from 39 cents in 2002.

Consolidation of all property tax collections for all taxing units into one office occurred in 130 counties; that’s 16 more counties than 2002. The single collecting office included 69 CAD offices, 60 county tax offices and one city that collected property taxes for all taxing units in the county.

Only about 367 taxing units collect only their own taxes as more taxing units move to consolidated collection offices. In 2002, 382 units collected their own taxes.

Table 19 compares consolidated collections for tax years 2002 and 2003. For more data on collections, see Appendix G.

Table 19 - Who Collects and for Whom
2002 Collecting Office and Units Served 2003 Collecting Offices and Units Served
165 counties for 1,817 taxing units 163 counties for 1,847 taxing units
113 CADs for 905 taxing units 111 CADs for 917 taxing units
4 cities for 30 taxing units 5 cities for 33 taxing units
42 school offices for 120 taxing units 40 school offices for 118 taxing units
1 special district for 3 taxing units 1 special district for 3 taxing units
48 private firms for 486 taxing units 46 private firms for 501 taxing units
373 offices collecting for 3,361 units 366 offices collecting for 3,419 units
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.