Chapter 1
Findings of the Property Value Study and Summary
Overview of Property Value Study
The annual PVS estimates the total taxable property value in each school district in Haskell CAD. With a few notable exceptions, the law requires all CADs and PTD to appraise property at market value. Market value, in essence, is the price a willing buyer would pay a willing seller for the property under normal conditions. Agricultural land and timberland, however, are appraised according to the productivity value of the land's category.
The CAD determines the local appraisal roll value and certifies it to each school district; these values become the districts' tax roll values. Each school district must submit an annual self-report of its property values to PTD, which audits the reports for accuracy.
PTD's estimate of the total taxable value in a school district, called the state value, is made by estimating market value or by accepting the local appraised value in each property category and then adding these category values for an overall school district value. PTD then deducts the school district's self-reported, state-mandated homestead exemptions, disabled veterans exemptions, value limitations, reinvestment zones, freeport exemptions, the loss between market value and productivity value of qualified agricultural lands, the school tax ceiling for homeowners over age 65 or with a disability and other state-mandated exemptions.
PTD issues a preliminary and a final PVS each year. School districts and CADs may protest the findings of the preliminary PVS through an administrative hearings process. This process requires the protester to file a written protest with supporting documentation within 40 days of the issuance of the preliminary PVS. PTD may amend the findings of the preliminary PVS based on the submission of a written protest, a conference between PTD and CAD representatives or a formal hearing. A hearings examiner appointed by the Comptroller's general counsel holds the formal hearing; this person is not a PTD employee. A school district that disagrees with the hearing examiner's final decision may appeal it to Travis County district court.
When conducting the property value study, PTD assigns properties to various categories, such as residential, commercial and rural property, so like properties can be studied together.
In general, a ratio indicates the percentage of market value, as determined by PTD, at which a CAD appraises a property or group of properties. A ratio of 1.0 indicates appraisal at market value–the legal standard. Generally, appraisals with ratios that are close to the standard, for instance between 0.95 and 1.05, are considered reasonably accurate for a property group.
Eligible School Districts
The 2006 PVS identified Haskell CISD as an eligible ISD when its local value fell outside the study's statistical margin of error. The statistical margin of error or confidence interval is a range of school district values that the Comptroller has accepted.
Six property categories were tested in Haskell CISD:
- Category A, Single-Family Residential;
- Category D, Rural Real;
- Category F1, Commercial Real;
- Category G, Minerals;
- Category J, Utilities; and
- Category L1, Commercial Personal.
Category A, single-family properties, made up 38 percent of the total test value and 33 percent of the ISD's value. A review of the Category A sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 61 percent to a high of 192 percent of market value, with a weighted mean ratio of 0.9301.
Category D, rural real properties, made up 31 percent of the total test value and 26 percent of the ISD's value.
Rural properties include two subcategories: productivity value of qualifying acres (D1), which is primarily farm and ranch land that qualifies for the special productivity appraisal; and non-qualifying acres and farm and ranch improvements (D3), which are primarily rural homes and land that do not qualify as farm, ranch or timberlands. The differences in value between qualified and non-qualified rural land are wide since qualified land is appraised using a special statutory method to determine the land's productivity value, and non-qualified property is based on what the land would sell for in an open-market transaction.
Subcategory D1 made up 24 percent of the total test value and 21 percent of the ISD's value. The weighted mean ratio of the qualified rural values tested was 0.9519.
Subcategory D3 made up 7 percent of the ISD's test value and 5 percent of the school district's value. The CAD appraised rural homes and non-qualified rural land from as low as 27 percent to a high of 251 percent of market value, with a weighted mean ratio of 0.4753.
Category F1, commercial real properties, made up 7 percent of the total test value and 6 percent of the ISD's value. A review of the Category F1 sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 83 percent to a high of 297 percent of market value, with a weighted mean ratio of 1.0122.
Category G, oil, gas and minerals, made up 12 percent of the total test value and 10 percent of the ISD's value. A review of the Category G sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 86 percent to a high of 113 percent of market value, with a weighted mean ratio of 1.0008.
Category J, utility properties, made up six percent of the total test value and 14 percent of the ISD's value. A review of the Category J sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 97 percent to a high of 110 percent of market value, with a weighted mean ratio of 0.9806.
Category L1, commercial personal properties, made up 6 percent of the total test values and 5 percent of the ISD's value. A review of the Category L1 sample ratios in the 2006 PVS indicates that the CAD appraised from as low as 84 percent to a high of 118 percent of market value, with a weighted mean ratio of 0.9890.
Haskell CISD received a valid finding in the preliminary 2007 PVS. Haskell CAD's other school districts, Rule ISD and Paint Creek ISD, fell below the confidence interval in Category A, Single-Family Residential, and Category D1, Productivity Value of Qualifying Acres. The CAD appealed the values in Rule ISD for Categories A and D1, and they appealed the values in Paint Creek ISD for Category D1.
While these figures show the range of property ratios in Haskell CAD, a clearer measure of appraisal performance includes how many of these ratios were within 10 and 25 percent of the median ratio. The median ratio is the ratio in the middle of all the other ratios when sorted by size.
These figures, in conjunction with the Coefficient of Dispersions (CODs) outlined below, measure the consistency of an appraisal district's property appraisals at the same percentage of market value, without regard to value. A low COD combined with high percentages indicate equitable appraisals, while a high COD paired with low percentages indicate inequitable appraisals.
The median ratio for Category A, single family residences, in Haskell CISD was 96 percent, with 57 percent of the ratios within 10 percent of the median and 77 percent within 25 percent of the median.
The median ratio for Category D3, non-qualified farm and ranch properties, in Haskell CISD was 95 percent, with 45 percent of the ratios within 10 percent of the median and 67 percent within 25 percent of the median.
The median ratio for Category F1, commercial real properties, in Haskell CISD was 98 percent, with 81 percent of the ratios within 10 percent of the median and 88 percent within 25 percent of the median.
The median ratio for Category G, oil, gas and mineral leases, in Haskell CISD was 102 percent, with 73 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.
The median ratio for Category J, utility properties, in Haskell CISD was 99 percent, with 80 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.
The median ratio for Category L, commercial personal properties, in Haskell CISD was 98 percent, with 93 percent of the ratios within 10 percent of the median and 100 percent within 25 percent of the median.
Haskell CAD Summary
The Haskell CAD overall median ratio was 0.98.
- Category A, Single-Family Residential, sample ratios ranged from 0.41 to 3.40. The median ratio was 0.98.
- Category D3, Non-qualified Land, sample ratios ranged from 0.27 to 2.51. The median ratio was 0.95.
- Category F1, Commercial Real Property, sample ratios ranged from 0.83 to 2.97. The median ratio was 0.98.
- Category G, Oil, Gas & Minerals, sample ratios ranged from 0.76 to 1.19. The median ratio was 1.03.
- Category J, Utilities, sample ratios ranged from 0.94 to 1.10. The median ratio was 0.97.
- Category L1, Commercial Personal, sample ratios ranged from 0.84 to 1.18. The median ratio was 0.98.
Coefficient of Dispersion
The COD, the primary measure of appraisal uniformity, measures the average percentage by which individual ratios vary from the median ratio. According to IAAO's Property Appraisal and Assessment Administration, a low COD indicates that appraisals within a category of property are uniform, while a high COD indicates properties are being appraised at inconsistent percentages of market value. A COD that is very low, however, may indicate "sales chasing," a form of unequal appraisal.
According to IAAO's Standard on Ratio Studies, CODs for Category A, Single- Family Residences, should generally be 15 or less, and 10 or less for new and fairly homogeneous areas. For Category C, Vacant Lots, and for income-producing properties, the COD should be 20 or less. For other real property and personal property, CODs should reflect the nature of the properties, market conditions and the availability of reliable market indicators.
The 2006 COD for Haskell CAD Category A was 15.45; Category D was 19.65; Category F1 was 17.78; Category G was 8.19; Category J was 2.54; and Category L1 was 4.18.
The 2006 COD for Haskell CISD Category A was 14.62; Category D was 25.41; Category F1 was 17.84; Category G was 5.94; Category J was 3.37; and Category L1 was 4.13.
These numbers indicate relative inconsistency or lack of uniformity in appraisal in Categories A, D and F1 in the CAD and Category D in the ISD.