Appraisal District Operations
CADs Report 6 Percent Increase in Operating Costs
Adopted budgets for Texas’ 253 county appraisal district (CAD) offices rose almost six percent for fiscal year 2001, increasing more than $14 million above the 2000 total costs. These CADs serve 3,647 taxing units with more than 15 million taxable property accounts. Total statewide cost for CAD operations was about $242 million.
While Texas has 254 counties, the Potter and Randall CADs form a single appraisal office in Amarillo, with one budget and staff.
Following are findings from the Comptroller’s 2000 and 2001 Appraisal District Operations Report. The Comptroller’s Property Tax Division (PTD) asked CADs to respond by survey about final 2000 operations and projected 2001 budgets and plans.
CADs reported a total of 3,647 taxing units for tax year 2001, compared to 3,621 in 2000. This represents a net increase of 26 taxing units, after adding for new taxing units and subtracting for taxing units that have dissolved or will no longer levy a property tax.
For 2001, 41 new taxing units will levy a property tax for the first time. Some of these units may be located in more than one CAD. These new units included 14 municipal utility districts, six water control improvement districts, five cities, four fresh water supply districts, three hospital districts, two fire districts, two emergency service districts, one road district, one underground water control district, one medical clinic district, one water irrigation and drainage district, and one ground water conservation district.
Some 17 taxing units either dissolved or withdrew from their appraisal district or will no longer collect property taxes. Three taxing units consolidated operations with other taxing units, and one taxing unit joined another appraisal district.
The total number of taxable parcels (or accounts) increased statewide by 266,065, to total just above 15 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. CADs will report their final 2001 parcel counts this winter.
The greatest percentage increase in number of accounts occurred with real property (land and buildings). CADs added 307,226 real property accounts — almost a 3-percent increase — to reach a total of 11,050,568 accounts.
The number of mineral parcels increased slightly — by 8,959 parcels — to total almost 2.7 million parcels.
Non-business personal property accounts saw an increase of almost 9-percent, or 13,679 parcels. Non-business personal property totaled 154,212 accounts.
The only category of property that decreased in parcels was taxable business personal property. CADs reported a loss of 63,799 business personal property accounts, representing about a 6-percent decrease. Business personal property consisted of 1,085,004 accounts.
In Texas, 19 of the 253 CADs appraise 150,000 or more taxable parcels, representing more than 44 percent of all taxable property parcels in Texas. Of these 19 districts, six CADs have over 300,000 parcels and represent more than 27 percent of all taxable properties. 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.
In final 2000 expenses, CADs spent a total of about $228 million, or an average of $15.14 per parcel, to appraise property, about 10 percent more than in 1999. The average 2000 CAD operating expenses were $899,212.
The 2000 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, home of the Comanche Peak power plant, continued to report the highest cost per parcel at $39.38, up about 5 percent from 1999.
Mid-sized CADs, with parcel counts from 35,000 to 49,999 parcels (40 districts), averaged the lowest cost per parcel at $11.34 — up almost 5-percent from 1999. The six largest districts averaged $21.70 per parcel — also up almost 5-percent from last year. The size and complexity of urban properties and the higher costs of doing business in these CADs contribute to the higher cost per parcel. See the 2000 CAD Spending by Size table below.
2000 CAD Spending by Size While the average 2000 cost per account statewide was $15.14, grouping the CAD's by account sizes shows the cost per account varies - with the largest group of districts exceeding the state average. Number of
Below 5,000 5 $55,231 12.54 5,000 to 9,999 32 $112,129 13.58 10,000 to 14,999 24 $167,366 13.27 15,000 to 19,999 25 $199,501 11.35 20,000 to 24,999 21 $302,108 13.33 25,000 to 34,999 37 $401,463 13.38 35,000 to 49,999 40 $468,803 11.34 50,000 to 74,999 27 $698,458 11.54 75,000 to 149,999 23 $1,355,451 12.51 150,000 to 300,000 13 $2,813,341 14.23 Over 300,000 6 $14,679,084 21.70
Property Tax Code 6.06(j) requires CADs to refund or credit budget surplus funds to their taxing units for the following fiscal year. Over two-thirds of the CADs — 167 districts — reported a 2000 budget surplus. The state total surplus exceeded $10 million.
Adopted 2001 budgets showed a 6-percent increase above 2000 expenses and totaled almost $242 million. Using 2000 taxable property parcels/accounts, the average cost per parcel runs $16.09 per parcel. See the Appraisal District Spending, 1982-2001 table below.
Appraisal District Spending, 1982-2001 While CAD budgets have risen on an average cost per account in the past 19 years, the CADs received a smaller percentage of the taxes levied by taxing units. Year Average Cost
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% n/a
*2001 reflects adopted budget, not final expenditures.
Property Tax Code Section 6.06(b) and (d) require local taxing units to fund CAD budgets and give taxing units veto power after the CAD directors adopt the CAD budget. Taxing units in two CADs — Marion and San Saba CADs — vetoed their 2001 budget.
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 total tax levy used to allocate their budgets increased from $19.7 billion in 1999 to almost $22 billion in 2000. CAD operating expenses as a percentage of taxes levied was slightly above 1 percent — down from 1999.
A board of directors governs CAD operations and establishes goals and policies. State law requires that if the county tax assessor-collector is not appointed to the CAD board, the county assessor-collector serves as a non-voting CAD director. County tax assessor-collectors, however, are ineligible to serve if they serve as the chief appraiser or if the county commissioners’ court contracted for county taxes to be collected by another taxing unit or the CAD.
Texas has a total of 1,556 CAD directors, with an average of six members on each CAD board. About 41 percent, or 640 directors, are taxing unit officials — that is, they are county tax assessor-collectors, school board members, county commissioners, city council members, and other elected officials. Directors in 70 CADs serve staggered two-year terms.
CAD boards in 209 districts have legal counsel on retainer. CADs reported that 198 boards — one more than last year — have purchased liability insurance with an average coverage per board of more than $1 million.
Appraisal review boards
CAD directors appoint appraisal review board (ARB) members to handle taxing unit challenges and taxpayer disputes with the appraisal office. More than 17 percent (231) of the 1,355 ARB members are newly appointed. While state law allows the size of an ARB to range from three to 45 members (depending on the county’s population), most ARBs average five members. A new state law, effective January 1, 2002, will allow appointing from 3 to 75 members, based on the population of the county.
ARBs retain legal counsel in 91 CADs — 17 more than in 2000. ARBs in 174 CADs — two less than in 2000 — have obtained liability insurance at more than $1 million per ARB. ARB members in 246 districts receive a per diem for their ARB service — two less than last year.
CAD directors also may appoint temporary and auxiliary review board members. Property Tax Code Section 41.66(f) prohibits an ARB member from communicating with another person about a protested property except during the ARB hearing or another protest in which the property is part of a sample of properties. If an ARB member does communicate about a protested property outside of the hearing, then a temporary ARB member must take that member’s place to hear the protest. Thirty-three districts — up from 29 in 2000 — appointed temporary members in case a regular ARB member could not serve.
Property Tax Code Section 6.411 provides for appointing auxiliary ARB members to help hear taxing unit challenges and taxpayer protests. Some 25 CAD boards — down from 26 in 2000 — appointed auxiliary ARB members for 2001. Effective January 1, 2002, state law repeals appointing auxiliary ARB members.
Ag advisory board
Property Tax Code Section 6.12 requires the chief appraiser — with the advice and consent of the CAD’s board — to appoint three or more members to an agricultural advisory board. The advisory board advises the chief appraiser on the appraisal and use of land designated for agricultural, open space, or timberland appraisal.
Some 175 CADs — one less than 2000 — have active agricultural advisory boards, with a state membership totaling 667 members.
Full-time CAD employees numbered 3,967 statewide, compared to 3,899 in 2000, a gain of 68 full-time positions. Of these employees, about 1,424 are appraisers. The number of part-time employees decreased from 198 in 2000 to 194 in 2001. Some 25 districts employ only part-time appraisers. In some CADs, chief appraisers perform all appraisal work or have contracts with private appraisal firms. A staff appraiser’s average salary ranged from a low of $22,818 to an average high of $34,106.
Employees in 182 CADs receive mileage allowances, and 216 districts provided staff with fringe benefits, including insurance and/or retirement programs.
Almost 88 percent of the CADs — 223 — budget training funds for staff to meet or retain state certification standards. CADs reported 1,953 employees are registered with the Board of Tax Professional Examiners. Of these employees, 1,222 attained the registered professional appraiser designation, 239 are registered Texas assessors, 110 are registered Texas collectors, and 82 individuals have all three designations.
Twenty-three (one less than last year) CADs contract with a taxing unit to serve as the appraisal office. These CADs, therefore, have no employees. The chief appraisers are employees of taxing units that operate the appraisal office by contract with the CAD board. The statistical data for these chief appraisers and their staffs were not included in the average salaries.
Salaries of 229 chief appraisers averaged $48,979 for the 2001 budget, about a 3-percent increase from the 2000 average salary of $47,442. Chief appraisers in 228 CADs receive fringe benefits, such as expense accounts, mileage, medical insurance, and/or retirement programs. About 176 CADs have liability insurance for the chief appraiser, with an average coverage of more than $1 million.
CADs in 228 districts conducted an in-house ratio study in 2000, compared to 229 districts in 1999.
Property Tax Code Section 6.025 requires that CADs shall, to the extent practicable, coordinate their appraisal activities so as to encourage and facilitate the appraisal of the same property appraised by each district at the same value. CADs in 210 counties had taxing units with boundaries in other counties and, thus, overlapping properties. CADs in 173 counties contractually agreed to work together on these overlapping properties.
State law requires CADs to reappraise property in their districts at least once every three years. For the 2000 tax year, 167 CADs — 66 percent — completed reappraisals, while 129 CADs planned to reappraise for the 2001 tax year. In their last reappraisal, 212 CADs used both in-house staff and an outside appraisal firm for their reappraisal. In the remaining districts, 27 CADs used staff only and 13 CADs used appraisal firms alone for the reappraisal. By contract, Haskell CAD has Stephens CAD provide appraisal services.
For tax year 2000, CADs mailed more than 8.4 million reappraisal notices, of which almost all contained estimated taxes on the proposed taxable values. Some 12,914 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 22 percent more written protests than in the previous year, for a state total of 541,967 protests in 240 CADs. In 1999, officials reported a total of 444,820 protests reported by 239 CADs in 1999. Almost 65 percent of the protesting taxpayers met with CAD staff in informal hearings to attempt a settlement without continuing to a formal ARB hearing.
CADs scheduled 234,671 formal ARB hearings for these filed protests — some 13,855 fewer formal hearings or about a 6-percent decrease. More than 93,000 taxpayers, however, did not attend their scheduled hearing, representing almost a 40-percent “no show” rate. In 1999, about 27 percent were “no shows.”
Property Tax Code Section 41.71 requires ARBs by rule to provide taxpayers with hearing times in the evening or on a Saturday or Sunday. ARBs in 82 counties offered protest hearings during all three times — Saturday, Sunday, and evenings. About 87 ARBs offered protest hearings in the evenings, another 59 ARBs offered hearings on Saturday and evenings. About 10 ARBs offered hearings on a Saturday; and one district offered hearings on Saturday and Sunday. Some 14 ARBs did not offer an alternate time.
Taxing units also may file written challenges if they disagree with CAD decisions. In 2000, some 18 taxing units — compared to eight in 1999 — filed challenges.
Nineteen-Year Review of Appraisal District Workload In 2000, CAD's mailed fewer appraisal notices and scheduled fewer ARB hearings than in 1999. Year Taxable
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
CADs and ARBs continue to complete their work timely. In 2000, ARBs in 190 districts approved the appraisal records on or before July 20, 2000, the mandatory deadline for ARB approval. The remaining 63 ARBs approved the appraisal records after July 20, 2000. Seventy-four ARBs – compared to 56 in 1999 – approved the records before hearing all the protests as allowed by the Property Tax Code Section 41.12.
ARBs approved appraisal rolls listing more than $1 trillion in 2000 value, almost 11 percent more value than in 1999. Chief appraisers in 224 districts certified those appraisal rolls to taxing units by July 25, the mandatory date.
After an ARB approves the appraisal records, it may change the records for specific reasons set out in Property Tax Code Sections 25.25 and 41.411. The most common late change was for Section 41.411, the “no-notice” appeal. These owners claimed that the CAD or ARB failed to send the property owner or owner’s agent a required notice. About 32 CADs reported that 3,621 property owners with properties appraised at almost $355 million filed Section 41.411 “no-notice” appeals.
The next group of late changes were those filed under Section 25.25(c), allowing changes for clerical errors and multiple appraisals of the same property. Clerical errors for 1,740 properties worth over $807 million occurred in 25 CADs. Some 20 districts reported multiple appraisals on a total of 506 parcels worth more than $73 million.
Another group of late changes were for those property owners filing under Section 25.25(c), claiming that the appraisal district improperly included property on the appraisal roll. About 27 CADs reported this type of change on 2,381 properties worth almost $596 million.
Section 25.25(b) allows the chief appraiser to change the appraisal roll at any time to correct any inaccuracy that does not increase the amount of a taxpayer’s tax liability. Chief appraisers in 73 CADs reported 711 changed properties with a total of almost $28 million in value.
Property owners in 52 CADs reported changes under Section 25.25(d), an incorrect appraisal that exceeds the correct value by more than one-third. These CADs reported what is considered a “substantial value error” on 1,976 properties with a total value of almost $458 million.
Section 25.25(h) allows for joint motion corrections, requiring both the chief appraiser and property owner (or owner’s agent) to agree to the correction. About 533 joint motions in 24 CADs were filed on properties worth about $328 million.
Property owners who disagree with the ARB’s decision on their property may continue on to district court. As of the 2001 survey reporting date, 98 CADs reported that taxpayers had filed 1,997 lawsuits on their 2000 values, compared to 87 CADs reporting 1,752 lawsuits at the same time in the previous year. About 1,425 lawsuits were still pending for tax year 1999 and prior years in 117 CADs.
Six CADs reported 12 lawsuits filed on 2000 issues were resolved through non-binding arbitration.
All CADs must establish and maintain tax maps for property identification. About 56 percent of CADs have developed geographical information systems (GIS). These 151 CADs, compared to 144 in 1999, are developing or have completed their GIS systems for better mapping and information systems.
The 2000 & 2001 Appraisal District Operations Report updates the listing of taxing units that tax or retain the right to tax freeport property. The Tax Code defines freeport property as goods, wares, and merchandise (other than oil, gas, and petroleum products) that leave Texas within 175 days of the date they are brought into or acquired in the state. Counties, cities, school districts, and junior college districts may tax or retain the right to tax freeport property. Other special districts must exempt freeport property.
CADs in 201 districts reported about 1,555 taxing units taxed or retained the right to tax freeport property in 2000, a decrease from 202 districts for 1,564 units in 1999. Taxing units taxing include: 148 counties, 573 cities, 778 schools, and 56 colleges. For an updated list of these taxing units, call the PTD’s technical assistance hotline at 1-800-252-8121. In Austin, call 512/305-9999.
Non-income producing property
Property Tax Code Section 11.14 allows taxing units to tax non-income producing personal property, after the units follow certain hearing and notice requirements. For 2000, 26 CADs reported that 99 taxing units tax non-income producing personal property, such as private automobiles, boats, and airplanes. These units include 15 counties, 25 cities, 37 school districts, and 22 special districts.
For 2000, Baylor County, the city of Seymour, Seymour Independent School District, Baylor County Hospital District (all in Baylor County), and High Plains Underground Water Conservation District #1 (in Castro and Parmer Counties) reported taxing non-income producing personal property. The city of Follett (in Lipscomb County) and Caprock Hospital District (in Floyd County) discontinued taxing these properties. A listing of these units is available by calling the PTD phone numbers listed earlier.
Some 153 CADs also perform assessment functions, a decrease from 156 CADs in 1999. Assessment functions include calculating effective and rollback tax rates, publishing required notices, and preparing and mailing tax bills.
Some 115 CADs also collect property taxes. The number of CADs collecting taxes for taxing units decreased in 2000 by two CADs. The number of taxing units receiving collection services from CADs also decreased from 907 taxing units in 1999 to 906 units in 2000.
CADs that collect establish a separate collection budget. These CADs budgeted an average of $111,736 to perform the 2000 collection function, about a 2.5-percent increase from the preceding year. CAD collection budgets ranged from as low as $2,650 to $824,054, with an average cost per parcel to collect of 39 cents. In 2000, six 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. Some 168 county tax offices collect for 1,692 taxing units. The table Who Collects and For Whom shows consolidated collections with the type of collecting unit and the number of taxing units receiving the service. Some taxing units used private companies to collect taxes; some 46 private companies collected in 2000, compared to 49 companies in 1999. These private companies collected taxes for 464 taxing units in 2000. Only about 417 taxing units still collect only their own taxes as more taxing units move to consolidated collection offices.
Consolidation of all property tax collections for all taxing units into one office occurred in 110 CADs — six more than 1999. The single collecting office in these CADs included 59 CAD offices, 50 county tax offices, and one city that collected for all taxing units in that county.
Taxing Units Served by a Consolidated Tax Collection Office, 1986-2000 Type of Collection Office Year CADs Counties ISDs Cities Special Districts/
Total 1986 732 720 124 59 305 1,940 1987 780 837 134 58 293 2,102 1988 813 854 126 74 4 1,871* 1989 839 955 105 69 7 1,975* 1990 867 1,048 106 56 434 2,511 1991 1,031 1,199 870 47 461 3,608** 1992 1,077 1,261 781 79 488 3,686** 1993 952 1,215 126 60 497 2,850 1994 940 1,311 124 60 470 2,909 1995 922 1,393 121 60 472 2,968 1996 924 1,450 121 51 481 3,027 1997 915 1,484 126 51 450 3,026 1998 918 1,576 127 41 462 3,124 1999 907 1,636 135 41 472 3,191 2000 906 1,692 128 37 464 3,230
*Does not include taxing units served by private firms.
**Includes County Education Districts.
Who Collects and For Whom 1999 Collecting Office and Units Served 2000 Collecting Offices and Units Served 167 counties for 1,636 taxing units 168 counties for 1,692 taxing units 117 CADs for 907 taxing units 115 CADs for 906 taxing units 8 cities for 41 taxing units 6 cities for 37 taxing units 46 school districts for 135 taxing units 43 school offices for 128 taxing units 2 special districts for 6 taxing units 1 special district for 3 taxing units 49 private firms for 466 taxing units 46 private firms for 464 taxing units 389 offices collecting for 3,191 taxing units 379 offices collecting for 3,230 units
The 2000 & 2001 Appraisal District Operations Report also contains information on ARB compensation, CAD office space, software companies, computer facilities, appraisal firms, electronic data submission, tax rate rollback activity, and more. Many CADs also mailed the Comptroller’s office a copy of their 2001 appraisal budget, and some CADs that collect taxes provided copies of their 2001 collection budgets.
To request any CAD’s survey, appraisal budget, or collection budget, please send an e-mail to the Property Tax Division at firstname.lastname@example.org, or call the PTD’s technical assistance hotline at 1-800-252-9121. In Austin, call 512/305-9999.
From the CAD surveys, the PTD also updates names and addresses of CAD directors, ARB members, and chief appraisers. This information is contained in the 2001 Appraisal District Directory. The PTD will send each appraisal district and county tax office a copy of the 2000 & 2001 Appraisal District Operations Report and 2001 Appraisal District Directory. Anyone may purchase either book by sending a check or money order for $10 each to the Comptroller’s Property Tax Division, P. O. Box 13528, Austin, Texas 78711-3528.
For the past 20 years, CADs have completed the Appraisal District Operations Survey. State Comptroller Carole Keeton Rylander thanks the districts for their time.