Appraisal District Operations
CADs Report 6 Percent Increase in Operating Costs
Adopted budgets for Texas’ 253 county appraisal district (CAD) offices rose about 6 percent for fiscal year 2002, an increase of almost $15 million from the 2001 total costs. These CADs serve 3,718 taxing units with more than 15 million taxable property accounts. Total statewide cost for CAD operations was about $257 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 2001 and 2002 Appraisal District Operations Report. The Comptroller’s Property Tax Division (PTD) asked CADs to respond by survey about final 2001 operations and projected 2002 budgets and plans.
CADs reported a total of 3,718 taxing units for tax year 2002, compared to 3,647 in 2001. This represents a net increase of 71 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 2002, 76 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 27 municipal utility districts, 14 emergency service districts, seven water control improvement districts, seven fresh water supply districts, six cities, four fire districts, four road districts, four ground water conservation districts, one underground water control district, one water district, and one levee improvement district.
Some 19 taxing units either dissolved or withdrew from their appraisal district or will no longer collect property taxes. Two 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 363,325 parcels for a total parcel count of more than 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 2002 parcel counts this winter.
The greatest increase in number of parcels occurred with real property (land and buildings). CADs added 198,502 real property accounts — about a 2-percent increase — to reach a total of 11,249,070 parcels.
The number of mineral parcels increased by 150,665 parcels — to total almost 3 million parcels.
Business personal property accounts saw an increase of more than 2 percent, to add 23,054 parcels. Business personal property totaled 1,108,058 accounts.
The only category of property that decreased in number of accounts was taxable non-business personal property. CADs reported a loss of 8,896 non-business personal property accounts, representing more than a 5-percent decrease. Non-business personal property consisted of 158,995 accounts.
In Texas, 21 (two more than last year) of the 253 CADs appraise 150,000 or more taxable parcels, representing almost 46 percent of all taxable property parcels in Texas. Of these 21 districts, six CADs have over 300,000 parcels and represent almost 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 2001 expenses, CADs spent a total of about $242 million, or an average of $15.72 per parcel, to appraise property. These expenditures were about 4 percent more than in 2000. The average 2001 CAD operating expenses were $956,101.
The 2001 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, Rockwall CAD reported the highest cost per parcel at $28.10, down from $39.38 in 2000.
Mid-sized CADs, with parcel counts from 35,000 to 49,999 parcels (36 districts), averaged the lowest cost per parcel at $11.17 — down almost 2 percent from 2000.
The six largest districts (listed on page 1) averaged $22.70 per parcel — up about 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 2001 CAD Spending by Size table below.
2001 CAD Spending by Size While the average 2001 cost per account statewide was $15.72, 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 2001 Expenses Average Cost Per Account/Parcel Below 5,000 4 $51,474 11.87 5,000 to 9,999 28 $110,243 13.53 10,000 to 14,999 24 $154,551 12.65 15,000 to 19,999 28 $199,116 11.38 20,000 to 24,999 15 $286,191 12.76 25,000 to 34,999 48 $424,344 13.99 35,000 to 49,999 36 $473,553 11.17 50,000 to 74,999 29 $749,813 12.19 75,000 to 149,999 20 $1,435,164 13.20 150,000 to 300,000 15 $2,862,163 14.66 Over 300,000 6 $15,704,462 22.70
Property Tax Code 6.06(j) requires CADs to refund or credit budget surplus funds to their taxing units for the following fiscal year. Two-thirds of the CADs — 162 districts — reported a 2001 budget surplus. The state total surplus was almost $11 million.
Adopted 2002 budgets represent a 6-percent increase above 2001 expenses and totaled more than $256 million. Using 2001 taxable property parcels/accounts, the average cost per parcel runs $16.67 per parcel. See the Appraisal District Spending, 1982-2002 table below.
*2002 reflects adopted budget, not final expenditures.
Appraisal District Spending, 1982-2002 While CAD budgets have risen on an average cost per account in the past 20 years, the CADs received a smaller percentage of the taxes levied by taxing units. Year Average Cost
Total Spent Percent
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% n/a
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 one CAD — Lee CAD — vetoed its 2002 budget.
CAD budget 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 $22 billion in 2000 to more than $24 billion in 2001. About 1 percent of property taxes levied goes to pay CAD operating expenses.
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 1,559 CAD directors, with an average of six members on each CAD board. Almost 42 percent, or 649 directors, are taxing unit officials — that is, they are county tax assessor-collectors, school board members, county commissioners, city council members, or other elected officials. Directors in 68 CADs serve staggered two-year terms.
CAD boards in 213 districts have legal counsel on retainer. CADs reported that 196 boards — two less 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.
Effective January 1, 2002, the Texas Legislature repealed Tax Code Section 6.411 that allowed for appointment of auxiliary ARB members. The Legislature increased the number of regular members on an ARB to be from three to 75 members, based on the population of the county. Because of the law change, more than 25 percent (364) of the 1,445 ARB members are newly appointed. That compares to only 231 new ARB members in 2001. Most ARBs average six members, up from an average of five members last year.
ARBs retain legal counsel in 92 CADs — one more than in 2001. ARBs in 179 CADs — five more than in 2001 — have obtained liability insurance at more than $1 million per ARB.
ARB members in 246 districts receive a per diem for their ARB service — the same as last year.
CAD directors also may appoint temporary 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 in 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-seven districts — up from 33 in 2001 — appointed temporary members in case a regular ARB member could not serve.
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 172 CADs — three less than 2001 — have active agricultural advisory boards, with a state membership totaling 661 members.
Full-time CAD employees numbered 4,042 statewide, compared to 3,967 in 2001, a gain of 75 full-time positions. Of these employees, about 1,387 are appraisers.
The number of part-time employees increased from 194 in 2001 to 240 in 2002. 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 $23,411 to an average high of $35,451.
Employees in 175 CADs receive mileage allowances, and 218 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 2,020 employees are registered with the Board of Tax Professional Examiners. Of these employees, 1,186 attained the registered professional appraiser designation, 421 are registered Texas assessors, 110 are registered Texas collectors, and 89 individuals have all three designations.
Twenty-three 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 230 chief appraisers averaged $50,785 for the 2002 budget, about a 4-percent increase from the 2001 average salary of $48,979. Chief appraisers in 229 CADs receive fringe benefits, such as expense accounts, mileage, medical insurance, and/or retirement programs. About 172 CADs have liability insurance for the chief appraiser, with an average coverage of more than $1 million.
State law requires CADs to reappraise property in their districts at least once every three years. For the 2001 tax year, 174 CADs — 69 percent — completed reappraisals, while 151 CADs planned to reappraise for the 2002 tax year.
In their last reappraisal, 208 CADs used both in-house staff and an outside appraisal firm for their reappraisal. In the remaining districts, 31 CADs used staff only and 13 CADs used appraisal firms alone for the reappraisal. By contract, Haskell CAD has Stephens CAD provide appraisal services.
Chief appraisers in 229 districts conducted an in-house ratio study in 2001, compared to 228 districts in 2000.
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 205 counties had taxing units with boundaries in other counties and, thus, overlapping properties. CADs in 164 counties contractually agreed to work together on these overlapping properties.
For tax year 2001, CADs mailed more than 9 million appraisal notices, of which almost all contained estimated taxes on the proposed taxable values. Some 3,946 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 658,757 protests in 243 CADs. In 2000, officials reported a total of 541,967 protests reported by 240 CADs. About 69 percent of the protesting taxpayers met with CAD staff in informal hearings to attempt a settlement without continuing to a formal ARB hearing.
ARBs scheduled 306,836 formal hearings for these filed protests — an increase of 72,165 formal hearings or about 31 percent from last year. More than 128,775 taxpayers, however, did not attend their scheduled hearing, representing almost a 42-percent “no show” rate. In 2000, about 40 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 70 counties offered protest hearings during all three times — Saturday, Sunday, and evenings. About 99 ARBs offered protest hearings in the evenings, another 63 ARBs offered hearings on Saturday and evenings. Three ARBs offered hearings on a Saturday, while two offered hearings on Saturday and Sunday. Some 16 ARBs did not offer an alternate time.
Taxing units also may file written challenges if they disagree with CAD decisions. In 2001, two taxing units — compared to 18 in 2000 — filed challenges.
The chart Twenty-Year Review of Appraisal District Workload highlights the history of the appraisal district workload with notices, challenges, and scheduled ARB hearings since appraisal districts began in 1982.
Twenty-Year Review of Appraisal District Workload In 2001, CADs mailed more appraisal notices and scheduled more ARB hearings than in 2000. 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
CADs and ARBs continue to complete their work timely. In 2001, ARBs in 198 districts approved the appraisal records on or before July 20, 2001, the mandatory deadline for ARB approval. The remaining 55 ARBs approved the appraisal records after July 20, 2001. Sixty-five ARBs – compared to 74 in 2000 – approved the records before hearing all the protests as allowed by the Property Tax Code Section 41.12.
ARBs approved appraisal rolls listing almost $1.3 trillion in 2001 value, almost 13 percent more value than in 2000. Chief appraisers in 233 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 25.25(c), property improperly included on the appraisal roll by the appraisal district. About 27 CADs reported this type of change on 3,117 properties worth almost $995 million.
Other Section 25.25(c) late changes were those filed for clerical errors and multiple appraisals of the same property. Clerical errors for 2,117 properties worth over $1.3 billion occurred in 39 CADs. Twenty-two districts reported multiple appraisals on a total of 490 parcels worth more than $1.6 billion.
Section 41.411, the “no-notice” appeal, allows property owners to claim that the CAD or ARB failed to send the property owner or owner’s agent a required notice. About 40 CADs reported that 1,160 property owners with properties appraised at almost $554 million filed Section 41.411 “no-notice” appeals.
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 85 CADs reported 1,040 changed properties with a total of almost $51 million in value.
Property owners in 60 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 2,850 properties with a total value of almost $997 million.
Tax Code 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 1,417 joint motions in 26 CADs were filed on properties worth about $520 million.
Property owners who disagree with the ARB’s decision on their property may continue on to district court. As of the 2001/2002 survey reporting date, 106 CADs reported that taxpayers had filed 2,400 lawsuits on their 2001 values, compared to 98 CADs reporting 1,997 lawsuits at the same time in the previous year.
About 1,316 lawsuits were still pending for tax year 2000 and prior years in 130 CADs.
Nine CADs reported 47 lawsuits filed on 2001 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, the same as last year, are developing or have completed their GIS systems for better mapping and information systems.
The 2001 & 2002 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 1,538 taxing units taxed or retained the right to tax freeport property in 2001, a decrease from 1,555 units in 2000. Taxing units taxing include: 145 counties, 569 cities, 767 schools, and 57 colleges.
For an updated list of these taxing units, call the PTD’s technical assistance hotline at 1-800-252-9121. In Austin, call 512/305-9999.
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 2001, 25 CADs reported that 98 taxing units tax non-income producing personal property, such as private automobiles, boats, and airplanes. These units include 15 counties, 23 cities, 37 school districts, and 23 special districts.
For 2001, the Rolling Plains Groundwater Conservation District in Baylor County and the Farwell Hospital District in Parmer County began taxing non-income producing personal property. Fredericksburg and Harper Independent School Districts in Gillespie County discontinued taxing these properties.
A listing of taxing units that tax non-income producing personal property is available by calling the PTD phone numbers listed earlier.
Personal leased vehicles
Effective January 1, 2002, Property Tax Code Section 11.252 exempts motor vehicles leased for personal use. These vehicles must be passenger cars or trucks with a shipping weight of not more than 9,000 pounds. The law defines “personal use” as using the vehicle more than 50 percent of its use (based on mileage) for activities that do not involve the production of income. A city by ordinance adopted before January 1, 2002, may tax personal leased vehicles.
Sixty-eight cities in 35 CADs chose to continue taxing all leased vehicles, both personal and business. A listing of these cities is available by calling the PTD phone numbers listed earlier.
Assessing & collecting
Some 147 CADs also perform assessment functions, a decrease from 153 CADs in 2000. 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 decreased in 2001 by two CADs. The number of taxing units receiving collection services from CADs also decreased from 906 taxing units in 2000 to 899 units in 2001.
CADs that collect establish a separate collection budget. These CADs budgeted an average of $121,747 to perform the 2001 collection function, about a 9-percent increase from the preceding year. CAD collection budgets ranged from as low as $2,500 to $888,975, with an average cost per parcel to collect of 39 cents. In 2001, 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 167 county tax offices collect for 1,751 taxing units. The tables Taxing Units Served by a Consolidated Tax Collection Office, 1986-2001 and Who Collects and For Whom show 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 48 private companies collected in 2001, compared to 46 companies in 2000. These private companies collected taxes for 481 taxing units in 2001. Only about 425 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 108 CADs — two less than 2000. The single collecting office in these CADs included 57 CAD offices, 50 county tax offices, and one city that collected for all taxing units in that county.
*Does not include taxing units served by private firms.
Taxing Units Served by a Consolidated Tax Collection Office, 1986-2001 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 2001 899 1,751 128 31 484 3,293
**Includes County Education Districts.
Who Collects and for Whom 2000 Collecting Office and Units Served 2001 Collecting Offices and Units Served 168 counties for 1,692 taxing units 167 counties for 1,751 taxing units 115 CADs for 906 taxing units 113 CADs for 899 taxing units 6 cities for 37 taxing units 4 cities for 31 taxing units 43 school districts for 128 taxing units 42 school offices for 128 taxing units 1 special district for 3 taxing units 1 special district for 3 taxing units 46 private firms for 464 taxing units 48 private firms for 481 taxing units 379 offices collecting for 3,230 units 375 offices collecting for 3,293 units
The 2001 & 2002 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 2002 appraisal budget, and some CADs that collect taxes provided copies of their 2002 collection budgets.
To request any CAD’s survey, appraisal budget, or collection budget, please send an e-mail to the Property Tax Division at email@example.com, 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 2002 Appraisal District Directory. The PTD will send each appraisal district and county tax office a copy of the 2001 & 2002 Appraisal District Operations Report and 2002 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 21 years, CADs have completed the Appraisal District Operations Survey. Texas Comptroller Carole Keeton Rylander thanks the districts for their time.