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2002 Final Property Value Study

School Taxable Property Values Increase Almost 6 Percent

Comptroller's Report
Confidential Tax Information
45th Institute on Property Taxation
Teacher Retirement System

Texas school districts’ final taxable property values totaled more than $1 trillion in 2002, an increase of just under 6 percent or about $55 billion from the 2001 property value study. The Comptroller’s office certified the final estimate of school taxable property values — based on the appraisal date of January 1, 2002 — to the Texas Education Commissioner on July 1, 2003.

The Government Code requires the Texas Education Agency to use the Comptroller’s annual estimates of individual school district taxable wealth to determine state aid payments. The Comptroller’s findings are reported in the agency’s 2002 Final Report of School and Appraisal Districts’ Property Value Study. The Comptroller sent a copy of the final report to members of the Texas Legislature and to each school district, county appraisal district and county tax office.

The study findings vary from the preliminary findings released in February 2003, because school districts, appraisal districts and certain taxpayers (with property in the study) filed appeals and corrections with the Comptroller’s Property Tax Division (PTD).

Property value trends

Taxable values increased in 804 school districts, with an average increase of more than 10 percent from 2001. Values declined in 248 districts by an average of almost 7 percent. While the state has 1,035 school districts, this total is for 1,052 districts since some school districts are appraised by more than one appraisal district. In these "split districts," the PTD counts these as separate districts for Property Value Study (PVS) purposes.

The final 2002 study, before exemptions, revealed about a 10-percent increase in the value of single-family residences, just under the 2001 increase of 12 percent. This category is the largest in appraised value, representing 47 percent of the total school district tax base.

Multi-family residences values increased more than 5 percent, following a 10-percent increase in 2001.

Changes in business properties’ values varied, depending on the category type. Commercial real property increased more than 2 percent, compared to 8 percent last year. Industrial real property remained the same value, after a 13-percent increase in 2001.

Industrial personal and commercial personal properties took different courses. Industrial personal dropped more than 3 percent (compared to 14 percent increase in 2001) and commercial personal rose slightly at less than 1 percent (compared to an 8-percent increase in 2001).

Utilities increased about 5 percent, after falling almost 4 percent in value in 2001. But oil, gas and minerals did not continue to increase but dropped more than 7 percent after increasing 56 percent in 2001.

Residential inventory, residential property held for sale by the developer, also increased 26 percent, following a 56-percent increase from the 2000 study. Special inventory is the inventory value of motor vehicle, boat, heavy equipment and manufactured housing dealers required to file special reports with appraisal districts and county tax offices; it increased less than 10 percent from the 2001 study.

Category N, intangible personal and uncertified property, included miscellaneous properties listed on the local tax rolls but not certified by local appraisal review boards at reporting time. With updated information during the appeals process, Comptroller staff distributed the certified values among other property categories.

Statewide School District Taxable Values, 2001 to 2002 (in billions)

  Property Category 2001 Final Value 2002 Final Value % Change 2001-2002
A. Single-family Residences $497.89 $548.01 10.07%
B. Multi-family Residences $50.93 $53.58 5.20%
C. Vacant Lots $24.86 $25.84 3.94%
D. Rural Real (Taxable) $48.97 $51.77 5.72%
F1. Commercial Real $164.80 $169.03 2.57%
F2. Industrial Real $70.41 $70.37 -0.06%
G. Oil, Gas, Minerals $44.20 $40.94 -7.38%
J. Utilities $39.07 $41.07 5.12%
L1. Commercial Personal $85.94 $86.51 0.66%
L2. Industrial Personal $56.26 $54.35 -3.39%
M. Other Personal $5.08 $5.44 7.09%
N. Intangible Personal & Uncertified $2.74 $5.42 97.81%
O. Residential Inventory $3.35 $4.20 25.37%
S. Special Inventory $3.29 $3.61 9.73%
  Subtotals $1,097.78 $1,160.15 5.68%
 Less Total Exemptions: $137.39 $144.96 5.51%
 Total Taxable Value $960.39 $1,015.19 5.71%

NOTE: Totals may not add because numbers are rounded.
Source: Comptroller's Property Tax Division, 2002 Property Value Study

Exemptions

Government Code Section 403.302 specifies the exemptions and special appraisals the Comptroller’s office deducts from market value to determine the taxable value of property in school districts. The table below shows school districts’ total exemptions and abatements increased more than $7 billion from the previous year. The 5.5-percent increase resulted from the granting of more state-mandated homestead exemptions and an increase in the loss for the tax limit on homesteads of homeowners age 65 or older. Other exemptions with increasing amounts exempted were for tax increment financing, freeport property and pollution control.

As in past years, the state-mandated homestead exemptions and the taxable value loss for those homes with tax ceilings for qualified homeowners age 65 or older and with value caps account for 86 percent of the deducted amount.

Estimates of School District Exemptions and Abatements Certified to Texas Education Agency

  2001 Exempt Value
(in billions)		 2002 Exempt Value
(in billions)
Homestead & Disabled Vet Exemptions $72.86 $75.45
Homestead Cap Value Loss $14.70 $14.16
Tax Limit on Over-65 Homesteads $34.40 $35.19
Abatements and Others $19.29 $20.16
Total $141.25 $144.96

Appraisal district findings

County appraisal districts (CADs) continue to appraise property with uniform results and close to market value, according to the 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 (COD) measures appraisal uniformity, whether properties are being appraised at an equal percentage of market value. The statewide COD was 11.49, better than the previous year’s 12.26.

The tables below show the statewide median appraisal ratios and the statewide coefficients of dispersion from 1992 to 2002.

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.



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.

Special Sessions and the Property Value Study
Bills Address ISDs with State Lower Than Local Values

During the First Called Session of the 78th Texas Legislature that began in June, House Bill (H.B.) 5 would have changed a part of Senate Bill (S.B.) 671 that passed during the regular session. While H.B. 5 passed both the House and Senate, it was sent to conference committee for different versions. The bill did not get approval and did not become law.

H.B. 5 would have changed the effective date of the provision for assigning local taxable value to a school district when that school district’s state value determined by the Comptroller’s Property Value Study (PVS) was lower than the district’s local taxable value. The effective date would have changed to 2004, rather than 2003.

The result would mean that all the school districts that received “state lower than local” would keep the lower number for the 2002 study (used in funding for the 2003-04 school year). The new provision would begin with the 2003 PVS.

The second change would have eliminated the one-time amnesty provision that addressed the 2002 PVS. This provision would have allocated approximately $3 million to those school districts who had been assigned local value for the preceding two years of the PVS (2000 and 2001 years) but received state value in the 2002 PVS and had a maintenance and operations rate exceeding $1.42.

During the Second Called Session of the 78th Texas Legislature that began in late July, H.B. 2 was introduced to try again to do these two changes to S.B. 671. It did not pass.