Numerous letters to the editor and commentaries have been published recently in The Daily News concerning 2020 Galveston County property taxes, COVID-19’s effect on real estate values in Galveston County, a political request to Gov. Greg Abbott to roll back 2020 appraised values and the make-up and functionality of the Galveston Central Appraisal District.
As a 40-plus year practicing tax attorney who has compromised and resolved property tax disputes in Texas, Louisiana and Mississippi, I will discuss some of the misconceptions, errors and inaccuracies in these articles.
First, the appraised value of property, both residential and commercial, is determined as of the situs date, which is Jan. 1 of each tax year. Any subsequent events, developments and occurrences after Jan. 1, no matter how devastating or horrific, cannot be considered in determining the appraised value on Jan. 1.
Such events should be considered in determining appraised value on the following Jan. 1 of the subsequent tax year. For this reason, the effects of the COVID-19 pandemic, while certainly disastrous and catastrophic, cannot be considered in valuing property as of Jan. 1, 2020, since COVID-19 wasn’t known or in existence on Jan. 1.
Moreover, under Texas law, a disaster declaration doesn’t directly affect valuation, unless it causes significant physical damage or destruction to property. There are factual questions as to whether COVID-19 actually caused physical damage to Galveston property, notwithstanding that it caused severe damage to the economies of Texas and the United States.
Secondly, while Abbott undeniably has extraordinary power and authority under Texas law, he simply doesn’t have the stated authority to freeze or rollback local property taxes. The Texas property tax is administered locally by the 254 counties and isn’t controlled by the governor.
I sympathize with the opinions that the Galveston Central Appraisal District is abusing taxpayers, that its board of directors should be elected, not appointed by the appraisal district’s member taxing units and that it should be made to answer for escalating appraised values year after year without accurate data to support their positions (“Appraisal district is abusing taxpayers,” The Daily News, May 12; and “Maybe it’s time for elected appraisal boards,” The Daily News, May 23-24).
However, homeowners do have recourse under the Texas Constitution and statutes — they can timely protest their 2020 Notices of Appraised Value to the appraisal district, meet with a district representative, appeal to the Appraisal Review Board and most importantly, timely appeal the board’s order to the district court or to an arbitrator.
While I typically view the board hearings to be a rubber-stamp of the district’s determination, a request for binding arbitration typically generates a more favorable result for the taxpayer who has adequately prepared a case and who presents critical evidence that the district hasn’t equally and uniformly appraised the taxpayer’s property. The Texas Comptroller of Public Accounts website provides important guidance to taxpayers interested in protesting and appealing to binding arbitration.