May I have a word? Appraisal reform

Texas Governor Rick Perry created the Texas Tax Force on Appraisal Reform, naming Tom Pauken to chair the advisory group. Mr Pauken is the former chairman of the Republican Party of Texas and, more recently, publisher and frequent contributor to Dallas Blog. His posts there give the lie to Gov Perry's claim that the task force not have any pre-arranged conclusions. It is clear now that the goal of the task force has little to do with "appraisal reform" and everything to do with cutting taxes and imposing state restrictions on the power of local government to set tax rates. Calling it "appraisal reform" is so much more likely to gather bipartisan support than the "Texas Tax Force on Cutting Taxes" would have. Control the language and you control the debate. But I get ahead of myself. First, some background...

Property appraisals are rising because property values are rising. The country has been in a real estate bubble. It's that simple. Texas hasn't participated in that like some other areas of the country, but property values are rising here, too. It's not a conspiracy. It's not devious plot to raise taxes. If you tax income and incomes go up, so do tax collections. If you tax wealth and property values go up, so do tax collections. Increasing incomes and wealth are good things, folks.

Appraisers do the best they can to determine fair market values, but are handicapped by one big restriction. Texas does not require sales price disclosure. The best tool for determining fair market value is to look at the prices that comparable properties sold for recently. That requires sales price disclosure. Without that tool, appraisals sometime come in well off the mark, both high and low.

Mr Pauken's task force could address the biggest problem with appraisals just by giving county appraisal boards the power to require sales disclosure. But erroneous appraisals actually serve Mr Pauken's larger purpose of state-imposed tax cuts on localities. It's in Mr Pauken's self interest to let this weakness go unaddressed. Erroneous appraisals foster taxpayer complaints against the system as a whole, creating an opportunity for Mr Pauken to "solve" the problem by recommending rate caps, revenue caps, rollback elections, instead of just giving the appraisal boards the only tool really needed for "appraisal reform".

To support his argument, Mr Pauken strangely chose to report on a recent meeting of the Cypress-Fairbanks school board, where some 300 residents turned out to protest a tax rate increase to pay for an $80 million, voter-approved, athletic stadium and multipurpose center. How this illustrates a problem needing Austin-imposed "appraisal reform" is a real stretch. This is a case where 300 residents don't like paying for what a majority of their community voted for. And they went to their school board to protest, not to Austin. Local solutions for local problems. But Mr Pauken apparently thinks the solution is to have the state require the local citizens to vote again and again and yet again, once for the school board to represent their interests, once for the bond package for the athletic stadium and multipurpose center, and now yet again to avoid rolling back taxes in the face of rising property values. I suppose if the voters again approve the tax rate, Mr Pauken will devise yet another "reform" until he gets the tax cuts that he and 300 residents are really after.

So much for "appraisal reform." Rather than discuss the issues surrounding property appraisals, Mr Pauken plays word games, using Dallas Blog like some kind of focus group to see what bumper sticker slogans are effective at building support for his and Governor Perry's pre-arranged conclusion. Mr Pauken's blogs are filled with loaded terminology like "stealth tax" and "taxpayer protections" and "appraisal reform" when the real goal is plain and simple tax cuts. Criticize Mr Pauken's proposal to impose state regulation on localities and he asks why you are against "taxpayer protections"? In the comments section of the blog, one appraisal board member called him on using the term "appraisal creep" instead of the neutral (and more accurate) term, rising property values. But don't look for Mr Pauken to change his tactics. Not if it's beneficial to demonize the appraisal boards through use of loaded terminology. Just talk about the issues, Mr Pauken and leave the word games out of it.