It's a Value Judgment

Dallas Morning News | Editorials:

“While state law requires properties to be appraised at full market value, property owners are not required to disclose the price at which properties – especially commercial ones – are bought and sold. ... The Texas Association of Appraisal Districts says commercial properties therefore are undervalued, costing school districts and other taxing bodies billions of tax dollars each year. Worse, the group says, the tax burden shifts to residential homeowners, especially those whose properties are assessed close to market value.”

Ed Cognoski responds:

If Texas wants to rely on property taxes to fund government, Texas ought to demand the information needed to accurately appraise the value of property. This should be a no-brainer. But be careful. Taxpayers are so suspicious of government that they will see this as a scheme by appraisal districts to jack up appraisals. The Dallas Morning News practically comes right out and says so.

The Dallas Morning News rightly warns taxing authorities not to use mandatory disclosure of sales prices as an excuse to create a revenue windfall. Appraisal districts are doing a lousy job of convincing taxpayers that's not their plan, that residential homeowners are likely to benefit from this change. Maybe that's because there's some basis to the fear. Maybe some taxing authorities are salivating over the prospect of increased revenues. If so, we risk ending up with no sales disclosures and movements to cap local tax revenues or, worse, tax rates. That leads to the worst of both worlds – an unfairly distributed tax burden and underfunded local governments.

Come on, appraisal districts. Give us reason to believe you can be trusted to use this new power frugally.