• October 21, 2019

CHIEF'S APPRAISAL: Your slice of the property tax pie - Odessa American: Chief's Appraisal

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CHIEF'S APPRAISAL: Your slice of the property tax pie

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Posted: Sunday, September 1, 2019 5:00 am

September brings changes — the temperature finally falls below 100, the kids are back in school, and most of us are searching our closets for our favorite team’s football jersey. 

The taxing entities are holding public rate hearings if necessary and adopting their tax rates, while the appraisal district is gearing up to calculate your 2019 tax amounts and prepare your tax statements. And in 2019 and other odd-numbered years, Texas appraisal districts and taxing entities are changing processes and updating software to implement the changes adopted in the recent Texas legislative session.

ECAD’s website and taxpayer assistance brochures will soon be updated to provide you with the latest information.

Longtime Ector County taxpayers remember the days when the homeowners’ tax amounts were low and the oil companies and royalty owners paid the largest part of our local property taxes.  It was good to have those non-resident taxpayers funding the services provided by our local government.  It was personally less expensive for us to educate our children, provide local law enforcement and fire protection, maintain traffic control, repair our streets, and maintain our public properties.

In those days, oil and gas properties were appraised at their current market value.  There were no requirements for appraising residential or commercial property at market value; nor were there requirements regarding the systematic reappraisal of properties.

In 1979, the property tax code received a major rewrite; and beginning in 1983, legislation required that all property be appraised at its current market value.  While mineral valuations didn’t change much because they were already at market value, residential and commercial property valuations increased significantly.  This redistributed the tax burden, resulting in a shift from mineral owners to owners of all categories of property.

For 2019, the local tax burden varies from entity to entity based on the properties within an entity’s boundaries and the specific tax exemptions granted. As we experience sustained residential and commercial growth and decline in mineral production, the shift continues. Overall, residential homeowners pay 35 percent, commercial and industrial property owners pay 53 percent, and mineral property owners pay 12 percent.  Is that a fair distribution of the property tax pie?  I suppose the answer depends on whom you ask. 

Our conversations with homeowners indicate they believe their share is too high.  Based on talk in the recent legislative session, business owners think their share is too high, especially because businesses also pay sales tax and other taxes. Of course, sales taxes are passed on to the consumer through the mark-up of product prices, making it difficult to determine how much you’re paying and where the tax money is used.

Property tax statements are mailed in October and become delinquent if not paid before Feb. 1. 

Homeowners who pay taxes and insurance through a mortgage escrow account spread their tax cost over a 12-month period. 

Homeowners receiving the Over 65 or Disabled Person exemptions may pay their tax in four equal installments between October and June. 

Other forward-thinking property owners have been escrowing amounts with the appraisal district and will be billed only for the amount still due. 

Our tax system is complicated and there are issues to be addressed.  But when comparing states by all forms of tax, our problems are fewer and less serious and Texans still pay less in taxes than elsewhere in the nation.   

When the Texas Legislature begins the next session, the legislators will be again looking at ways to fund school districts and cut local property taxes.  It’s a challenge the legislature has been working on for years and there are no easy solutions. As September ends, the Ector County Appraisal District will once again begin the process of preparing the tax bills that will fund the entities’ budgets and provide all property owners with those essential services.

 

Odessa, TX

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