A Smart Approach to Closing a Costly Loophole

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Senator Rodney Ellis proposed new legislation Tuesday to close a state loophole that allows commercial property owners to skirt their responsibility and significantly reduce their property tax bills below the property’s value by routinely appealing the appraised value of their property. Senator Ellis’ SB 1084 would require commercial property owners protesting appraised value to compare their valuation to similar properties and would grant the right for an appraisal district to collect attorney’s fees if they win in court to discourage frivolous appeals. Senator Kirk Watson has also filed legislation to try and realign commercial property appeals with market values.

The problem is not just that the current law allows large commercial property owners to get out of paying their fair share – and therefore push a larger local tax burden onto homeowners.

When our property tax system treats some taxpayers differently, it undermines taxpayer support. In a recent statewide UT/Texas Tribune poll, 54 percent of respondents expressed dissatisfaction with property taxes despite the fact that property taxes are much less regressive than many other taxes used in Texas on the state or local level. This means that the amount Texans pay in property taxes as percentage of income is much more equal for high-income and low-income households. Only 34 percent of respondents were dissatisfied with the sales tax, on the other hand, which asks much more low-income Texans than those at the top of the income ladder.

CPPP Senior Fiscal Analyst Dick Lavine spoke at Senator Ellis’ press conference in favor of efforts to ensure all property is appraised fairly, and he repeated that property taxes pay for important local services. Schools, emergency services, community colleges, public hospitals and clinics, building inspectors, neighborhood parks, and libraries all benefit from local property taxes. When everyone pays their fair share, communities, homeowners, and business all thrive.

Learn more at http://youtu.be/t009YL-6ecY

 

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all. CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds to reach their full potential. We dare Texas to be the best state for hard-working people and their families.

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