COVID-19 and property assessment appeals
COVID-19 and Property Tax
Property Tax Appeals Process
Jun 17, 2020
The current state of emergency triggered by the COVID-19 pandemic has affected business and property owners in various ways. Government officials on all levels are pondering the next steps to help residences in their respective localities. Plans to aid Houston in recovery are still in the works and officials are taking steps to bring about further relief.
Houston city residents, like many others, have been waiting for updates on the relief efforts. Property owners especially are looking for a similar break like the ones given to them after Hurricane Harvey hit the city in 2017. Not only are Houstonians looking for a tax break but they have also been looking for a response from Mayor Sylvester Turner. Residents, however, don’t show much worry in regards to his response as they know he’s working on an extensive concrete plan.
After Harvey, Mayor Turner gave regular updates regarding recovery but none were as extensive as his official press conference that he held at city hall six months after the natural disaster. During that time he gave an overview of all of Houston’s accomplishments, funding, the budget, future recovery plans that had already been put in place, and essentially helped to get the city back on its feet. His success and strong planning abilities in leading Houston’s recovery are what gave him an advantage with voters to vote him in for a second term against challenger Tony Buzbee.
Mayor Turner is known for leading the city’s remarkable rebound after Hurricane Harvey and being the “voice of calm” for other government officials and citizens after Harvey tore through Houston. Mayor Turner has been diligent in creating a sustainable plan that would give citizens hope regarding the city’s financial state. It’s safe to say that property owners were anticipating this information seeing that tax bills were sent to them in the midst of this rising pandemic.
Of the one million tax bills sent at the beginning of March to property owner reflecting the January 1st appraisals, 74 percent of properties in Harrison county alone increased in value by an average of about five percent. Only 10 percent of properties saw a decrease in their taxes; 16 percent remained the same. The assessor’s office is preparing to see a higher number of appeals filings this year than last due to COVID-19. The fear of a rise in affordable housing and a tax break in the coming year are also topics of discussion among residents and officials like Mayor Turner. While property tax is not the only area of the city that is in need of some resolve, it is one of the largest branches that will be affected. With property and sales tax being two of Houston’s most relied upon financial sources, it is possible that the decline in sales tax will naturally increase property tax to make up for just some of the budget loss.
According to Houston County Tax Appraiser Jack Barnett, if the option to alter the tax code were to be made, lawmakers would have to take this upon themselves to dictate a modified tax code. A tax code that already governs the appraisals began on January 1 that determined this year’s current tax bill. (The bill was originally altered after Hurricane Harvey.) Many Houston residents started receiving their bills in the mail at the beginning of March, making the urge for state and county officials to deliver a paramount break on taxes. However, some of the state officials like Senator Paul Bettencourt say things are only going to get worse as long as the Stay Home Stay Safe orders are in place. To change laws and codes would only further complicate the situation. It’s possible that the declines in sales tax and the current property tax dilemma will both play a part in determining the plans for relief.
Mayor Turner already has mentioned these two areas in his current city budget, as they represent the city’s largest annual funding categories and now the most depleted. Due to his knowledge of the deficit, Turner is now proposing a possible furlough of about 3,000 municipal jobs to help close the gap. Before the new budget, Houston was estimating a deficit similar to that of the $300 million in 2008. The mayor’s current budget is set at $5.1 billion dollars, an increase of $62.2 million from the previous year. This still leaves Houston with a financial deficit of $169 million.
Houston’s current population is approximately 2.3 million people and more than 1 million of those citizens have filed unemployment claims since the pandemic began. The city was taxed with business closures and lay-offs. Houston officials do not succumb to the fact that residents are not likely to pay their current tax bills. It’s estimated that the city will lose approximately $187 million will be lost without those owners paying this year’s taxes.
With the effects still in up the air, it is very likely that Texas might see an increase in property tax to make up for certain losses such as sales taxes. Appraisal districts across the state do have the authority to increase property values by 10 percent, in turn increasing taxes. However, Houston does have laws that limit the cities’ ability to collect some revenue since the budget has been released. While there have not been any direct claims limiting the collection of property tax specifically residents are still encouraged to proceed with the standard filling and appeals process.
As the state of Texas approaches hurricane season with a $169 million deficit, concerns of a lack of an emergency fund are even greater. The once available $20 million emergency fund (also known as the rainy day fund that is used for national disaster during this time) is now depleted, with those funds being reallocated to help the budget gap. The $187 million from property tax would have closed the budgetary gap but the constant submission of appeals and extensions doesn’t promise that this will ease up any time soon. We can only hope that our environmental state is much calmer than years previous.
While the relief plan is still not concrete, the city was recently awarded $404 million through the CARES Act. This reward can only be used for Coronavirus prevention and relief effort. This money can not be added to Tuner’s new budget to aid in other areas with a deficit.
After weeks of waiting to receive this information, Houstonians can only hope that things will get better for the city financially. Mayor Tuner made note that the city was just getting back on their feet from previous financial struggles; this is the fifth year that he and his administration have struggled regarding the budget. While there are still unanswered questions, the city now has a budget and can begin the road to recovery. For property owners, however, help if any is still unclear.
Siegel & Callahan, P.C. is singularly focused on property tax appeals serving clients throughout the United States.
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