San Antonio to study property appraisal process. Will it ease your tax burden?

click to enlarge Property values in the near East Side neighborhood of Government Hill have climbed in recent years. - V. FINSTER / SAN ANTONIO HERON
V. Finster / San Antonio Heron
Property values in the near East Side neighborhood of Government Hill have climbed in recent years.
Editor’s note: In a unanimous vote Thursday morning, the city council approved the study. District 1 Councilman Roberto Treviño abstained from the vote, as chairman of the Bexar County Appraisal District board of directors. District 4 Councilman Rey Saldaña was absent.

This week, as 2019 appraisal notices are sent out to property owners across the county, the city council will likely hire a company to study the practices of the Bexar County Appraisal District (BCAD).

The move, which has the backing of all council members, would be unprecedented in that a taxing entity—in this case, the City of San Antonio, as one of more than 60 within BCAD—would analyze the appraisal and protest data of its appraisal district.

The city council is expected to approve the $79,780 study, which will be conducted by Oakland, Calif.-based Economic & Planning Systems, Inc., on Thursday.

District 8 Councilman Manny Pelaez, who spearheaded the study, characterized it as a quality control check from “BCAD’s biggest customer.” He said he’s fielded complaints from property owners, both residential and commercial, about their valuations. He wants to compare BCAD with other appraisal districts in counties of similar size across Texas to see if there are any irregularities.

One of Pelaez’s objectives: to see if BCAD’s practices are driving away business from San Antonio, and therefore might have a negative impact on this city’s economy.

“There is no data anywhere that has ever been compiled that shows the impact that our valuations have on our economic development and the profitability of businesses and the cost of homeownership,” Pelaez said.

For its part, BCAD says it simply follows the Texas tax code, which requires properties to be appraised at market value from Jan. 1.

“There’s very little discretion in what I get to do,” Bexar County chief appraiser Michael Amezquita said. He added his decisions at BCAD extend to matters of personnel and budget.

“That’s the argument I’ve heard as well,” Pelaez said. “The answer to that: Then you have nothing to worry about. The study is going to prove that out … Yet, I suspect that’s not going to be the case. It’s a quality control study for us.”

Amezquita said he doesn’t instruct his staff on how to value properties.

“They are certified licensed professional appraisers and they have a code of conduct and code of ethics that we all have to subscribe to,” he said. “And they know the charge, and the charge is 100 percent of market value. We also know what the reality is.”

Amezquita said many owners of high-valued commercial properties use what’s called an equity appeal, one of two options all property owners in Texas have in which to challenge their valuations, to significantly lower their tax burden.

“It literally has turned into a cottage industry for tax agents and [for] commercial property [owners] to avoid paying their fair share,” he said of the tax code amendment, in which a property owner can protest their valuation by claiming their property was treated differently than similar properties, approved by the Texas Legislature in 1997.

Supporters of the equity appeal say the amendment adds fairness to the tax system, a rebuttal made in this recent Texas Tribune article.

As for the City of San Antonio’s review, Amezquita said he follows the direction of the appraisal district’s board of directors, which happens to be chaired by District 1 Councilman Roberto Treviño. In February, when the City Council was scheduled to approve the one-year contract, Pelaez told his colleagues he wanted to wait until the BCAD board met, to allow the agency time to join in funding the study.

The agenda for Thursday’s council meeting shows the city proceeding with the study independently, but mentions the appraisal district is willing to cooperate.

“None of us are necessarily sure what more information (the study) may bring,” said Treviño, who was appointed to the BCAD board before he became a council member in December 2014. “The appraisal district is held to state law and run by the state comptroller’s office and has to be measured against certain laws and rules, and that’s what it’s doing.”

“I think hopefully, in the end … out of this we can plan a creative way forward to help provide some property tax relief,” Treviño added. “If not, at least some property tax education that can help shape policy.”

Amezquita said the Texas Comptroller’s office reviews all appraisal districts using what’s called a property value study (PVS), used to determine the wealth of each school district in Texas, and the methods and assistance program (MAP), which reviews a district’s administration, mapping, procedures and governance. He said BCAD has ended up passing every year.

If the study does show what the city considers irregularities, it’s unclear what power San Antonio has in changing the way BCAD values properties.

If nothing can be done at the BCAD level, Pelaez said options available to the city include lowering the tax rate, increasing the number of homestead exemptions, and “whether or not we advocate at the state level and change the structure of appraisal districts.”

When asked whether this study was being done more for the benefit of commercial property owners rather than residential owners, Pelaez said, “It’s for anybody who pays taxes.” He added, “If we’re going to be closing this housing gap, and if we’re going to be building up the housing stock … how we burden them is relevant topic to discuss.”

Pelaez said the timing of the vote was not politically motivated, considering the municipal election is May 4. The vote was originally scheduled for Feb. 21, but was postponed to allow more time to bring BCAD on board.

“I’ve heard … “Ah, you’ve timed this four days after the valuations,” Pelaez said. “Remember, we filed this a year ago. To me, the study needs to be done right.”
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