Friday, November 11, 2016 by Jo Clifton

Austin loses appeal of appraisal district lawsuit

Texas’ 3rd Court of Appeals on Thursday firmly rejected the city of Austin’s attempt to get a judicial ruling on whether the alleged disparity between appraisals for residential property and commercial property meets constitutional muster.

Led by Mayor Steve Adler, City Council decided last year to file suit in district court against thousands of owners of commercial and vacant property, asking the court to declare that the Travis Central Appraisal District was undervaluing the commercial property and, in effect, shifting the burden of city property taxes to homeowners.

Although TCAD was a defendant, TCAD Chief Appraiser Marya Crigler stood by Adler at a news conference announcing the lawsuit last year, lending the weight of her office to the lawsuit.

Crigler said although TCAD is doing the best job it can with the data it has, it would be able to provide much more accurate appraisals if the state would require full disclosure of commercial sales prices.

In August, she told the Austin Monitor, “It is very time-consuming and costly for the appraisal district to get the data, … and sales data is one of the best indicators of market value. It’s a fundamental thing that we need to do something that the Legislature did not provide us as part of the tools to do the job that we need to do.”

The city requested that the court declare that the current tax appraisal system “fails to provide appraisal districts with the tools necessary to assess properties at market value and provide for equal and uniform taxation.”

However, the city’s litigation plan included several unorthodox maneuvers, including declining to present evidence during a hearing at the appraisal district. That proved to be a fatal flaw and District Judge Tim Sulak ruled against the city, setting up the appeal.

On Thursday, the appeals court said Sulak ruled correctly. According to the ruling, “The City’s constitutional challenge is a transparent attempt by a taxing unit to debate an issue of tax policy that is within the prerogative of the Legislature, rather than the Judiciary.”

Following the release of that opinion on Thursday, Adler told the Monitor via email: “I will continue to fight to make property taxes fairer for homeowners and all taxpayers in Austin. The court ruling says that only the Legislature can change the unfair policy that allows property to be taxed at other than its market value. We encourage our legislators to fix this unfair result. I congratulate the Travis County Appraisal District which, encouraged by this suit, is making great strides on their own to get tax values in Travis County more aligned with market value.”

Some commercial property owners, including Junk Yard Dogs and several other less colorfully named defendants, defended against the city’s challenge.

Attorney Lorri Michel represents Junk Yard Dogs, the owner of the office of Pro Tax, which represents homeowners and businesses challenging TCAD appraisals.

Michel said Thursday, “I’m thrilled and at the same time not surprised. I knew the judgment dismissing the case would be affirmed, and based on the oral argument it was very clear the three justices … were on top of the issues.

“I’m especially pleased at the speed with which they issued a thoughtful and well-written opinion. … To have issued this opinion as quickly as they did, I think, speaks to the importance of this case for all property owners, and I think this court wanted a resolution for the property owners,” she said.

“We understand that people have problems with the property tax laws and with the property tax system,” Michel said. However, she concluded, “This is a matter for the Legislature and not for the courts to decide.”

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Photo by That Other Paper made available through a Creative Commons license.

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Key Players & Topics In This Article

City of Austin: Our town

Travis Central Appraisal District: The tax appraisal district for Travis County.

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