Office owners should play fair with taxes
If property taxes are on your mind now, you aren’t alone.
The owners of Houston’s biggest office towers are wondering about their tax bill, too.
While the law states that everyone should pay tax on the market value of their property, huge companies that own the skyscrapers you see around Houston often don’t. Why? Building sale prices aren’t public in Texas, which is one reason appraisers aren’t able to properly calculate the tax. This lack of transparency leads to lower initial values. Unlike residential property tax appeals, large property owners manipulate and flood the system with endless appeals that reduce their tab for city services, schools and hospitals.
I saw the beginnings of this as vice-chair of the City of Houston appraisal review board back in the 80s. The system was overburdened from the start.
The Houston Chronicle’s Loren Steffy found that on a sampling of properties with sales information, building owners paid tax on about 60 percent of the market value “at a time,” Steffy wrote, “when city and county budgets are stretched. It’s almost as if there’s two sets of books: one for the buyers and sellers, and one for the tax man.”
Based on data from the Harris County Appraisal District (HCAD), the Houston Organization of Public Employees estimates that since 2005, low property tax appraisals and appeals made by the top 500 properties in town have cost the City of Houston more than $500 million and more than $1 billion to HISD.
In the meantime, schools in my district are underfunded, road repairs are pushed back, and we aren’t doing enough to promote healthy communities.
There are plenty of examples, but I won’t pick on one of the buildings. Most high-end office building owners in Houston take advantage of the system and regularly protest already low valuations — for many it’s a rite of spring. High lease rates and occupancy levels, sky-high corporate profits and record building sales create a solid case that the valuations of these buildings are too low.
That’s why I’m happy that Mayor Parker is doing something that shows that we, the citizens of Houston, take the issue seriously and are going to get off the bench to fight for Houston’s future.
More than 100 people filled Council Chambers on Tuesday to urge city government to fight for fairness in the property tax system. They left with a solid promise from Mayor Annise Parker to assist an overburdened HCAD and to push the issue in Austin.
State law governs most of our property tax system but the mayor’s statement on Tuesday will bring some transparency to this broken system.
I grew up poor in South Texas. A quality education made the difference for me; it is the best chance for many children in my district to end the cycle of poverty. We owe it to the future of our city to make sure everyone pays their fair share so that our schools and communities are places of opportunity and hope for the next generation.
It’s time to get real about the future of our city. We can’t keep subsidizing multibillion-dollar companies’ property taxes.
I’m glad to see that Houston is leading the way. I expect other cities, school districts, hospital districts and voters will follow our lead. Tuesday was a great day for our city. This could set our state on a course to ensure that the biggest building owners in Texas pay what they really owe, not what the system allows them to get away with. Garcia, a Democrat, represents Houston in the state Senate.