The taxable value of new construction in Tarrant County went down this year, according to the appraisal district. Elected officials aren鈥檛 convinced.
鈥淧erhaps that鈥檚 not a real decrease,鈥� County Commissioner Roy Brooks said at an Aug. 15 meeting. 鈥淚 think it鈥檚 a function of what鈥檚 going on at TAD, and their inability to come up with precise numbers that we can work from.鈥�
Precise numbers 鈥� or the lack thereof 鈥� have been the name of the game this budget cycle. Taxing entities across the county received unofficial tax rolls showing strong growth in estimated property values throughout the spring, only to be caught on their heels when the July certified tax roll reflected almost none of that anticipated growth.
Due to the unexpected gap in property tax revenue, Fort Worth is considering its first , while Tarrant County is primed to cut its budget by $50 million.
The reported taxable value of new construction has drawn the most scrutiny. County commissioners received a briefing on this year鈥檚 values from County Administrator Chandler Merritt during an Aug. 15 budget meeting. Merritt said the certified values for new construction this year have dipped around 10% compared to last year 鈥� the first time since 2021 those values have decreased.
Commissioners found those numbers hard to square with the development they鈥檙e seeing around the county. Commissioner Manny Ramirez, who represents northwest Tarrant County, said he鈥檚 hopeful the appraisal district is correct, because every taxing entity relies on their accuracy, but said he鈥檚 concerned their conclusions are wrong.
鈥淚f we had a significant slowdown in construction or property values had gone down like they did in 鈥�08, OK, but that doesn鈥檛 appear to be the case this year,鈥� he said. 鈥淪o it is a bit questionable.鈥�
Arlington City Manager Trey Yelverton said his city has seen a lot of inconsistencies from the appraisal district over the years. He pointed to technology issues the district has faced, like the rollout of mass software appraisal system Aumentum in 2014, which resulted in millions of dollars . The district is currently looking for a new appraisal system to replace Aumentum.
鈥淭hat inconsistency leads to the kind of skepticism that you鈥檙e hearing about,鈥� Yelverton said. 鈥淎re we sure that鈥檚 right? You know, are we sure they鈥檝e got all the columns and rows the way they need to be? We just rely on them to do it.鈥�
The district鈥檚 new construction values also contrast sharply with its neighbors to the east. The Dallas Appraisal District reported an increase in new construction value this year, and Dallas specifically saw a $16.9 billion increase in total value, $5.1 billion of which .
鈥淚 would argue Tarrant County is the hotter market, if you will,鈥� Yelverton said. 鈥淭here鈥檚 more growth and activity in Tarrant than Dallas at this point. It probably will be that way for the future.鈥�
Residents have previously raised the possibility of missed commercial development in Tarrant County during appraisal district board meetings. When reached by email, Chief Appraiser Joe Don Bobbitt said he hadn鈥檛 seen the comments made by commissioners. However, he did know of one commercial property in Flower Mound that was omitted from the tax roll and brought to the district鈥檚 attention, and said the issue will be corrected.
Tax records reviewed by the Report show that when the certified tax rolls were approved, the property in question was designated as vacant residential property with a market value of $521,756. Now, the property is designated as commercial, with a market value of $5,439,822.
鈥淚 have not seen evidence of a systemic problem with the new value calculations or other missing properties,鈥� Bobbitt said. 鈥淲e would be more than happy to correct any additional missing properties if any are found in the future. We are looking at some solutions to help identify the possibility of new or missing structures, but cost will determine our potential timeline.鈥�
Local tax consultant Chandler Crouch, a at appraisal district board meetings, said there are two scenarios in which the appraisal district should be alerted to new construction: when a construction permit is filed, or when someone purchases new construction. Keeping track of all of those sales is a difficult proposition, he said, but overall the district does a decent job.
鈥淭he appraisal district owes it to everybody to make sure that their records are as accurate as possible,鈥� Crouch said. 鈥淎nd so any error like (the Flower Mound property), you鈥檝e got tons of people that are paying the price for that error, and it鈥檚 not fair, it鈥檚 not right, and it should be corrected. But the number of errors that I鈥檝e seen that are that egregious are pretty small.鈥�
Crouch was hesitant to label this year鈥檚 decrease in new construction values as inaccurate. He pointed to fluctuations in the real estate market over the past two years, including boomerang interest rates and increased inflation. When it became apparent that interest rates would remain higher in 2023, he said, builders ran into trouble.
鈥淏uilders were getting under contract, making commitments to buyers and then, during the six-month timeline that it takes to build a house, the price of lumber shot up, and they no longer had their profit margins, and so they would cancel the contracts and basically screw buyers,鈥� he said.
The annual certified values don鈥檛 tell the complete story, he continued, because they don鈥檛 capture any of those ups and downs throughout the year. Higher interest rates and decreased demand in 2023 all add up to a new construction market that could be less appealing than in 2022.
For the taxing entities, whether or not the numbers are accurate eventually becomes a moot point. Individuals get to protest their valuations, Yelverton said, not taxing entities like the city of Arlington. Helen Giese, director of budget and risk management for Tarrant County, echoed those sentiments.
鈥淭he (county) commissioners have that ability to doubt the information,鈥� Giese said. 鈥淚 work with the tax roll that I receive from Tarrant Appraisal District, as did every other entity in Tarrant County. And we just have to work with the numbers we have.鈥�
