Posts Tagged ‘Texas’

Another successful property tax protest!

June 5th, 2009

Here in Texas there are only two certainties in life: death and property taxes (and probably mosquitos). Property taxes out here are ridiculous (for my home, I pay a rate of about 2.5% of the taxable value of the property every year), so there is a lot of incentive to protest your assessment. I did this for the first time two years ago using a third party consultant with limited success and had to pay the consultant half of the computed tax savings. Then last year I did the protest myself, and got my assessment dropped $28,000 on a home previously valued around $160,000, which is described in more detail here. I protested based on both unequal assessment and misclassification of the condition of the property, which meant I had to go down to their offices and provide pictures to argue my case.

As can be expected after last year’s big decrease, the appraisal district tried to recoup some of the lost valuation by unreasonably upping the assessment. My assessment went up over 8%, while my immediate neighbors each went down 4.4%. Harris County allows you to file online and request a settlement offer, and I did so with the reasons that the “value of the property was over market value” and “value is unequal compared with other properties” and with the following pithy argument:

The properties adjacent to mine had assessment reduced by 4.4% each, however mine was increased 8.2%, which proves unequal assessment. Subject property is not a magical place shielded from the economic realities of the world around it as the Appraisal District appears to believe. Considering the falling properties values in this neighborhood and across the county, the assessment of this property should be no more than prior year level, if not reduced a similar percentage to adjacent properties.

I submitted my protest with my opinion of property value at around $129,000 (versus their $146,000), and earlier this week got my settlement offer back at around $130,000. The reduction of $16,000 in market value represents a tax savings of about $400, all for about 15 minutes of work in looking up my neighbors’ properties and filling out the form. Plus since I did this myself, I get to keep all the savings!

I’d advise everyone to protest their assessments and do it yourself. You can find some good information in my post on last year’s protest here.

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Posted in Home Ownership, Taxes

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Protesting at the Tea Party!

April 16th, 2009

The wife and kids are out of town visiting family this week, so I decided it was time to let loose and get a little crazy. Yes, I and thousands of other rightwing extremists attended the Houston Tea Party protest yesterday!

Unless you are watching Fox News or reading some blogs, you may not have even heard about these, so let me give you a quick introduction. Taking cue from CNBC commentator Rick Santelli’s famous “rant heard ‘round the world”, groups of concerned citizens around the country used social networking and the internet to organize modern-day tea parties to protest the current direction our government and our country.

I had never attended a political protest before in my life. For people I talked to in the crowd, most of them never had either. Some were there for a specific reason like the size of government, deficit spending, high taxes, states’ rights infringement, or lack of government accountability. Some were there out of a general discomfort of the actions of our government and elected officials. All of us are sicked and tired of a government and politicians that seem to have no regard for our wishes and whose actions we seemingly have no control or influence over.

Contrary to some media reports, we are not all a bunch of Republican Party operatives. I am just your average 30-year old accountant, working for a living and would almost certainly be classified as middle-class. I have never run for elective office or worked on the campaign of anyone who has. I have never volunteered for any political party or donated money to any party or candidate. Although I am registered to vote as a Republican, I am generally disgusted with both parties and would by no means be considered a party loyalist. In other words, the idea that I am just a tool of the Republican Party is utter crap.

Most of the people there were just average working class folks. I got there about 2 hours into the protest and the plaza was absolutely filled with people. The organizers said on their blog that a total of 8,532 people signed in at their registration table, and there were likely many that didn’t sign in (myself included) that puts their estimate at 10,000. As the rally went on from 4pm under after 8pm, there were likely significantly fewer than that number there at any given time as some early birds left as others just getting off of work arrived. I’d say while I was there there were probably about 5000 people there at any given time. Considering so many people have to work to pay their taxes making it difficult to attend, I think this is a great turnout.

So what did I find interesting about the protest? A few things…

·         When you hear the word protest, you often think of an almost violent affair of unreasonably angry people. That certainly wasn’t the case in Houston. Everyone was incredibly polite, and when the protest was done the discarded signs were all placed in the trash bins so we probably left the plaza cleaner than we found it. This certainly wasn’t an angry, destructive, unruly mob that you would normally associate with a protest.

·         Thankfully there wasn’t a whole lot of representation from the Tin Foil Hat Brigade (conspiracy theorists). Other than one woman who was ranting something about Obama controlling the internet, the closest thing to a fringe position was one guy holding up a sign promoting Texas secession, which in Texas isn’t really a fringe position (heck, even our governor has alluded to the idea in the last week). Not that it is wrong to be suspicious of your government, but spouting off unsubstantiated allegations of the government conspiring against us detracts from the real message and undermines its credibility.

·         I was kind of annoyed by the Fair Tax proponents latching onto the protest. Fair Tax is the concept of replacing the income tax with a national consumption tax. As much as I dislike the current income tax structure, I generally think a consumption tax is a very bad idea, which may be why those people annoyed me.

It was really a great experience, and I would certainly do it again. I will post a few pictures after while.

Before I end this post, let me say a few words about the political nature of many of my recent posts. I realize many of you visit this blog looking for personal finance advice and couldn’t care less about politics. However, what many people don’t realize is that for many middle-class families taxes are your biggest expense. Remember that this includes income taxes, property taxes, social security and medicare taxes, sales taxes, fuel taxes, and many other levies we are forced to pay to support our government. The more our government spends, the more it will likely have to raise taxes to pay for that spending, either now or by issuing debt and shifting the burden to some point in the future. The other alternative is that the government could devalue the currency by putting more dollars into the money supply, leading to high rates of inflation. Either of these scenarios would have deep impacts on the finances of the average family, which is what makes it in my mind a personal finance issue. As I mentioned a few weeks back, there is so much uncertainty in the current environment I have trouble giving traditional personal finance advice just because it seems the rules of the game could change at any moment, making what could seem like a good decision now an absolutely horrible one in the future.  I will work to give personal finance advice that I think could be beneficial no matter what may come, however I will avoid posting advice based on the notion that we live in a static environment and that the rules will be the same in the future as they are today. If you wish to stick your head in the sand and seek out such advice, there are many sources for it online. If you want to hedge your bets a little in case tomorrow isn’t quite what everyone expected, you are in the right spot.

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Posted in About, News/Trends, Taxes

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Off-topic (politics): The Texas Solution

March 6th, 2009

While browsing the internet this past weekend, I came across a little known tidbit that could hold the key to stopping the agenda of President Obama. As shown during the stimulus debate, the Democrats have near complete control of both the legislative and executive branches of the federal government. While they do not have the magic filibuster-proof number of 60 in the Senate, they were able to find three RINOs (Republicans in Name Only) to go along with them and there is little doubt they could do the same in the future.

But what if there were 8 more seats in the Senate, all filled by Republicans? While not as well known as the idea that Texas reserves the right to secede from the Union at any point because it was previously a republic (which is just urban legend, btw), there was a provision in the agreement under which Texas was admitted to the Union that allows Texas to at any point divide itself into as many as five different states. As each state is allotted two senators by the Constitution, that would result in 8 additional senators. Assuming that all of those additional senators were Republicans (in Texas, very likely), the make-up of an expanded U.S. Senate would be 58 Democrats, 48 Republicans, and 2 Independents. As Senate rules require a three-fifths supermajority to stop a filibuster, the new magic number would be 64. The result is that Democrats would have to make concessions to the Republicans in order to allow any bill to come to a vote.

Am I saying this is likely to happen? Of course not. Texans are way too prideful to allow their beloved state to be subdivided. I think Texas secession is much more likely than Texas subdividing. But it does make for interesting political theory, doesn’t it?

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Posted in Off Topic

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The 99.99¢ Only Store?

January 30th, 2009

Here’s one for you that is just kind of funny. I went out the other night to my local 99¢ Only Store looking for a real plunger to help fix a clog in our kitchen sink (the plunger we had is one of those fancy plastic ones with a small mouth that wouldn’t fit over the drain opening in the kitchen). For those of you unfamiliar with the store, it is a chain of discount stores based out of California that advertise that they sell nothing over 99¢. They are pretty nice and large for dollar stores.

Anyway, as I was searching for the plunger (which they ultimately didn’t have), I noticed several signs that said “99.99 cents Only”, with the second 99 in small font. I initially thought I must be misunderstanding the sign, thinking surely they weren’t advertising prices including fractional cents. To my surprise when I got to the checkout, everything rang up $0.9999, which of course rounds to $1.00 per item. I guess things are bad when even the 99¢ Only Store raises prices! The other odd thing I noticed was that they were now selling full gallons of milk for $2.8999. I don’t see how that fits with the whole “nothing over 99(.99)¢” mantra, but I guess no one would realistically think they could get a gallon of milk for 99.99¢.

On a side note, I noticed in researching this story (which I could find no mention of on their website) that they announced in September that they are exiting the Texas market entirely. Too bad because they really are cool stores, even if things aren’t really 99¢ anymore.

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Posted in Customer Service, News/Trends

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Time to re-evaluate your electric contract

November 11th, 2008

Here in Texas, we have this crazy thing referred to as a deregulated electrcity market. Unlike most other areas of the country where electric rates are heavily regulated by the state public service commission, here multiple providers are allowed to market electricity directly to consumers at whatever price they like, with a third party maintaining the lines and infrastructure.

Since contracts are based on current market prices, the rates fluctuate over time. For instance, in June I signed a one-year contract at a rate of $0.178 per kWh, which at that time was a very competitive rate. I had to sign because my previous contract expired and the alternative was to go to my provider’s month-to-month plan at about $0.25 per kWh.  

Since I signed my contract, the rates have come down significantly. Why? The majority of electricity is generated using natural gas, the price of which spiked over the summer and has since come crashing back down. I decided to look into whether the rates had fallen far enough to where it would make since to break my contract and pay the early termination fee of $69.95. I was shocked to find that the I could now get a two-year contract at a rate of $0.134 per kWh, a difference of $0.044 per kWh. Assuming usage of 1500 kWh per month (not a stretch in a 40 year old 2800 square foot home), my savings would be about $66 per month. In other words, I would almost completely make up for the early termination fee in the first month.

So if you were forced into a contract during this summer’s peak in electric prices, it would be a good time to re-evaluate your contract and see if breaking the contract makes since. In Texas, you can find the current offers in your area at PowerToChoose.org.

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Success in protesting our property taxes!

August 21st, 2008

I posted previously about my decision to protest my property tax assessment, and my time to present my case to the appraisal district finally came this past week.

Being the obsessive-compulsive accountant type, I diligently put together my protest and evidence for my meeting with the appraiser. My protest for a lower appraisal was based upon three points:

  • Actual sales for comparable properties in our neighborhood in were much lower than the appraisal they provided for our property.
  • The appraisal district overrated the condition of our home due to previous foundation issues, cracks in our sheetrock, the need for repainting, the age of the roof, and other factors.
  • The area around our neighborhood has seen a major increase in crime after Katrina, with a large concentration of low-rent apartment complexes, several of which have now been condemned and are homes to squatters and criminal activity.

So I went in for my meeting with the appraiser armed with a typed summary of my case, a copy of the previous seller disclosure form and pictures to evidence the defects to the property, the listing of recent sales in the neighborhood with what I thought were the most comparable properties highlighted, and a map showing the number of apartment complexes around us and several recent stories from the newspapers discussing the crime issues and the condemnation of these properties.

So what was the result? I was able to get the appraiser to reduce the taxable value by nearly $28,000, which out here where our tax rate is about 2.52% of the appraised value results in a tax savings of nearly $700! The appraiser used the pictures and seller disclosure I provided along with one of the comps to justify the reduction.

So what lessons did I learn from this experience? Let me share a few:

  1. Take the time to do the protest yourself! I used a third party to protest last year under similar circumstances and they were only able to get a reduction of only $7000, and I still had to pay them a commission of half of the projected tax savings.
  2. Pictures are worth a thousand words, and probably a few thousand dollars of valuation! Part of my argument was that the condition was overrated, and the pictures I provided definitely helped prove the point. I took about 30 pictures, and the appraiser looked through all of them and retain about 5 for their evidence file.
  3. Arguments about the issues in the area did not help. The appraiser dismissed this as justification of a lower valuation on the basis that lower values on this basis would be reflected in the comps.
  4. The comps were important, but the appraiser would not consider several of them. At least in Harris County, they would not consider sales that were related to foreclosures or estate sales. The argument was that these are valid comps since they involve a motivated seller, however I would argue that these properties compete with others on the open market.
  5. In Texas, house sale data is NOT public information. Realtors can pull the information, however it is not publicly available. However since the appraisal district must provide you all the evidence they had related to your valuation, they will provide a listing of the sales information as part of the evidence package to use in your protest. Because the sales data isn’t public and the appraisal district will provide it to you, I would recommend protesting even if you don’t know what other area properties sold for. There may be great evidence of a lower valuations in the evidence they provide you don’t even know about, and if not you can always just not bother following through on the protest.
  6. While the appraiser would consider defects to the structure itself, they would not consider defects to items like the fence and driveways. According to the appraiser, the guidelines for appraisals in Texas do not allow this to be considered.

So overall I am very satisfied with the experience. I spent probably about 12 hours filing the paperwork and putting together and presenting the protest, and that time resulted in a savings of $700. It really isn’t that difficult of a process and I would certainly recommend to anyone pursuing a protest.

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Posted in Taxes

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