The neighborhoods may be different, but the battle cry is the same throughout Dallas:
“We pay taxes, so why don’t we get our share of City services?”
This month, as the City prepares its 1991-92 tax bills, residents have even more reason to worry about taxes.
During the past five years, we have seen property values decline and tax rates increase, while the City struggles just to maintain services. The Council’s budget debates during the past two years have turned into the bureaucratic equivalent of boxing.
Not only are homeowners unhappy, but relations among neighborhoods throughout the City are strained.
“East Dallas is the dumping ground of the City, along with West Dallas and South Dallas,” says Mike Simons, a real estate agent who lives on Richmond Avenue.
“And it’s stupid on the part of the City. This is the neighborhood closest to Downtown, and it could really turn into something if the City would pay attention to it and spend some money on it.”
Simons’ opinion is not unique among East Dallas and Lakewood residents. But is he correct? Do some parts of the City receive better and/or more services? The City, which has studied the issue, says no.
But statistics compiled from the City and from the Bruton Center for Development Studies at the University of Texas – Dallas indicate reason for concern.
An examination of tax appraisal values and selected City services in three comparable City districts indicates potential disparities. Although it’s difficult to draw conclusions, our study found that:
• A homeowner in a typical East Dallas neighborhood pays 22 cents per square foot in property taxes, compared with 26 cents per square foot in Oak Cliff and 29 cents per square foot in North Dallas. (The square foot analysis is based upon average home size.)
• There are three libraries within a five-mile radius of a typical East Dallas neighborhood, and one library within one mile. Comparable neighborhoods in Oak Cliff and North Dallas have four libraries within a five-mile radius and one library within one mile.
• East Dallas’ policeman-to-square-mile ratio is 2.5; in North Dallas, the ratio is 3.8, and in Oak Cliff, it’s 2.9.
• There are six fire stations within three miles of a typical East Dallas neighborhood, and two fire stations within two miles. In North Dallas, the numbers are seven stations within three miles and three stations within two miles; in Oak Cliff, there are 10 stations within three miles and three within two miles.
The statistics suggest what we’ve heard about for years: Dallas prides itself on running its government like a business. And most often in business, you get what you pay for.
The council-manager form of government, lauded for keeping politics out of the day-to-day bureaucracy, seems to do just that: The higher the tax base, the more taxes you pay; and the more taxes you pay, the more City services you receive.
None of this surprises Terry Miller, a dentist who lives on Bryan Parkway.
“The City is going to sacrifice inner-Dallas neighborhoods for outer-Dallas areas every time,” he says. “There’s no doubt about it.”
PROPERTY TAXES: WHO DECIDES HOW MUCH WE PAY?
School-age children aren’t the only ones dreading the approach of fall. So do their parents, because fall is budget time in Dallas.
Each fall, the five main local tax districts – the City, the county, the Dallas Independent School District, the Dallas Community College District, and Parkland Hospital – prepare budgets for the upcoming year.
Property taxes always have been an unpopular form of taxation because they require all homeowners to pay for all services provided. For example, homeowners without children still pay school taxes.
Historically, the appraisal system nationwide has been susceptible to political cronyism and favoritism (although such scandals have been rare in Dallas).
But cities and counties have few alternatives. Louisiana is the only state where most homeowners are exempt from property taxes, and its budget problems – as well as its admittedly poor government services – are notorious.
The City of Dallas receives two-fifths of its revenue from property taxes. The county receives almost one-third of its revenue from property taxes. Sales taxes provide only 26 percent of City revenue, and they aren’t collected at all by the county.
Each homeowner’s tax bill is compiled by:
• Determining the appraised value of the house. In 1990, the average appraised value of a Dallas County home was $83,955.
• Calculating exemptions, if any. The disabled and homeowners 65 and older don’t pay tax on the first $64,000 of appraised valuation; all other homeowners can receive 20 percent exemptions from their principal home’s appraised value. This means the average City resident (who isn’t 65 or disabled) will pay property tax on $67,164 of his average home’s $83,955 appraised value.
• Applying the various tax rates. In 1990, for example, the City’s tax rate was 62.97 cents per $100 of assessed valuation. This meant the average City homeowner paid $422.93 in property taxes to the City – divide $67,164 by $100, then multiply the result by .6297. The average homeowner also paid $738 to the DISD, and $262 to the county, community college district and Parkland. As a result, the average homeowner’s property tax bill was $1,422.93.
Texas law requires counties to appraise each property every three years. Dallas Central Appraisal District appraisers utilize an “appraisal to market value” ratio system devised by the Bruton Center for Developmental Studies at the University of Texas-Dallas.
The Bruton Center’s system divides the City into 3,000 neighborhoods and compares appraised values in each neighborhood with recent home sales values. The appraisal/market value plan’s goal is to maintain each neighborhood’s appraisal/market value ratio between .9 and 1.05.
For instance, if a home is appraised at $100,000 but sells for $80,000 (a ratio of .8) or $120,000 (a ratio of 1.2), then it may be time for the appraisal district to reappraise neighborhood homes.
WANT TO REDUCE YOUR PROPERTY TAXES? HERE’S HOW.
Property taxes are calculated by measuring two factors: a property’s appraised value multiplied by tax rates established by various taxing authorities.
Although an individual property owner has little control over tax rates, you can successfully contest the appraised value assigned to a property.
Texas law requires property to be appraised at market value each January 1. In Dallas, the Central Appraisal District appraises property and reports its valuation to each taxing unit (city, county and school district) for use in preparing tax bills.
If you believe the appraisal district overvalued your property, you can protest the valuation with the Dallas County Appraisal Review Board by filing prior to May 31 of each year.
Most protests are resolved informally with appraisal district staff after you have provided evidence supporting your claim, including sales contracts, closing statements, appraisals, and comparable sales.
If an informal settlement can’t be reached, you can take your case before the three-member review board, which will determine the property’s appraised value.
Although the protest deadline is May 31, the Texas Legislature recently passed a law allowing protests to be filed through the January 31 tax delinquency date, if certain conditions are met. Among the conditions: A property’s assessed value must exceed market value by at least 25 percent.
These protests typically are filed by homeowners who purchase property following the May 31 deadline at prices significantly less than the appraisal district’s valuation.
The process isn’t as intimidating as it may sound, and you can represent yourself throughout the proceedings: No legal representation is required.
But if you don’t want to deal with the appraisal district, you can hire a property tax consultant. You can find them on page 1596 of the Greater Dallas Yellow Pages, and you can expect to pay approximately $250 or a percentage of the tax savings for their services.
The quickest way to reduce property taxes is to ensure you have obtained all exemptions to which you are entitled. Many property owners simply don’t request a homestead exemption, which can result in up to a 20 percent savings on your property tax bill. In fact, you may even be able to receive a refund for taxes overpaid the previous year.
If you are unsure about the exemptions claimed for your property, or if you would like to know its appraised value, review recent tax bills or call the appraisal district at 631-0520.
COMPARING NEIGHBORHOODS: OUR METHODOLOGY
In many ways, neighborhoods are impossible to compare.
What does a $400,000 Preston Hollow home have in common with a $70,000 East Dallas bungalow? Or what’s the relationship between Winnetka Heights in Oak Cliff, which is dry, and Lakewood, which isn’t?
When making comparisons, however, it is possible to compare the dominant characteristics of “typical” neighborhoods in East Dallas, Oak Cliff and North Dallas.
Computer software developed by the Bruton Center for Development Studies at the University of Texas – Dallas helped us make the comparisons. The three neighborhoods selected are similar in many ways, yet each also is representative of its slice of Dallas:
• East Dallas. A 24-block area bordered by Skillman, Llano, Greenville and Prospect. The average appraised value of homes in this area is $68,151; the average home size is 1,542 square feet; and the average home is 65 years old.
• Oak Cliff. A 36-block area bordered by Colorado, Sylvan, Turner, Kings Highway and Lausanne. The average appraised value is $81,353; the average home size is 1,561 square feet; and the average home is 58 years old.
• North Dallas. A 16-block area within a larger section bounded by Marsh, Walnut Hill, Midway and Northwest Highway. The average appraised value of homes in this area is $62,578; the average home size is 1,078 square feet; and the average home is 40 years old. (This portion of North Dallas is slightly less affluent than surrounding areas, making it a better match with the Oak Cliff and East Dallas areas selected by the computer.)
THE YARDSTICK: PICKING WHAT TO MEASURE
Comparing City services by neighborhood is tricky business. For one thing, it’s almost impossible to measure certain services that aren’t geographic in nature, such as economic development: Development tends to benefit the entire City, rather than just one area.
And what services should be compared? Is it better to evaluate park services by the number of recreational facilities in each area, or by the programs offered at each facility, or some other measure altogether?
Finally, even after identifying services to compare, it’s impossible to draw ironclad conclusions. City planners, who have compiled two such studies during the past 18 months, say that, at best, they hope the studies help identify emerging patterns.
Still, it’s possible to spot trends.
We selected three measurable services – libraries, fire protection and police protection. And with the aid of a computer software program, we compared how the City dispenses these services in three “typical” Dallas neighborhoods: East Dallas, Oak Cliff and North Dallas.
The yardsticks used in our study were:
• Libraries. The number of libraries within walking distance (one mile) and within easy driving distance (five miles).
• Fire protection. The number of fire stations within a three- and two-mile radius. These distances allow the Dallas Fire Department to meet its goal of answering every call in less than six minutes.
• Police protection. The number of policeman per square mile.
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