All property owners who are owned property tax refunds should expect to receive them soon since Tarrant County commissioners agreed to spend $7 million from the general fund to cover the payments.
Commissioners’ decision on Sept. 20 to step in will allow Tarrant County Tax-Assessor-Collector Ron Wright to issues refunds rather than wait until new tax year payments begin arriving in October.
Wright said his fund for refunds had about run dry when his office received notice from the Tarrant Appraisal District (TAD) that $8.7 million in refunds were due taxpayers on top of $3 million that was already pending.
Refunds are typically a routine matter, which occur as exemptions for homesteads, seniors and others are applied to property values or as a result of litigation settlements.
But Wright said an “unprecedented” event occurred when his office received the July list of refunds on Aug. 19 with 80,000 changes and about 5,200 refunds, amounting to $8.7 million. The tax office already had outstanding refunds of $3.5 million, raising the total due taxpayers to nearly $13 million.
Alarmed by the amount due, Wright sent notices to cities, school districts and other taxing entities notifying them that he would not send tax payments for operating until the refunds were paid because the tax office’s funds were running dry.
“The timing was terrible right at the end of the budget year,” Wright said.
Wright and others said a TAD software upgrade in April was at fault for the haphazard receipt of the refunds and the untimely arrival of “the big one.”
TAD has been crippled by software problems since a new system was installed in 2014.
This latest snafu with the refunds follows a bevy of problems, including the undervaluation of property in 2015. Despite a hot real estate market that was boosted home sale prices by about 9 percent, the county’s value rose only 5 percent from 2014 to 2015.
As a result, a state audit of property values to determine state aid for school districts nearly jeopardized some state funding for Tarrant County districts. A state-granted grace period provided a reprieve.
To bring property values in line with market values, taxpayers have been hit with a 14 percent increase, which has led to a record number of tax protests of more than 100,000.
Other problems with valuations continue to persist. At an August meeting of the Commissioners Court, Judge Glen Whitley questioned a dramatic drop in the value of mineral values from $2.7 billion a year ago to about $9.7 million this year.
“The price of natural gas did not drop that much from last year to this year so why all of a sudden have we lost value,” Whitley said.
An outside auditor has been hired to identify and correct problems with the software system and TAD operations.
TAD Chief Appraiser Jeff Law blamed the software system for the agency’s problem, which Wright and other county officials call “systemic.”
“Like others that have gone through similar transitions, we did have some software conversion issues over a period of time,” Law said. “We have apologized to those we serve.
“In addition, we have held back significant payment to the software vendor until further notice,” Law said.
Law also apologized for the recent chaos created by the recent list of exemptions, with most due to homeowners.
“We must and will do better with the timing and coordinating exemption and value related changes with the Tarrant County tax office going forward,” Law said.
Wright said his office staff has worked overtime to reduce the refunds down to 2,675. Most of the remaining refunds must be recalculated, which is likely to extend into October. By law, refunds must be issued within 60 days or interest begins to accrue, he said.
The $7 million will allow the tax office to cover all the refunds and disburse the remaining $3.5 million to the taxing entities within the county, Wright said.
Wright told commissioners that he intended to hold back a $1 million refund to General Motors because “people come before corporations.”
Whitley said he opposed holding back money to any property owner due a refund.
“No refunds should be held up,” Whitley said. “This county has a Triple AAA bond rating and could have advanced the money on day one.”
Property tax bills will be mailed out at the beginning of October so the tax office should have enough to repay the county’s general fund by the end of the month, Wright said.