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As bad as things appear with the loss of millions of dollars in local property taxes for schools, the financial problems could have been worse if the Texas comptroller’s office had not stepped in to avert a potential double whammy.
The threat of state cuts occurred because of a mismatch between the property value estimates reported by the Texas Comptroller of Public Accounts and the Tarrant Appraisal District. State law requires a difference of several percentage points, and fixing the difference can lead to a process in which local entities could lose substantial revenue.
The school districts dodged the potential financial disaster when the state comptroller declared a two-year grace period and used the local appraisal district’s lower property value estimate, instead of its own, to calculate state aid.
“I was sick to my stomach and sweating BBs at the time,” said Jim Schiele, chief financial officer of the Eagle Mountain-Saginaw school district.
Now school CFOs like Schiele are hoping that TAD appraisals will be in line with the comptroller’s estimates in 2016. After next year, the comptroller may not give school districts a pass if TAD’s appraisals don’t appear realistic.
“I don’t have any more get-out-of-jail free cards,” Fort Worth district CFO Elsie Schiro said. “God forbid that something goes wrong.”
The problems were created by the software conversion of more than 1.6 million property tax records at the Tarrant Appraisal District, which resulted in some incomplete appraisals and slowed down appraisal activities for several months.