September 15, 2006
Williamson County landowners battle taxman for agriculture valuation
By Bobby Horecka
After 22 years of traveling the world in the military, one looks forward to settling down to a less complicated life; at least that's what one retired Navy veteran said he was planning.
So he bought a 100-acre farm near the Williamson-Milam County line, and set about building his homestead and clearing acreage for farm uses.
Roughly two-thirds of the land he leased to another farmer to raise crops such as corn, milo and wheat. The rest, barring his two-acre home site, went to raising emus.
But like most of his neighbors in what's become a booming development market outside Austin, taxes got the better of him, he said. Those two acres where his home rests went from costing a mere $27 when he bought the place in the 1990s to about $525 last yearnearly a 2,000 percent increase in a span of just 15 years.
"It just got out of control, particularly on a fixed income," he says. "The price of corn and milo sure isn't going up, but taxes sure are."
And he's not alone.
In fact, this landowner, whose identity is being withheld for fear of reprisal from the local tax appraisal district, is one of more than 4,000 rural Williamson County landowners who attorneys say are overtaxed to the combined total of more than $2.5 million per year.
In gist, explains attorney David Braun, the appraisal district targets property that qualifies to be taxed under the "agriculture valuation" provisions of the Texas Constitution in a scheme that allows this valuation on all but what appraisers dub the home site acreage.
For the most part, landowners are taxed on ability of the land to produce agricultural income, Braun said. But the catch comes with the appraisal of that last acre or two. In addition to the land itself getting a higher appraisal, taxes are also assessed on the home and any improvements found there.
The end result is people paying anywhere from $400 to $600 more in taxes each year, Braun says. Countless challenges to the appraisal system have been made over the years. So far, the attorney says, they've fallen on deaf ears.
"The land either qualifies for the agricultural valuation or it doesn't," the veteran and farmland owner said. "But instead, in our county at least, we have to prove to what degree the land qualifies for the ag-use valuation."
And that's setting a dangerous precedent, farmland proponents say.
Leigh-Anna Martinets is someone you could call the poster child of the land dispute since attorneys with Braun's firm filed the case against the Williamson County Central Appraisal District last year.
She's made several camera appearances with local newspapers and television crews, explaining the plight of rural landowners in Williamson County. Her property consists of only 13 acres, but it is part of a larger 2,000-acre tract dedicated to wildlife preservation and shared between some 200 other landowners.
Her plot stands undeveloped in its entirety, clumps of cedar intermingled with live oaks and waist-high bunch grass in the few, sparse natural clearings. She has no power on the place, nor is there a well, road or fence of any sort. About the only hint of human existence comes with a few small, wooden bird houses tacked high in the treespart of her plot's biologist-prescribed wildlife programand a lone, wooden picnic table set under a canopy of oaks near the back of the place.
The property holds a wildlife valuation, which lands the bulk of her acreage on the tax rolls at about $4,000 per acre, she says. All but one acre, that is. It's worth $30,000, according to the taxing powers that be.
So which one is it?
"Take your pick," Martinets says. "I sure can't point it out to you."
It's a prime example of exactly how obtuse the taxing system is, said State Rep. Dan Gattis (R-Georgetown), an area rancher and attorney who has joined in the legal team for the landowners of Williamson County. In addition to lending his lawyer skills, Gattis has vowed to take the issue to Austin and says those very differences in the valuation practices from county to county will be addressed.
"The appraisal system as it exists today was originally set up to keep politics out of the appraisal process," Gattis said. "Unfortunately, what it also did was remove the accountability in place, leaving people with little recourse when it came to addressing their concerns."
That lawsuit, which has grown from 30 plaintiffs last year to more than 225 today, seeks to correct the tax rolls and compensate landowners their legal fees.
But despite the seeming surge of support for the suit, many remain tight-lipped about their problem.
The retired Navy veteran introduced earlier is among them. Although he says he hasn't yet joined the suit, he said many who have are already facing repercussions.
"They're being threatened with losing their ag-use valuations altogether," he said. "Williamson County has set up a heavy thumb on our landowners out here, and they just keep adding the pressure."
Back in July, a group of more than 100 Williamson County rural landowners, who have formed the non-profit group Concerned Owners of Texas Rural Land (COTRL) in response to the taxing issue, met with attorneys in Georgetown to plan strategy for the case ahead.
And while most of the plaintiffs in the case are looking to recoup the $600 or so they believe they're overcharged, there is a far broader issue at stake, said consultant Charlie Carter, a COTRL spokesman.
"Williamson County is starting a trend other counties will likely follow," Carter said. "For those involved in the lawsuit, it's far more than just a few dollars saved in taxes. It's a cause. We need to stop this virus before it spreads across Texas."
Texas Farm Bureau leaders agree.
"Taxing a single acre of a farm or ranch at a higher value than the rest of the property negates the purpose of valuing land based on its use for agriculture," said Joe Maley, Texas Farm Bureau's organization director who spoke to local newspapers regarding affected member properties in Williamson County.
"The intent of agricultural valuation is to allow agricultural producers to continue to provide a safe and stable food supply for all Texans, the nation and globally," Maley said. "In our opinion, the actions of the Williamson County Appraisal District have no basis in law. If their actions are upheld, it will allow every appraisal district in Texas to negatively impact and subvert the intentions of the Texas Constitution."
Although they're the only county in Texas making use of such a taxing system, Williamson County Chief Tax Appraiser Bill Carroll maintains his methods are sound.
"We genuinely feel we are doing exactly what the Legislature is asking us to do," Carroll said in a recent television news interview. "And that's treating all of our taxpayers equally and fairly.
"We think we're doing things right," Carroll added. "All districts do things differently, and the bottom line is, is the market value correct or not?"
That, for now, will be left for the courts to answer, an answer that could take a while if legal maneuverings offer any indication.
Local media outlets report that the Williamson County Appraisal District recently filed court paperwork to handle each case separately rather than as a class action suit. If judges approve that request, the matter could be tied up for years in the legal system.
Williamson County has changed a lot in the last decade and a half. Where rugged pastures of cedar, scrub oak and jagged limestone once filled the landscape, urban shadows of houses, strip malls and industry now flourish.
Roads that were once two-lane country byways with maybe a car or two a day have become spaghetti bowl interchanges carrying thousands to and from the Austin metroplex daily.
So when taxes started their upward ebb, most landowners say they simply wrote it off as the price of economic development.
It wasn't until they had paid their bills and began close examinations of the billing statements that the new taxing system implemented three years ago came to light.
By that time, the taxes were already paid and they were out the cash. And with countless stories of appraisal challenges going unchanged, most say they simply kept their grievances silent.
Besides, the Navy veteran said, if you argue the valuation and happen to win, what will the future hold?
He says he challenged his land appraisal a few years ago and actually got $27 whacked off his tax bill. The next year, however, found his taxes at about $150 more than before the challenge.
Not long afterward, when he paid off the land loan and cleared the title to his place, he says he had to appear before the board to justify his agricultural use valuation, despite having lived and farmed the place for 10 years.
"We need a system that defines and protects our ag-use valuation," he said. "Instead, it seems we have a system that looks out for the best interests of the appraisers. It's sort of like foxes appointing other foxes to watch the hen houseit just doesn't make any sense."