The EF-3 tornado cut a nearly twelve-mile swath of damage across north Dallas on October 20. Over 150,000 people were affected, according to Rocky Vaz, director of Dallas’ Office of Emergency Management.
This week, Dallas County commissioners and the Dallas City Council authorized the Dallas County Appraisal District (DCAD) to conduct reappraisals on damaged property and reduce property taxes accordingly. Dallas County Community College District also authorized the reappraisals.
Dallas Independent School District told The Texan it “is still evaluating” whether it will grant relief.
Commissioner J.J. Koch, whose district was heavily affected by the tornado damage, believes it is important to get money back in the hands of the property owners so they can repair and rebuild.
“It is also just pure rule of law, equity, and fairness that dictates reappraisal of these homes,” Koch told The Texan. “Taxes are based on the value of the property and the home value is not the same as it was.”
Dallas County staff estimated about $2 billion worth of property damage based on numbers issued by the Insurance Council of Texas. If that is an accurate estimate, the county will forego about $1 million in tax revenue this calendar year.
“We can absorb that loss with over $50 million in reserves,” County Judge Clay Jenkins said.
The property taxes due for the remainder of the calendar year (73 days from the date of the tornado) will be reduced based on new appraisals of the structure. Cheryl Jordan of DCAD said that land is not generally reappraised.
“I believe it does affect land value when we lose large trees and canopy,” said Dallas city council member Jennifer Gates.
“We’ll never be made whole because our homes are stigmatized now,” said Cindi Castilla, a resident of the Preston Hollow area. “Many older homes will be looked at as a teardown which is significantly less than what we are taxed on.”
DCAD will notify all affected property owners of reappraisals, but it encourages owners to document the tornado damage to their property with photos and repair estimates.
Either a revised property tax bill or refund will be issued, depending on when the reappraisals can be completed.
DCAD will not charge taxing entities for the reappraisals, according to Dallas County staff.
New laws impacting reappraisals
While the county has authorized similar relief in the past, a new law will require that all taxing units provide exemptions for qualified property damaged in a declared disaster area if the disaster occurs before the taxing unit adopts its tax rate for the year.
If the disaster occurs after adopting the tax rate, the taxing unit must vote for the exemption just as the county and city have done in this situation.
The law was passed during the last legislative session, authorized by the recently approved Texas Constitutional amendment in Proposition 3, and will go into effect on January 1, 2020.
Because Dallas County was declared a disaster area by Governor Abbott, the state-imposed cap of a 3.5 percent increase in property taxes triggering an election will not apply in 2020.
According to law, the cap will not be applied until the second year in which the total taxable value of property in Dallas County exceeds what it was in the year of the disaster. Instead, the tax increase cap will be eight percent before triggering an election.
Dallas’ chief financial officer, Elizabeth Reich, advised the city council to ask the tax office to calculate the “voter approval tax rate” for 2020 at eight percent instead of the 3.5 percent cap.
“We are asking for this flexibility to replenish the emergency fund as needed,” Reich explained. That part of the resolution was sent back to committee for further study.
The Federal Emergency Management Agency (FEMA) is conducting an evaluation to see if the uninsured losses in Dallas rise to the threshold ($38.5 million) for a Presidential Disaster Declaration to be issued.
The evaluation should be completed on or before November 30.
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Kim Roberts is a regional reporter for the Texan in the DFW metroplex area where she has lived for over twenty years. She has a Juris Doctor from Baylor University Law School and a Bachelor's in government from Angelo State University. In her free time, Kim home schools her daughter and coaches high school extemporaneous speaking and apologetics. She has been happily married to her husband for 23 years, has three wonderful children, and two dogs.