ustxtxb_obs_1970_11_27_50_00011-00000_000.pdf

Taxes and timber Dallas Nine months ago Ralph Nader held a press conference in San Antonio to point out that oil and gas property in the Permian Basin is substantially undervaluated for the purpose of taxation \(Obs., investigators working under Nader’s supervision have discovered the same sort of undervaluation of timber property East Texas and commercial and industrial property in the Houston area. At a press conference in Dallas recently, Nader said that although citizens this fall have been subjected to campaign rhetoric concerning the problems of local government, no one has been talking about “the most fundamental of all problems facing local governing bodies the revenue crisis.” “In nearly every state the property tax provides the overwhelming portion of this revenue for our cities, counties, and school districts,” Nader said. “But the serious inequality in valuations and assessments continues to deprive local governments of funds. The State of Texas, which is first among the states in oil and gas reserves, first in cattle, first in cotton, and first in livestock, is rated near the bottom of the list in its attention to the basic social services. This does not need to remain so. Property tax reform can bring millions in lost revenue.” NADER, PERHAPS the nation’s most effective consumer advocate, has established a clearing house for information and technical assistance for citizen groups interested in property tax. reform. Nader says his primary aim is to reduce the proportion of local property taxes borne by individual home-owners and small-businessmen by making sure that large economic interests pay their fair share. The East Texas study, conducted by Sharon L. and William L. Feather and Louis J. Sirico, all University of Texas law students, covered six counties and nine school districts. “It reveals an astounding disregard for the ‘equal and uniform’ valuation required by law,” Nader said. The team \(which obtained estimates of the fair market value of timber land from state-employed and independent forestry appraisers, a forestry professor from a local university, an East Texas tax assessor, estimates of damage from a recent fire, and estimates made at a Senate hearing on the undervaluation of approximately 52%. As an example, Nader cited Liberty County where the assessed valuation at full value is $130 an acre. The tax assessor admits that the current selling price in the area ranges from $250 to $300 an acre. “In Angelina County,” Nader said, “the assessed valuation at full value of $40 an acre is in direct contradiction to timber experts quoted in the Lufkin News \(July 9, an acre. In the last year alone, Angelina County lost between $140,000 and $250,000 in revenue because of undervaluation,” he said. East-Tex Southwestern Timber Co., owning property in four counties and two school districts, is being undertaxed by approximately $158,600, according to the Nader team’s calculations. Kirby Lumber Co., with property in five counties and three school districts, is being undertaxed by $140,000 a year. Temple Industries, which has property in six counties and three school districts, is saving $89,400 a year through undertaxation. Nader estimated the annual total revenue loss in the surveyed districts to be nearly $800,000. “If this pattern holds true for the entire 37-county East Texas area, it means a loss to the counties and school districts of approximately $38.4 million a year,” Nader concluded. IN HOUSTON AND Harris County, University of Houston law student Kim Quaile Hill found commercial and industrial property to be undervaluated for the county by nearly 70% and for the city at approximately 60%. Hill compared the assessed valuation at full value on city and county records to reports in the Houston Post real estate section of important sales_ The Valley Forge Apartment complex at 6225 Hilcroft, for example, was purchased for $4 million last year and it is carried on the city tax rolls at its equivalent full value for only $1,029,050. The Friendswood Development Co. bought $7 million in land and pays taxes to the city on an equivalent full value of only $3,218,450. A report in the Houston Chamber of Commerce magazine cites both minimum and maximum values for 16 industrial parks. Nader said the article revealed an undervaluation of approximately 50% in the county and 65% in the city. “Houston public officials who have been hotly criticized by the state Water Quality Board chairman for failure to deal with the city’s water pollution crisis claim that the tax dollars to finance the badly needed cleanup are simply not available,” Nader pointed out. “Consequently, Houston has never initiated even a rudimentary water pollution inspection-enforcement program.” Nader held his press conference two days before the general election, and his comments no doubt helped to defeat Amendment 3, which he said would authorize a “further special break for the timber industry.” The amendment “would allow the timber industry to pay a tax based not on the value of the property, but … a tax in effect based on the increase in value of the timber in a single year,” Nader said. “This would be in sharp contrast to the tax on the homeowner, who pays his tax on the value of his home, not on its annual increase in value.” Nader was highly critical of Texas officials who ignored or dismissed his property tax recommendations nine months ago. This time he recommended: “That Chairman Ben Atwell of the State Commission on State and Local Tax Policy discharge the legal responsibilities of his office and order an immediate investigation into the shocking illegalities disclosed in this report. “That a state board be established to hear taxpayer grievances, to recommend relief in the form of tax refunds when necessary, and to provide public lawyers to assist the corhplaining taxpayer. “That the practice of delegating the appraisal function to private firms be eliminated and that the state provide the appraisal service to local taxing districts when requested. “That full disclosure of the precise formula used in property evaluations be made by all individuals and organizations performing the appraisal function. “That a state board be created to pass upon the qualifications of the local tax assessors and be given the power to remove such assessors for cause.” The property tax study was directed by Richard Mithoff, Jr., a U.T. law student. Nader’s clearinghouse on property tax information is being run by Sam Simon, a lawyer on the staff of the Public Interest Research Group, 1025 15th St., N.W., Suite 601, Washington, D.C. 20005. K.N. November 27, 1970 11 MARTIN ELFANT, Sun Life of Canada 1001 Century Building Houston, Texas CA 4-0686