The taxable value of new homes in Tarrant County has dropped this year, according to the appraisal district, but elected officials aren’t convinced.

“Maybe this isn’t a real decline,” County Commissioner Roy Brooks said at an Aug. 15 meeting. “I think it has to do with what’s going on at TAD and their inability to give us accurate numbers to work with.”

Accurate numbers—or the lack thereof—have been key this budget cycle. Tax authorities across the country received unofficial tax rolls over the spring that showed strong growth in assessed property values, but were then caught flat-footed when July’s certified tax roll reflected almost none of that expected growth.

Due to the unexpected gap in property tax revenue, Fort Worth is considering its first tax increase in 30 years, while Tarrant County is prepared to cut its budget by $50 million.

The reported taxable value of new construction has come under the most scrutiny. County commissioners were briefed on this year’s values ​​by County Administrator Chandler Merritt during a budget meeting on Aug. 15. Merritt said certified values ​​for new construction are down about 10% this year compared to last year – the first time since 2021 that those values ​​have declined.

Commissioners found it difficult to reconcile those numbers with the trends they are seeing across the county. Commissioner Manny Ramirez, who represents northwest Tarrant County, said he hoped the assessment district was correct, as every taxing authority relies on its accuracy, but expressed concern that its conclusions were incorrect.

“If there had been a significant decline in construction or housing prices had fallen like in 2008, that would be fine, but that doesn’t seem to be the case this year,” he said. “So it’s a little questionable.”

Arlington City Manager Trey Yelverton said his city has seen many assessment district discrepancies over the years. He cited technological issues the district has faced, such as the implementation of the Aumentum bulk assessment system in 2014, which resulted in millions of dollars not being accounted for on the tax rolls. The district is currently looking for a new assessment system to replace Aumentum.

“That inconsistency leads to the kind of skepticism you hear about,” Yelverton said. “Are we sure this is right? You know, are we sure they have all the columns and rows the way they need to be? We just rely on them to do it.”

The district’s new construction values ​​also stand in stark contrast to its eastern neighbors. The Dallas Appraisal District reported an increase in new construction values ​​across the district this year, and in Dallas specifically, there was a total increase in values ​​of $16.9 billion, with $5.1 billion of that coming from new construction.

“I would say Tarrant County is the hotter market, if you will,” Yelverton said. “There is more growth and activity in Tarrant right now than in Dallas. That will likely continue to be the case going forward.”

Residents have previously raised the possibility of overlooked commercial development in Tarrant County at assessment district board meetings. When contacted by email, Chief Assessor Joe Don Bobbitt said he had not seen the commissioners’ comments. However, he was aware of a commercial property in Flower Mound that was not listed on the tax rolls and had been brought to the district’s attention and said the issue was being corrected.

Tax records reviewed by the report indicate that when the certified tax rolls were approved, the property in question was reported as a vacant residential lot with a market value of $521,756. Now, the property is reported as a commercial lot with a market value of $5,439,822.

“I have not seen any evidence of a systemic problem with the new value calculations or other missing properties,” Bobbitt said. “We would be happy to correct any additional missing properties if any are found in the future. We are exploring some solutions to determine the possibility of new or missing structures, but costs will dictate our potential timeline.”

Local tax assessor Chandler Crouch, who is a vocal voice at assessment district board meetings, said there are two scenarios in which the assessment district needs to be notified of new construction: when a building permit is filed or when someone buys a new construction. Keeping track of all those sales is a difficult undertaking, he said, but overall the district does a decent job.

“The appraisal district owes it to everyone to make sure its records are as accurate as possible,” Crouch said. “And for every mistake like (the Flower Mound property), tons of people pay the price for it. That’s not fair, that’s not right and it should be corrected. But the number of mistakes I’ve seen that are this egregious is pretty small.”

Crouch was reluctant to say that this year’s decline in new-build values ​​was inaccurate. He pointed to the fluctuations in the property market over the past two years, including boomerang interest rates and increased inflation. When it became clear that interest rates would remain higher in 2023, builders ran into trouble, he said.

“The builders entered into contracts and made commitments to the buyers. But then, during the six-month period of building a house, lumber prices skyrocketed and they could no longer make a profit. So they canceled the contracts and ripped off the buyers,” he said.

Annual certified values ​​don’t tell the whole story, he continued, because they don’t capture any of those ups and downs throughout the year. Higher interest rates and lower demand in 2023 combine to create a new-home market that could be less attractive than in 2022.

For tax authorities, whether or not the numbers are accurate ultimately becomes a moot point. Individuals can protest their assessments, Yelverton said, but tax authorities like the city of Arlington cannot. Helen Giese, Tarrant County’s director of budget and risk management, agreed with that sentiment.

“The (county) commissioners have the ability to challenge the information,” Giese said. “I work with the tax roll that I get from the Tarrant Appraisal District, like any other agency in Tarrant County. And we just have to work with the numbers that we have.”