Miami-Dade’s appeals system for property taxes relies on antiquated software and a jumbled scheduling process that helped cause a backlog responsible for millions of dollars in delayed payments to local government, according to a new watchdog report.
Written by the county Inspector General’s Office, the report concludes that the property-appeals system is in much better shape than in recent years, with staffing changes and a more stable housing market easing the strain. But the system still suffers from an inefficient administrative system that could save time and money with improvements and more employees, the report said.
“It has to be resourced appropriately. It has to be run like a court system,” Mary Cagle, Miami-Dade’s inspector general, said in an interview. “Because it’s really important to the citizens and the county that… it be done timely and efficiently.”
At issue is what’s formally known as the “value adjustment” system — the appeals process for property owners to challenge the real estate values issued each year by the elected property appraiser. The Property Appraiser’s Office defends those value rulings before the Value Adjustment Board, which can save a taxpayer substantial sums of money by striking the original appraisal in favor of a lower amount.
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Last year, the school system blamed the VAB process for $60 million in lost revenue, and Miami-Dade pegged its VAB loss at about $27 million. The appeals process is managed by the county’s elected clerk, Harvey Ruvin, and overseen by an appointed board. In responses included in the report, both Ruvin and Property Appraiser Pedro Garcia said most of the recommendations were being implemented.
The report calls for the VAB to revamp its software to track complaints, citing a VAB official who called the agency’s computer system “antiquated.” Described as plagued by “inaccurate data,” the computer system is not designed to even track complaints, according to the report.
138,597 property-tax appeals in 2009
61,159 property-tax appeals in 2014
And with more than 61,000 appeals last year, the system relies on a manual scheduling system that “requires an extraordinary amount of time and effort by staff.” The report faulted the appraiser’s office for not adequately staffing appeals hearings in the past, or coordinating with the VAB in providing the kind of information needed to speed-up the scheduling process. Representatives of Garcia and Ruvin’s offices were not available for interviews Monday.
Hearing the appeals is a crucial step for the school system, since state law allows it to recoup revenue lost in the process once the county finalizes all value decisions. That process took a staggering 19 months in 2008, as the housing market collapsed, but was narrowed to 10 months in 2013. The 2014 values still haven’t been decided, and the report cites an “herculean” effort needed to complete all the hearings in the current backlog
In a statement, the school system said “the OIG report reveals poor management, inefficiencies, misinterpretation of law and disregard for [state] regulations as significant reasons” for collection shortfalls. “We are hopeful that swift implementation of the 16 recommendations contained in the OIG report will reduce – if not altogether eliminate – funding shortfalls that deprive local students and teachers of the state promised annual appropriation.”
Appeals spiked above 130,000 in 2009, in the depths of the housing crash that wiped out billions of dollars in real estate value across the region. The pace has been dropping ever since, and finished 2014 at 61,159—a drop of more than 50 percent.
It is difficult to imagine that tax agents are putting in their time and effort on a significant number of petitions on the hope that they will be paid for their services
Inspector General report
The report blames the crash for the most of the appeals, saying the plunging prices prompted property owners and professional tax agents press for even lower values. It does not address Miami-Dade’s outsized share of appeals: a 2014 report by the state Inspector General found Miami-Dade has twice as many parcels in the appeals process as Broward County. Cagle said Miami-Dade’s large number of investment properties may have encouraged more appeals.
In the report, Cagle’s staff takes aim at one of the most widely cited explanations for the surge in tax appeals: VAB rules allowing a professional agent to appeal a property’s value without the owner’s permission. The IG report said data show little impact from third-party appeals, possibly because any savings won would then be sent directly to the unsuspecting property owner.
“It is difficult to imagine that tax agents are putting in their time and effort on a significant number of petitions on the hope that they will be paid for their services,” the report said.