The Dallas Morning News

Tax Roll Sees 16 Percent Jump Dallas County: Credit goes to New Construction, Commercial Market

26 May 2006

For the second year in a row, a healthy commercial market and growth in new construction has helped boost Dallas County property values, giving the county its highest increase in five years.

The preliminary tax roll jumped to $158.3 billion – up 16 percent from last year’s final certified numbers, according to the Dallas Central Appraisal District.

It included $4.2 billion in new construction – the highest in years. Slightly less than half of that came from commercial properties. Many cities saw double-digit percentage increases in property values.

The higher values translate into more tax revenue. That’s good news for cities and school districts, but not for property owners. The preliminary totals will drop significantly as many homeowners challenge their assessments.

County Budget Director Ryan Brown predicts the county’s final number will drop to about $147.5 billion. Still, that would be 7.3 percent higher than last year’s certified tax roll. He expects new construction numbers will fall to about $3.4 billion.

If so, that would translate into $5.2 million in additional tax revenue for Dallas County’s budget next fiscal year, he said.

“Every little bit helps,” Mr. Brown said. “They’re good numbers. They show solid growth across Dallas County.”

The county’s budget has been straining to cover pay for state- and federally mandated improvements to staffing, health care and cleanliness at the county jail.

The jail has failed inspections three years in a row, and the county is spending millions to replace medical equipment, pay for jail guard overtime and improve laundry service, among other things.

County Judge Margaret Keliher said that the numbers are encouraging and that she hopes the increase will allow the county to absorb additional spending without a tax rate increase next year.

“We know we have issues the county needs to address,” she said. “We would like to be able to do it without raising the tax rate.”

Chief Appraiser W. Kenneth Nolan said his office has received about 1,000 more property value protests than this time last year. But he said he doesn’t expect an overall increase when the protest deadline arrives Wednesday.

Commercial properties make up 37 percent of the preliminary tax roll, but they account for about half of the overall preliminary tax base increase. “I think the commercial market has seen somewhat of a renaissance in the last year,” Mr. Nolan said.

Outside forces often affect the market, he said. For example, institutional investors as well as out-of-state and overseas investors are driving the commercial market in Dallas because of their different expectations.

“In their mind, commercial real estate is still undervalued in the marketplace compared with other parts of the country like California,” he said.

‘Sorely needed’