Land of Opportunity

Dade's property tax assessment appeals system features sloppy record-keeping, a lack of oversight -- and a whole lot of money for those who know how to ask for it

Jose Milton became nearly a half-million dollars richer on June 20. The well-heeled Coral Gables contractor didn't win the lottery, cash in an exceptionally prescient stock investment, cut a lucrative real estate deal, or come into a windfall inheritance. Like thousands of his fellow Dade Countians, Milton simply appealed the property tax assessments on his Dade County holdings.

And he won.
Unlike the less affluent hordes who race to their appointments with the Value Adjustment Board, Milton did all his negotiating behind the scenes, ensconced on the other side of the fabric partitions that separate the honchos from the hoi polloi in the Dade County Property Appraisal Department. The day his hearing was scheduled, Milton didn't even bother to show up.

In his absence, Special Master Pedro Lopez absent-mindedly initialed the fourteen-property deal Milton had worked out with county appraisers. In fact, Lopez gave so little thought to the changes he had made -- changes totaling at least $412,761.26 -- that five months later he couldn't remember seeing the case.

Such is the numbing nature of the property tax appeals system.
Last year 28 special masters, the lay "judges" who decide tax appeals, whacked more than one billion dollars off Dade County's tax base, shrinking tax revenues by $31.5 million. Included in the numbers were some whopping reductions: $350,865.45 for the owners of the Omni International Mall; $308,374.53 for the Fontainebleau Hilton; $258,057.51 to Koger Properties, a megadeveloper of office parks in West Dade.

To the unsophisticated taxpayer, the mere thrill of manipulating such massive quantities of moola (not to mention the impact of reductions on Dade County public services) might seem enough to make these decisions memorable, but most special masters appear to have difficulty recalling even the vaguest details about their cases, no matter how colossal the sums.

Lopez, who also ruled on the Sheraton Bal Harbour's appeal, is at a loss to explain why the luxury hotel merited a reduction of $170,813.55. "I don't remember the specifics," he grouses. "It must have been warranted. You study the case, and if the property is overassessed, you grant a reduction."

Special Master Manuel Blanco had a similar memory failure regarding Koger Properties, although county records show that on March 2, Blanco ruled on 32 different Koger parcels, lowering the total assessment by several million dollars and lightening Dade's tax kitty by more than $250,000.

"You know how many properties we hear in a session?" Blanco asks testily. "We hear around 50 properties, and you are there once a week for five or six months. It would be impossible for me to tell you what I did on a particular day or what happened with a particular piece of property."

Given that some special masters have been reappointed for more than a decade, it's plausible that individual cases would become indistinguishable, that when looked at a certain way, a $25,000 homestead exemption (worth about $778 in tax dollars) would appear identical to a $71,619 reduction to a developer (the amount Blanco granted to an outfit known as United States Development Ltd.). But while figures may tend to blur, the toll on the county's budget is easy to quantify.

Property taxes account for 61 percent of Metro-Dade's general fund, which pays for everything from libraries to police protection, public hospitals, roads, and parks. Last year $746 million in property tax revenues went into the general fund, while an additional $309 million was set aside for other parts of the county budget and millions more were distributed to local municipalities.

How much property tax you pay is determined by the assessed value of your property, which is designated by county appraisers. The assessed value multiplied by the millage rate set by city and county governments yields your tax.

If the county makes an error in assessing your property, the Value Adjustment Board hearings provide a forum for redress. The special masters are supposed to right wrongs, correct mistakes, and ensure that millions of dollars aren't unfairly funneled into (or out of) county coffers. (For more on the way the appeals system operates, see sidebar.)

How well is the system working? In an effort to analyze the process, New Times examined all the appeals filed in 1994, looking for problems that have plagued the property tax appeals process here and across the nation: questionable patterns in tax appeal approvals, such as obvious favoritism toward the rich, powerful, or well connected; indications of payoffs; and improper relationships among special masters, employees of the Property Appraisal Department, and representatives hired by property owners.

The study was based on data New Times purchased from Dade County's Information Technology Department. Sorting the records with the Microsoft Access database program yielded one immediate discovery: The county's computer data were in sloppy shape.

The records are rife with typos. Thirty-nine reductions were attributed to two masters who didn't exist, while hundreds of other reductions, ranging from a few hundred to a few hundred thousand dollars, weren't attributed to any particular special master and would have required extensive research to track down. New Times's requests for information about inconsistencies in the data took weeks to answer because the programmer most familiar with records no longer works for the county.

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