Most practitioners and property tax managers share a common bond: they feel that rather than being a system of adjudicating legitimate disputes, the property tax appeals process has become a system of rubber-stamping assessor values, even when those values are arbitrarily determined.

How could practitioners and property tax managers come to this conclusion? Simply stated, because it is the correct one. The property tax appeals system is inherently unfair, and is designed to provide maximum revenue collection and de minimus due process for taxpayers.

First, property tax appeals must be filed by September 15 of each year. Unfortunately, the tax bills aren't sent until October. There is no other California tax that requires a taxpayer to protest something before they know what it is. Counties and assessors have rebuffed efforts to address this issue legislatively by extending the appeals deadline until early December.

Next, the property tax is the only tax in this state that has to be paid prior to receiving an administrative protest hearing. Allegedly, this is necessary to ensure that local government continues to receive the funds necessary to continue operations. Historically, there may have been a basis for this in states where railroads (which constituted the majority of assessable value) refused to pay disputed taxes. But the property tax no longer constitutes the proportion of local government revenues it once did, and the remaining taxes that now make up local government revenues all have a provision that allows administrative resolution of disputed tax amounts prior to payment.

Even assuming that the basic property tax assessment is equivalent to the amount self-reported and paid with an income tax form and therefore payable prior to adjudication, that says nothing about escape assessments or assessments arising from business property tax audits. Here again, attempts to achieve even limited reform have been defeated by assessors and the counties.

Third, once an application for reduction in assessment is filed, the counties have taken the position that no amendments to that application can be made. Considering that at the time applications are due, tax bills have not even been sent out, it seems pointless to preclude taxpayers from amending their applications; that is, of course, unless it is to ensure that many people do not receive a fair hearing on their applications.

If one recognizes that most taxpayers don't understand the distinction between an application to reduce base-year value and a reduction in fair market value under Proposition 8, the prohibition on amending applications seems both punitive and inconsistent with due process. By contrast, administrative proceedings in the sales and income tax areas allow such petitions to be amended or augmented up to the hearing.

Next, once the county has received an application, the law provides that it can wait up to two years before granting an appeals board hearing. State tax agencies, under direction from the Legislature, are moving to shorten and accelerate the administrative appeals process. With modest exceptions, the counties have gone in the other direction with the property tax. During the 1990s, counties have repeatedly sought to extend the two-year limitation on property tax appeals hearings to three years.

As the old saying goes, "Justice delayed is an opportunity for the taxpayer to give up." The failure to promptly adjudicate disputes, either through traditional hearings or through some form of alternative dispute resolution, has made the property tax appeals process expensive, time consuming and prone to backlogs about which the counties complain. Moreover, when hearings are delayed for years, many taxpayers feel that there is a psychological bias against them because accumulated interest makes their prospective refunds much larger than they would be if hearings were held in a timely manner.

When a hearing is finally scheduled, the taxpayer is often surprised to find that the same "law firm" (county counsel) that is advising the assessor is also advising the supposedly impartial assessment appeals board. Especially in small counties, this could be a one- or two-person office where lawyer contact is inevitable. If not an outright conflict of interest, such a system certainly has the appearance of impropriety and weakens the confidence of taxpayers that they are, in fact, getting a fair hearing.

The body of law used to guide assessment appeals boards is also obsolete. Most of the Property Tax Rules and Assessor Handbooks, which provide the backbone of California's property tax appeals system, have not been substantially revised in over 20 years. Some are so obsolete that they are simply not used, while others reflect assessment practices based on a regulatory and business environment that has not existed for over a decade. The continued use of these documents has confounded taxpayers and has directly benefitted assessors who are able to avoid an objective body of authority to challenge their subjective assessments.

But maybe updated materials are unnecessary, given that "local rules" may virtually preclude anything but the property tax equivalent of a "show trial." The state Constitution allows counties to adopt local procedural rules for assessment appeals (it is controversial where the dividing line is between a "procedural" and "substantive" rule). This also has been abused at the expense of taxpayers' rights. Riverside County's infamous "Rule 10" allows the county to completely dismiss any application where the taxpayer does not supply all information requested by the assessor, even where the assessor bears the burden of proof in the appeal. Given that the assessor may not even provide the rationale for an assessment to the taxpayer for years to come, this "procedural" rule seems a convenient way to limit appeals. To its credit, the State Board of Equalization has sued Riverside County over this rule.

Los Angeles County had a different approach. When the county's legislative efforts to extend the two-year statute of limitations for property tax appeal hearings to three years were rejected by the Legislature, the county responded by passing a local rule limiting property tax appeals to 30 minutes, unless the taxpayer were willing to sign a waiver of the two-year statute of limitations, whereupon the time limit on the taxpayer's hearing was removed. In other words, because the Legislature refused to limit taxpayers' rights in one way, Los Angeles County found a better way to accomplish it locally.

And what of that fair and impartial fact-finding body, the Assessment Appeals Board (AAB)? At the very least, taxpayers may find themselves before a panel of three individuals who know little, if anything, about California property tax law, procedure or valuation. This is because of a loophole in the Revenue and Taxation Code that allows the appointment of AAB members whom "the nominating member of the Board of Supervisors has reason to believe is possessed of competent knowledge of property appraisal and taxation." This is a meaningless standard that allows virtually anyone to be appointed to an AAB. Although there have been numerous attempts to address this issue legislatively, AAB members still are only "encouraged" to seek training to be competent board members.

Worse, in smaller counties, the AAB may actually be the same county Board of Supervisors that is relying on disputed property taxes to balance its budget. What could be worse than arguing a property tax case before supervisors who must choose between upholding an acknowledged overassessment or creating a budget shortfall that might close a hospital?

Next, AABs have discovered that they can save themselves a lot of time and money by asking taxpayers to prepare proposed findings of fact. Taxpayers end up paying an attorney or agent substantial sums of money to draft proposed findings. To add insult to injury, many taxpayers have found that the county counsel representing the AAB merely copies the findings submitted by the taxpayer (for which the taxpayer has already paid an attorney to draft) and then sends its own bill to the taxpayer for county counsel time to redraft the findings.

Finally, there is the unbridled joy taxpayers feel at the prospect of going to court to vindicate their rights in a property tax dispute. The California property tax is the only major California tax that does not allow for de novo review of a taxpayer's tax assessment. Consequently, taxpayers may not introduce any new factual evidence to the court, nor may the court independently review the AAB's factual determinations about the validity of the assessment. The court is virtually required to uphold the assessment if there is any conceivable way the AAB could have come to its conclusion. Counties and assessors have resisted the reform of this grossly unfair provision with a vehemence that transcends mere interest in a fair trial. Rather, it suggests that they view the standard of review as a means to preserve a huge advantage they have in the system that virtually guarantees them victory in all but the most blatant of circumstances.

This system of justice is not in a Third World dictatorship, but in California, a state that proudly touts its taxpayer-friendly, pro-business environment. That any taxpayer could ever prevail under this system is the best objective proof we have of the existence of a Supreme Being. The frustration, the expense and the perversity of outcomes engendered by the property tax appeals system should be an embarrassment to policy makers at all levels. But for those legislators and Board of Equalization members who have tried to change the system, even slightly, their reward has been opposition by assessors and counties and attacks, often personal and vicious, against their reputations.

Incredibly, the response of the assessors and the counties has been to sponsor legislation to stack the deck even further against taxpayers. Last year, AB 1027, sponsored by the California Assessors Association, would have been a comprehensive reduction of taxpayer rights in areas ranging from information gathering and subpoena powers to allowing local governments to intervene in state-assessed utility valuation hearings.

AB 1027 did something no other bill did during the entire session - unite the business community. Over 100 businesses and associations united to oppose the bill, which was overwhelming defeated on the Assembly floor. Assessors need to understand that their effort to pass AB 1027, using taxpayer dollars to deprive taxpayers of their rights, infuriated taxpayers and confounded legislators.

Maybe it is not so amazing that assessors cannot understand why taxpayers feel so cheated by the property tax system. After all, assessors are most familiar with a different part of a property tax system than most practitioners and property tax managers. Assessors, first and foremost, are charged with assessing property at fair market value and "getting the roll out." This is a difficult and demanding process to be sure, but one that has grown to be far more administrative and managerial than subjective and professional.

By contrast, most practitioners interface with the property tax system after the assessment has been made, when the taxpayer is contesting the value established by the assessor and is subject to all of the injustices described above. These practitioners and tax managers usually work in multiple areas of taxation or in property taxation in multiple states and are familiar with the other systems of adjudicating tax disputes. They are offended by the stark contrast between those systems and the California property tax appeals system.

The property tax appeals system, as well as the overall system of property tax administration, is sick. Its illness stems from years of systematic neglect by the counties, the State Board of Equalization and the Legislature. Far from benign neglect, however, the descent of the property tax appeal system into obsolescence has benefitted counties and assessors disproportionately. The unfairness that angry taxpayers feel translates into disrespect for the system.

The time may or may not be politically opportune to engage the appeal system comprehensively, either through the legislative process or through an initiative. But no matter what the political timing, there should be no mystery whatsoever on the part of the assessors and the counties as to why the property tax system has engendered such ill will amongst California's taxpayers.