During the 88th regular session, former Austin City Council Member and, now, State Representative (HD-19), Ellen Troxclair filed HB3899 to address Austin’s proposed financing mechanism for its light rail project.
HB3899 passed out of the House on the Local & Consent calendar, then was amended by Senator Paul Bettencourt and passed out of the Senate on a vote to 28-3. On its way back through the House, Representative John Bucy III (HD-136) raised a point-of-order that was sustained by the House parliamentarian, stopping the bill from passing in the final days of the legislative session.
This week, with the news of Austin's bond validation lawsuit, Representative Troxclair told us, “my bill to ensure the State law remains crystal clear about this was overwhelmingly supported by the Legislature, and I will continue working to ensure that all Texas taxpayers are protected from reckless financing schemes.”
“The City of Austin can’t just make up new and illegal ways to tax people,” she continued. “There are plenty of ways to finance infrastructure - an uncapped and indefinite 20% property tax increase, without proper voter approval, is not one of them.”
Normally in Texas, local governments ask voters to approve bond propositions with a set amount to be borrowed. If approved by voters, the bonds are reviewed by the Office of the Attorney General’s Public Finance Division and are paid back under the debt-service property tax rate, which is non-discretionary and not subject to annual appropriation by the local governing body.
According to filings in the Travis County District Court and attorneys in the case against Austin, this is the first time in Texas history this proposed financing mechanism has been used.
“At a time when the Texas Legislature has lowered school property taxes by 40% so that families can afford to stay in their homes, the City of Austin is suing to establish new ways to tax them out of town. If left unchecked, their proposed financing mechanism will proliferate across Texas, allowing cities unlimited access to taxpayers’ bank accounts without a clear idea of what their money would be spent on. In fact, Austin is already eyeing this new strategy to fund a ‘climate initiative.’”
State legislators worked into multiple special sessions to pass a historic property tax relief package that was finally approved by Texas voters in November of 2023.
In addition to the current proposal, in a recent City Council meeting, the Council passed a resolution to consider using a similar financing mechanism to fund initiatives to address climate change.
In a memo, Casey Burack, Executive Vice President of Business & Legal Affairs with the Austin Transit Partnership said they are “confident in our position, and we look forward to a judge hearing our arguments.”
The trial for the bond validation lawsuit has been set for May 28 to May 30, to determine if what Austin has proposed can be done under the laws of Texas.
