Tax Lawsuit Against State Dismissed

A Travis County district judge dismissed a state property tax lawsuit brought up by the city of Austin.

The decision was made Friday in a Texas courthouse. The city filed the lawsuit in August and argued that the appraised values of billions of dollars in commercial and vacant land do not match market prices, a violation of the state Constitution’s requirements that all property be taxed “in proportion to its value” and in an “equal and uniform” manner, according to The Texas Tribune. 

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District Judge Tim Sulak agreed with challenges to the suit that were brought on by several property owners at a hearing on Friday, according to the paper. One of those challenges was that the city didn’t have the standing to challenge the constitutionality of the state’s property tax system at a hearing, according to the paper. Austin Mayor Steve Adler was not happy with the decision. 

“We need a court to rule on the fairness of the property tax system,” Adler told the paper. “The court’s decision today did not reach this question.”

Attorney General Ken Paxton, on the other hand, believed the dismissal was a good decision for Texas taxpayers.

“The City of Austin’s attempt to rewrite Texas law was beyond the scope of their authority and put all property owners in the state at risk of higher taxes,” Paxton said in a statement. “We are pleased the judge ultimately dismissed this lawsuit, giving Texans a voice against unlawful efforts to increase tax revenue without input from lawmakers or taxpayers.”

Austin officials were arguing against an appraisal system that many critics have said is increasingly stacked against homeowners, according to the paper. They argued that a process call equity appeals make the rules easier for commercial and industrial property owners to win big reductions in their values, according to the paper. Austin officials were hoping to use the suit to challenge Texas being one of only a few states that do not require disclosure of sales prices of real estate transactions for appraisal purposes.

According to the paper, Adler plans to continue pushing for changes in the property tax appraisal system, regardless of whether city council decides to appeal the court’s decision. 

“The City of Austin’s challenge is brave, creative and in uncharted territory,” Adler said. “We’re going to keep trying until we find a way to make the tax system more fair. I am proud to be part of a city that takes risks to stand up for fairness.”