Senate OKs Bill Allowing Lake Austin Owners To Avoid City Taxes

Austin TX

15 April, 2021

4:58 PM

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AUSTIN, TX — The Texas Senate approved a bill Thursday that would allow hundreds of Lake Austin shoreline properties to secede from the city of Austin to avoid paying city property taxes, the Austin American-Statesman reports. Senate Bill 659 from Sen. Dawn Buckingham, R-Lakeway, passed 18-12, with voting along party lines. Sen. Sarah Eckhardt, D-Austin, whose district encompasses all of the affected properties, voted against the bill, the newspaper reports. SB 659 is aimed at lakefront properties that have been inside Austin city limits since the late 19th century but were given a city property tax exemption because city leaders at the time did not think it was possible to provide taxpayer-funded services to areas that were far from Austin's center. In the decades since, those parts of Austin became home to some of the most valuable residential properties in Austin. A city report from 2019 showed their average value at $2.1 million, the American-Statesman reports. The exemption was brought to City Hall's attention once again after owners of a Lake Austin shoreline home who were paying city property taxes sued to get the same tax exemption as their neighbors. In response, the Austin City Council voted in 2019 to start charging affected property owners city property taxes. Faced with paying a city tax bill for the first time in early 2021, the owners of more than 200 of those properties sued the city. That lawsuit is ongoing. "For decades, these expensive properties had an inexcusable loophole designed just for them, and now they want it back," said Austin City Council Member Greg Casar in a Tweet. Casar helped lead the effort to begin charging those homeowners city taxes. "It's shameful that the Texas Senate would so blatantly choose donors over everyday people, and allow a privileged few to get out of paying their fair share." Buckingham has also filed a bill that would allow for the West Austin neighborhood of Lost Creek and nearby neighborhoods to disannex from the city as well. That bill remains in committee. While Austin benefits "from having the taxable property in their jurisdiction, residents are being forced to endure lagging emergency service response times and inadequate municipal services at no fault of their own," Buckingham said during Senate discussion of the bill Wednesday.City leaders argue that police, fire and EMS services are similar to those provided for any properties along the outskirts of Austin. Water, wastewater and trash services are fee-based services, and are not funded by property taxes. The city stands to lose roughly $4.5 million in tax revenue if all affected properties disannex from the city. To do that, homeowners will need to gather petition signatures from a majority of landowners, the newspaper reports. Read the Austin American-Statesman article.