The city passed a revised budget after Prop Q, which would have raised an additional $110 million in taxes, was defeated in the November election.
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The move comes two days after the governor declared the two were foreign terrorist groups.
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The Paramount will close in June for at least eight months, and work on the State Theatre will follow. The venues launched a $65 million fundraising campaign for the projects Wednesday.
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Abbott fought for months to keep secret emails between his office and Elon Musk. Now, hundreds of pages have been released.
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Senate Bill 10, which requires public schools to display the biblical text in classrooms, has sparked multiple legal challenges from civil liberties groups.
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The longtime Austin Democrat had previously said he would not seek reelection if the state's newly drawn congressional map, which favors Republicans, went into effect.
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A federal court in El Paso had earlier Tuesday placed a temporary block on the map that Republican lawmakers passed this summer and ordered the state to use the district maps from the last two elections.
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In a statement, Attorney General Ken Paxton alleged Leander and Round Rock ISD officials and board members "blatantly disregarded the will of Texas voters who expect the legal and moral heritage of our state to be displayed in accordance with the law."
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Abbott filed the designation letter Tuesday.
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