Travis County commissioners are facing a lawsuit over a 9.12% property tax increase they approved in September.
Typically, local governments can only raise the tax rate 3.5% without voter approval. The lawsuit argues the commissioners court misused a section of Texas tax code that allows local governments to raise taxes by a higher amount without voter approval for one year when state and federal leaders issue a disaster declaration for the area.
The plaintiffs are the newly elected mayor of Lago Vista, Shane Saum, and Jeffery Bowen, a former Austin mayoral candidate and owner of a small construction company. Both said they are Travis County taxpayers in the lawsuit. They are represented by attorney and former Travis County Judge Bill Aleshire.
Travis County leaders said the tax increase will generate $42 million to pay for damages caused by the July 5 flood and prepare the county for future disasters. The county spent more than $21 million responding to the flood and effectively zeroed out its emergency savings account. Officials said more costs could still be accrued.
County leaders have yet to lay out exactly how the additional revenue generated from the tax increase will be spent. Commissioners court members have proposed improving low water crossings in vulnerable areas or fixing substandard roads.
Those ideas were not explicitly about areas impacted by the July flood. But plaintiffs in the lawsuit argue spending the $42 million on anything other than costs associated with the flood is a misuse of tax dollars.
“If they wanted to do that, they should’ve asked the voters for agreement, and not tried to use — misuse — this exception for the disaster tax,” Aleshire said. “It is not a provision that they can use to set up a slush fund that they can use for road improvements.”
Although the tax rate increase was approved in September, the lawsuit wasn’t filed until Nov. 5, the day after voters overwhelmingly rejected Proposition Q, a proposed city of Austin tax rate increase.
“People are struggling to pay their bills. They’ve got inflation and all kinds of things hitting them, and health insurance, and property taxes just keep going up and keep going up,” Aleshire said. "There’s a limit to what people can stand.”
In a statement, Travis County spokesperson Hector Nieto said the commissioners court disagrees with the allegations and they “look forward to defending our case in a court of law.”
“Responding to that tragedy and supporting the immense loss so many families experienced requires resources from all over the county," Nieto said. “The Texas Tax Code provides an avenue to assist under these circumstances. The Travis County Commissioners Court carefully considered and followed the law created by the Texas Legislature when adopting the FY 2026 tax rate.”
Saum, a plaintiff in the lawsuit, said recent changes to state law will prevent the county from using disaster-related tax revenue for anything other than direct response in the future.
House Bill 30, authored by Republican state Sen. Paul Bettencourt, puts restrictions on how local governments can use tax dollars collected for disaster response. It goes into effect Jan. 1.
“The legislature is closing what Travis County views as a loophole,” Saum said. “So it kind of has the appearance that you’re sneaking it in at the midnight hour before this goes away.”
The lawsuit asks the court to restrict the county from spending disaster-related tax dollars on projects unrelated to the July 5 flood. It’s unclear how residents’ property taxes would be affected if a judge rules in the plaintiffs' favor. Property tax bills have already been sent out to Travis County residents with the disaster-related tax increase.
