Council Adds Hundreds Of Lakeside Properties To City Of Austin Tax Rolls

Jun 20, 2019

The Austin City Council voted unanimously Thursday to add 400 properties along Lake Austin onto the city’s tax rolls.

More than 100 years ago, the properties were exempt from paying city taxes because they didn’t receive certain city services. That exemption was codified in a 1986 city ordinance. Thursday’s vote repealed that ordinance.

Council Member Jimmy Flannigan said those property owners now have access to key services paid for by property tax dollars, including police and fire protection, emergency medical services, and access to parks and libraries. Residents also get to vote in bond elections.

Flannigan said the issue resurfaced when a lawsuit was filed against the city by property owners who realized they were paying taxes while their neighbors were not. City Council members assumed the street of houses not paying taxes must have been outliers. An investigation then revealed 400 properties weren’t paying city property taxes.

Those properties include $10,000 boat docks and $13 million mansions. In total, the market value for these properties exceeds $840 million. Based on last year’s tax rate, the City Budget Office estimated Austin lost $3 million in tax revenue in 2018 by omitting those properties from the rolls.

At Thursday's City Council meeting, affected property owners highlighted insufficient city services and slow response times for emergency services. Residents said there weren't even fire hydrants on their streets.

Deanne Breedlove said it's been an issue for at least the 26 years she’s lived there.

In 2011, she said, her family called 9-1-1, but “because of confusion between the city and the county, the appropriate ambulance was not sent out and my son was in cardiac arrest and he did not survive.”

Breedlove said it took 14 minutes for emergency services to respond. Though she didn’t blame first responders, she said, it was an issue that needed to be addressed.

Council Member Alison Alter, whose district includes most of those properties, said the council was “legally obligated” to repeal the 1986 ordinance because the Texas Constitution  says “[t]axation shall be equal and fair.”

“Many of you have raised concerns about how it can be legal for the city to tax your properties without providing certain services,” Alter said. “The unfortunate reality is that many parts of our city pay property taxes without getting as many services or services at the level that they should. And they also experience long response times for public safety issues.”

Mayor Steve Adler urged residents to push for the services they need. He said five new fire stations were added, in part, in response to slow response times.

Adler said for him, it came back to the lawsuit against the city. The plaintiffs said it wasn't fair that they pay city taxes when their neighbors did not.

The affected properties are expected to start paying the additional city property taxes in 2021.

This post has been updated.