The owners of more than 200 lake properties along Lake Austin have sued the City of Austin and Austin Community College for stopping paying property taxes that they say shouldn’t be collected.
The lawsuit comes because property tax bills are due on numerous lakeside properties that were struck off the city’s tax list up until this year after being exempted for decades despite being within city limits.
Lead plaintiffs Judy and Brent Harward, as well as the owners of at least 213 other properties, sued in federal court on Saturday. They argue that they shouldn’t pay property taxes to the city because they don’t get the same level of city services as most Austin residents.
They also argue that Austin City Council’s repeal of a 1986 ordinance in December 2019 that codified their tax exemption was an illegal annexation of their property. The repeal paved the way for the city – and Austin Community College, according to the lawsuit – to collect taxes on properties that have been part of the city since the 1890s.
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The city council’s repeal came after the American statesman’s report revealed the actual tax exemption. The statesman initially found around 400 properties that led to the cancellation. In the months that followed, the newspaper found that there may be 766 properties left of Austin’s property tax roles.
Plaintiffs are calling for the city to be separated and the 1986 ordinance reinstated.
The Harwards, lead plaintiffs in the lawsuit, live in a 3,250-square-foot house on the north shore of Lake Austin, about two miles upriver from Pennybacker Bridge.
The Harwards bought the property in 1991. Brent Harward retired from high school teaching while Judy Harward began teaching at Austin Community College and caring for patients at St. David’s Hospital.
For the first three years they lived in a boat shed. In 1994 they built their dream home, according to the lawsuit. Brent Harward continued to work on worktop installation and eventually took on a teaching role. He retired in 2006. Judy Harward retired in 2011.
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They are now living on a Brent Harwards Teachers Pension, Social Security and a Teachers Insurance and Annuity Association pension.
Records from the Travis Central Appraisal District show this home, a two-story white limestone with its own private boat dock, is valued at more than $ 1.8 million. The addition of Austin city taxes adds nearly $ 7,000 to the annual tax burden, depending on the lawsuit.
Plaintiffs also include professional golfer Bob Estes and Bob Gregory, co-owners of waste disposal company Texas Disposal Systems. Plaintiffs’ attorney, Christopher Johns, did not return a message with comment.
A spokeswoman for Austin Community College said the district could not comment because officials were not served with the lawsuit on Tuesday afternoon.
In a statement emailed, city spokesman Andy Tate said the city acted properly in lifting the exemption in 2019, which “corrected a long history of unequal property taxes.”
“Current law requires tax authorities to tax property owners in a manner that is fair, fair and consistent,” Tate said. “The changes made under the 2019 ordinance correctly apply tax principles to ensure that property owners who receive similar city benefits pay taxes on those services.”
Greg Casar, a member of Austin city council who campaigned for the repeal of the lakeside properties on the city’s tax list, said the owners’ claim that they do not receive city services was false.
The vast majority of properties originally identified by the city have no access to city water, sewage, or garbage. About 50 are not receiving power from Austin Energy.
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Casar said the point contains no water in the argument as to whether they should be taxed because property taxes are not paid for these services. All properties have access to limited Austin Fire Department services, but these services are generally complemented by regional mutual assistance agreements with other fire departments.
“It is only fair that if everyone in town pays their fair share, these expensive properties should also pay their fair share,” Casar said.
However, a Statesman analysis of the 2018 data found that police response times to these properties were twice the citywide average.
It is estimated that the addition of these properties could increase the city’s tax revenue by more than $ 3 million.
These lakeside lots became part of the city of Austin in 1891 when the city legislature added several miles of the banks of the Colorado River to allow officials to preserve the banks. At the time, these areas were so far from the city center and inaccessible that city guides made concessions that they would not collect taxes as there was no realistic way to provide essential services.
In the years since then, the river has been dammed and these properties have proven to be some of the most idyllic in central Texas. They have an average estimate of $ 2.1 million.