Three Austinites are suing the City of Austin, Travis County, the Austin Independent School District and Central Health for allowing tax breaks on what the plaintiffs refer to as “allegedly” historic properties.
The plaintiffs are Dominic Chavez, Mike Levy and and Ed Wendler Jr. The three men claim that giving a tax break without proving a need is against the Texas tax code. And, they say, the policy unfairly benefits the wealthy—diverting $4 million of local tax revenue.
They also claim that the City of Austin’s method for historic designation is arbitrary and does little to actually ensure historic preservation:
The City of Austin apparently grants these exemptions based solely on the owner’s claim that the exemption is needed and with no research or effort to verify that is really the case. Imagine if all tax breaks or other governmental benefits could be obtained in such a fashion. The ultimate effect is a combination of reduced revenues for the Defendants or higher taxes for ordinary homeowners—both equally unacceptable outcomes.
The petition goes on to say the historic tax exemptions to those "who don’t need them are particularly abhorrent given the facts that Central Health is seeking a substantial tax rate increase and AISD had to dip into its reserve fund last year in part to pay for these tax breaks."
The other taxing entities rely on the city’s designation to allow for historic tax breaks.
The plaintiffs are seeking a temporary injunction to stop the tax breaks.
In June, the AISD School Board decided to continue the district's historic tax abatement program. It was suspended for a year in 2010, partly because of concerns over the growing number of property owners receiving tax subsidies.
And in July, Travis County Commissioners voted to add a cap on historic tax exemptions. The policy now matches the City of Austin’s cap of $2,500 a year.