Just days after an appeals court ruled in favor of Houston’s implementation of its drainage fee, a new lawsuit was filed Oct. 21 in Harris County District Court alleges mishandling of how it allocates property taxes to fund drainage projects.
The suit, which joins a string of legal challenges to the city’s drainage fund, was filed by three plaintiffs including Allen Watson, an engineer who helped advocate for the fund’s original implementation as part of the ReNew Houston effort in 2010.
At the heart of the legal argument is the city’s calculation of how it allocates property taxes to the fund, which also receives dollars from developer impact fees and other sources.
“According to the 2020 budget, the City is short-changing the Dedicated Drainage and Street Renewal Fund by nearly half,” Watson said in a statement. “We are confident the court will uphold the will of the people and direct the City not to engage in budget shenanigans like this in the future.”
The city argues, however, that the ordinance creating the fund calls for "an amount equivalent to proceeds from $0.118 of the City's ad valorem tax levy minus an amount equal to debt service." The phrase "equivalent to" is being interpreted by the city as a proportion of the overall tax rate rather than an exact amount.
When it passed in 2010, 11.8 cents was equivalent to 18.5% of the overall rate at the time; today 11.8 cents comprises closer to 21%, according to a statement from Mayor Sylvester Turner’s office.
“Transferring the 11.8 cent full amount would mean a reduction to the General Fund budget of $50M in this fiscal year alone,” the mayor's statement read. “That would mean cuts to essential services like police, fire, solid waste, and other services.”