Houston Could Face Sharp Financial Downfall After Texas Supreme Court Reverses ‘Rain Tax’ Decision

HOUSTON, Texas – The Texas Supreme Court has sent the lawsuit surrounding Houston’s infamous “Rain Tax” back to district court. The move by the State’s highest civil court reverses a Court of Appeals decision. How the decision would impact the City’s collection of the drainage fees will be determined after the lower court takes another look at the case.

The lawsuit claims that ballot language on the 2010 Houston Proposition 1 issue did not make it clear that the issue would cause a fee to be levied on property owners in the City of Houston, according to a KPRC report. Houston attorney Joe Slovacek, representing the plaintiffs in the lawsuit, told the television station that it was a “good day for property owners of Houston.”

The Court issued an 8-0 unanimous opinion, which is attached below. The opinion was delivered by Justice John Devine. Justices Eva Guzman and Don Willett filed a concurring opinion. Justice Jeff Brown did not participate in the decision.

During the case before the Supreme Court, attorneys representing the property owners argued that the ballot should have mentioned the drainage charges required by the amendment. They maintained that by ignoring the charges, the ballot obscured the amendment’s “chief features” and its “character and purpose,” according to Court documents.

The City of Houston argued that appellate courts had only twice sided against the governing authority over disputed ballot language. It further argued that cities have broad discretion in how ballot language can be worded.

The Court disagreed:

The City did not adequately describe the chief features – the character and purpose – of the charter amendment on the ballot. By omitting the drainage charges, it failed to substantially submit the measure with such definiteness and certainty that voters would not be misled. Accordingly, summary judgment should not have been granted in the City’s favor. We reverse the judgment of the court of appeals, and, because only the City moved for summary judgment, remand to the trial court for further proceedings consistent with this opinion.

The following video ad from Stop Prop 1 shows some of the misleading components of the proposed program faced by voters:

Houston Mayor Anise Parker is standing strong behind her project, which has cost Houston residents an estimated $400 million in what may now be illegally-collected fees.

“This is but one step in the ongoing legal process,” Mayor Parker said in a written statement. “It does not change the city’s ability to continue with the program that has resulted in millions of dollars of drainage and street improvements throughout Houston since its implementation. Of course, we, respectfully, disagree with the court’s decision and are reviewing our options, including filing a motion for rehearing. If we do not file for rehearing, the case will simply be remanded to the trial court, where the city will continue its vigorous defense.”

Texas Senator Paul Bettencourt was one of the chief opponents to Prop 1 during the 2010 City Election. He helped organize the group of property owners who engaged in the lawsuit against the City of Houston. “This ruling is not only a big victory for City of Houston Taxpayers to stop the drainage tax eventually, but a warning to all governments in Texas to tell the public the truth when using proposition ballot language presented in the voting booth public for voter approval,” Sen. Bettencourt told Breitbart Texas in a written response to an inquiry.

“Even after today’s Supreme Court ruling that said the public was misled, Mayor Parker continues to not recognize the obvious by saying this is just another legal step in the process,” Bettencourt continued. “Unfortunately she has a long history of telling homeowners this drainage fee would cost homeowners only $5 a month during the 2010 election, and that has been proven wrong repeatedly.”

“With a mayor’s race underway,” the Senator concluded, “it will now fall onto Council Member Stephen Costello and others that supported this tax how they would implement the Court’s ruling or follow the Parker Administration in trying to kick the can down the road. I don’t see how that can possibly serve the public at all with such a strong ruling from the Texas Supreme Court.”

Houston City Council Member Stephen Costello was one of the primary architects of the drainage fee, or rain tax, proposition during the 2010 election.

One of Costello’s mayoral opponents, Bill King, said Houston could face uncertainty over how to fund drainage programs should the lower court throw out the 2010 election. “As a result of today’s ruling,” King said in a statement obtained by Breitbart Texas, “the City faces tremendous uncertainty over the half-baked RainTax plan as to how future infrastructure projects will be funded, including how to even fund next year’s budget, and millions in potential legal fees and claims.”

“The City finds itself in this quagmire because the RainTax [supporters], including Council Member Stephen Costello, who describes himself as the plan’s architect, refused to be level with the voters and say how much their proposal would cost Houstonians,” King concluded.

Houston City Council Member Michael Kubosh in an email to Senator Bettencourt that the City of Houston has spent $32 million out of the dedicated drainage fund for salaries. Mayor Parker and Costello had both promised the council that the monies were in a lockbox to only be used for drainage projects. Kubosh was not on City Council at the time of the election, but opposed the initiative at the time because of what he believed was deceptive language on the ballot.

The issue now goes back to the district court in Harris County that initially issued the summary judgement in favor of the city. KPRC speculated that the judge could choose to avoid a retrial by issuing a summary judgement against the city based upon the Supreme Court’s ruling.

Bob Price is a senior political news contributor for Breitbart Texas and a member of the original Breitbart Texas team. Follow him on Twitter @BobPriceBBTX.

SCOTX Decision on Rain Tax


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