Austin's transportation user fee (TUF) is the target of a lawsuit, with plaintiffs asking a court to permanently halt what they contend is an illegal tax.
The Texas city's fee,
"When a city wants to impose new taxes, it needs to hold an election so taxpayers have a say before more of their money goes to the government," TPPF attorney Heidi Walusimbi said in a statement. "Disguising new taxes as fees not only violates Texas law, it gives the city carte blanche to fill its coffers, while silencing the very people who fund it."
The lawsuit claims the TUF is not a permissible regulatory fee, but a tax that requires voter approval under Texas law.
"Furthermore, the formula relied upon to calculate the TUF is not equal or uniform and does not consider the valuation of real or personal property in violation of the Texas Constitution," according to the lawsuit.
The TUF generated $139.2 million in fiscal 2025 for Austin's transportation fund. For fiscal 2026, the fee increased by an average of 11% and is
Austin did not immediately provide a response to the lawsuit, which comes as the city is gearing up to launch its budget process for the fiscal year that begins Oct. 1.
In a post on Monday, Mayor Kirk Watson called for greater transparency by presenting projections based on a no-new-revenue maintenance and operations property tax rate instead of incorporating an up to 3.5% revenue increase allowed under Texas law.
The move recognizes current economic conditions facing residents, he said.
"Starting with a no-new-revenue forecast will also help reveal what city services and programs are at risk of cuts," Watson's post said.
The city was forced to trim its
