Date Filed: March 23, 2026
Original Court: Travis County District Court
Case Status: Pending
Under Article XI, Section 5 of the Texas Constitution, home rule cities can impose taxes as long as those taxes are authorized by law or by their city charters. The Texas Tax Code requires that local taxes be approved by voters through an election. However, local governments can impose regulatory fees without voter approval so long as there is a connection to regulation.
The Transportation User Fee (“TUF”) is a fee listed on the utility bills for those who receive their utilities from the City of Austin. The fee’s purpose is to fund the maintenance, repair, and construction of roadways, sidewalks, and other infrastructure. Because the fee is placed on utility bills, if one refuses to pay, the utilities can be shut off to enforce collection.
Austin’s TUF does not appear to be a regulatory fee, but instead a tax that is hidden under the label of a “fee.” The TUF has no connection to a regulatory activity, and it applies to the general population rather than a portion of the population subject to a regulated activity. The TUF cost Austin ratepayers $126 million in fiscal year 2024. Rather than seek voter approval, the City unilaterally imposed this nine-figure revenue source by calling it a fee instead of a tax.
TPPF sued the City of Austin to stop the city from collecting this illegal tax. Should the City wish to raise revenue for its infrastructure, it needs to hold an election. Taxpayers should have the final say in whether, and how much of, their money can be used for this purpose. This lawsuit will prevent the City of Austin and local governments across Texas from avoiding voter accountability through new taxes that are improperly labeled as fees.
Case Documents: