AUSTIN - The Texas Supreme Court recently held that a pair of taxpayers have standing to assert their claims that the Houston mayor and city council members allegedly misallocated tax revenue in fiscal year 2020 in violation of the City Charter.
James Robert Jones and Allen Watson complain that the charter requires a certain amount of tax revenue to be allocated to a fund used exclusively for drainage and street maintenance and that city officials illegally directed a portion of that money to other city services, according to the high court’s June 3 opinion.
The taxpayers claim that the officials acted ultra vires (beyond one’s legal authority) in spending the tax revenue on anything other than the drainage fund.
In response to the suit, the city filed a plea to the jurisdiction asserting governmental immunity, which the trial court denied, court records show.
A court of appeals held that the taxpayers lacked standing, dismissing the case without reaching the immunity issue.
The Supreme Court held that the taxpayers have standing to assert their claims and sufficiently pleaded ultra vires acts, reversing the court of appeals’ judgment and remanding the case for further proceedings.
“We hold that by alleging that taxpayer funds are being spent in contravention of a City Charter provision requiring that they be spent exclusively for drainage and street maintenance, Taxpayers have alleged an illegal expenditure sufficient to support taxpayer standing,” the opinion states. “We further hold that the City Officials are not entitled to dismissal of Taxpayers’ ultra vires claim on governmental immunity grounds at this time.
“Accordingly, we reverse the court of appeals’ judgment and remand the case to the trial court for further proceedings.”
Case No. 21-0358