The Austin school district can move forward with $490 million in bond-funded projects — stalled while the district dealt with a pending lawsuit — after a judge ruled in the district’s favor Monday.
It could still be weeks before the work begins, however. The school board first needs to appoint an oversight committee that will create a schedule for the projects funded with the bonds.
Voters approved two bond propositions in May, but the district has not yet started the work because members of the Travis County Taxpayer’s Union sued, claiming the district failed to specify on the ballot how the propositions would affect the tax rate.
In response to Monday’s ruling, the district issued a statement saying that “the ruling will permit AISD to carry out the will of Austin voters” and move forward with construction plans.
In the weeks leading up to the election, the school district made it clear the bonds were for $892 million, and predicted all four bonds would bring a 3.5-cent bump in the district’s tax rate.
The taxpayer group argued that needed to be made clear on the ballot, as well.
As 353rd District Court Judge Tim Sulak said early in the hearing, the lawsuit centered on a few “magic words” laid out in the state’s election code. Sulak ruled that whether the district actually said those words on the ballot or not, it communicated essentially the same thing. By not specifying the effect on the tax rate, the district had essentially said the rate would be unlimited, he said.
Attorneys for the school district argued that if the case was appealed, it could cost the district more than $33 million in construction fees and interest over the next year. Sulak ruled the members of the taxpayer group who had sued would have to post a $15 million bond, likely stopping the case from proceeding, as representatives with the group said they don’t have to money to challenge the ruling.
Stephen Casey, the group’s attorney, derided Sulak’s ruling as setting a precedent “detrimental to the taxpayers.” Casey argued that setting such a high security amount will discourage taxpayers from challenging governmental entities like the school district in the future — a concern Sulak also voiced before setting the security at about half of what the district had requested.
“How many taxpayers have $15 million in their pockets?” Casey said. “You can’t fight Goliath with one rock, now you need 15 million.”
Much of the back-and-forth between the taxpayer group and district’s attorneys during the hearing centered on the legal definition of “proposition” — and whether state law requires the entire proposition be listed on the ballot.
Both sides cited multiple previous cases, all of which “brushed up against” the issue at hand without tackling it directly, Sulak said.