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Austin City Council members vote to repeal 'Mistake on the Lake'

Many multi-million-dollar homeowners on Lake Austin have not been required to pay their city taxes.

AUSTIN, Texas — UPDATE: The Austin City Council has approved the repeal of Lake Austin property tax exemptions.

The council on June 20 also approved a resolution calling on City staff to examine dedicating new tax revenue from hundreds of properties.

The tax revenue accumulated from those properties will be dedicated to issues related to homelessness and early childhood education. 

City staff estimated that the exempted properties would have generated approximately $3 million in property tax revenue in 2018.

The council vote directing the city manager to look into how the new tax revenue will be spent was 10-1 with Council Member Jimmy Flannigan against.

BACKGROUND: Local elected officials on June 10 laid out plans on ending what they've called a tax haven in West Austin.

Austin City Council members have worked on a resolution to fix this "Mistake on the Lake," in which the owners of many multi-million-dollar houses have not been paying their city taxes.

In fact, hundreds of homes in the area have been part of full-purpose jurisdiction of the City since Austin was incorporated in 1891. In 1986, the City Council passed an ordinance reaffirming this mistake.

Council Member Gregorio Casar, Council Member Jimmy Flannigan, representatives of Early Matters Greater Austin and representatives of Ending Community Homelessness Coalition (ECHO) were available Monday to answer questions regarding the plan to place these homes on the tax rolls, and how doing so they said will end decades of unfair subsidy to create opportunities to fund the necessary services for young people and for those experiencing homelessness.

Along with Casar and Flannigan, the co-sponsors of the items are Mayor Pro Tem Delia Garza and councilmembers Harper Madison and Kathy Tovo.

City leaders will vote on the issue on June 20.

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