City wins another round in revenue caps lawsuit

In the ongoing battle over revenue cap referenda, the city scored a victory in the courts yesterday.

Anti-tax activist Bruce Hotze lost a legal battle with the city on Thursday, but said he will continue to fight for a cap on all city revenues.

The cap was Proposition 2, which voters passed in 2004. The city has not enforced it, because voters also passed another cap mechanism by a wider margin. That cap, Proposition 1, is not as restrictive.

"I'm mad as a hornet that the appellate court has sent this back to the lower court on a technicality," said Hotze, a local businessman and limited-government activist. "We're going to take this all the way to the Supreme Court if we have to."

The "technicality" is Hotze's right to sue, known as "standing." The 14th Court of Appeals ruled Thursday that Hotze and his group had no standing to bring the suit, and sent it back to district court to give him one more chance to claim standing on different grounds.

"We are gratified to have prevailed in the Court of Appeals," Mayor Bill White said in a statement. "We respect those who have fought for tax limits for years," he added.

The judgment affirmed the city's decision to use Proposition 1 instead of Proposition 2, even though both were approved by voters, said Scott Atlas, the city's outside counsel.

The standing issue is crucial, Atlas said.

"If you give every taxpayer the right to challenge decisions like this that the government makes, you'll be tied up in courts forever."

[...]

Hotze's attorney, Andy Taylor, pointed out that the First Court of Appeals did give Hotze standing on a related lawsuit that forced the mayor to certify the vote on Proposition 2.

"Somebody's got to have the right to challenge the government," Taylor said. "He's been the pioneer taking the arrows from the beginning, and who would have standing if Bruce Hotze doesn't have standing?"

The court's opinion is here. This gets a little confusing because there's more than one lawsuit relating to the revenue caps. As noted in the Houston Politics blog, this decision reversed an earlier district court ruling that said both revenue cap proposals from 2004 must be enforced. Both measures passed, but the city's preferred Prop 1 had more votes, so it was considered to have precedence over Prop 2. See here, here, here, and here for more background than you probably care about on this. In 2006, there was another referendum (Proposition G) that excluded the city's enterprise funds, such as airports and convention facilities, from Proposition 2. That passed, there was another lawsuit filed by Hotze, and it too was tossed on grounds of standing. Which, lest I've missed something, means that unless Hotze can clear that hurdle in the lower court, this is the end of the line for this particular fight. The wheels do grind slowly sometimes, don't they?

Posted by Charles Kuffner on April 04, 2008 to Local politics