A quiet tax revolt is rippling along Lake Austin, where dozens of waterfront property owners are trying to walk away from City Hall and take a hefty chunk of the tax base with them.
Under a new state law, those residents have filed petitions to remove their land from the City of Austin, a first wave of disannexations that will strip roughly $288.5 million in taxable value from the city’s rolls. Many of those petitions are slated for a City Council vote on Thursday.
What Changed In State Law
This push traces back to Senate Bill 1844, passed in the spring, which broadened when landowners can ask to be disannexed. The law opens the door for property owners whose land is not fully connected to city infrastructure and sits next to a navigable waterway.
OpenStates records show the bill was signed by the governor and took effect Sept. 1, 2025.
How Big The First Wave Is
After a small batch of petitions was approved in late November, roughly 150 more were lined up for City Council consideration on Dec. 11. Together, they cover more than 155 acres along Lake Austin, with each tract averaging just over 1 acre.
Those parcels represent an estimated $288.5 million in taxable value to Austin, based on Travis Central Appraisal District records, according to Community Impact. City officials say the changes will show up on 2026 property tax bills.
Why Residents Are Pushing To Leave
Property owners and their attorneys say this is less a tax dodge and more a long‑running fight over services. They argue Austin annexed their land, taxed it, and then failed to deliver full city water, wastewater, or other basic infrastructure, leaving homeowners to install and maintain costly private systems.
Residents and lawyers told lawmakers and reporters that the campaign is a direct response to those long‑standing service gaps. One petitioning landowner described spending “hundreds of thousands of dollars” on water treatment and fire‑suppression systems, according to reporting by Community Impact.
How Disannexation Will Work
City documents and intergovernmental notes lay out how SB 1844 is being put into practice. When a petition meets the legal requirements, the city generally has a 60‑day window to act. The law also bars landowners from getting refunds for taxes or fees they paid before disannexation.
The City of Austin’s Dec. 11 meeting docket lists multiple Lake Austin disannexation items, along with staff reports and petition backup materials detailing each tract under review. Internal guidance in City IGRO memos shows how staff are processing petitions under the new law.
What It Means For Austin's Budget
Cutting roughly $288.5 million in taxable value does not translate directly into the same amount of lost revenue, but it does shrink the property‑tax base that underpins Austin’s budget. It also makes forecasting trickier for the coming fiscal year.
City budget planners will likely be watching how quickly these petitions move through the council process and whether more Lake Austin landowners follow with new filings in 2026.
Legal Implications
The petition drive runs alongside, not instead of, ongoing lawsuits over the City Council’s 2019 decision to resume taxing many Lake Austin tracts. Those landowner lawsuits are still active even as disannexation petitions advance.
Attorneys who helped draft and support SB 1844 say the law strengthens landowners’ options and can shift litigation costs when cities unsuccessfully fight valid petitions, according to the law firm involved in the legislation and public materials about the bill. Cobb & Johns and city legislative memos outline the legal stakes and how the new law changes the practical calculus for both sides.
What To Watch On Thursday
Thursday’s Dec. 11 City Council meeting is shaping up as the first big test of SB 1844 inside Austin city limits. The agenda includes the Lake Austin disannexation items, plus staff backup documents for each petition.
Residents, attorneys, and city staff will be watching closely to see whether the council signs off on the first large batch of disannexations and how that decision ripples into next year’s tax rolls. The City Council agenda and its packets list the items and supporting evidence.
