Third Court of Appeals Rejects Convention Center Ballot Language

Last Thursday, Aug.22, the Third Court of Appeals ruled in favor of a petition filed by Nelson Linder that challenged the proposition ballot language recently adopted by the City Council concerning the Convention Center and the Hotel Occupancy Tax.

The court ruled that the ballot language – the result of a petition sponsored by Unconventional Austin and signed by more than 30,000 residents – “inadequately describes the proposed ordinance,” which (if adopted by the voters) would 1) require voter approval of any Convention Center expansion or redesign costing more than $20 million; 2) limit any Convention Center HOT funding to 34% of revenues; 3) continue the current HOT spending of 15% on cultural arts and 15% on historic preservation; and 4) allocate the remainder (i.e., 36%) to “support and enhance Austin’s cultural tourism industry.”

The ballot language adopted by Council (during a confused and confusing Aug. 8 post-midnight discussion) is vaguer in detail, does not address the specific reallocation of HOT funding except in the limits it would place on Convention Center spending, and adds the prospect of the potential costs of referendum elections.

The court’s ruling rejects the language concerning the cost of elections, noting that such an election could occur at a regular election date (meaning the city would incur no additional election costs). Moreover, ruled the court, “The ballot language also misleads voters by omitting a chief feature of the proposed ordinance – the intention that citizens vote on the prioritization of how hotel-occupancy tax revenue should be spent.” Citing precedent, the court ruled that the Council’s adopted language therefore “‘mislead[s] the voters by omitting certain chief features that reflect its character and purpose.’”

“In sum,” wrote the court, “the ballot language ordered by the City Council affirmatively misrepresents future election costs associated with the ordinance and also omits a chief feature of the proposed ordinance—the fact that the ordinance would require the City to prioritize the spending of hotel-occupancy tax revenue on cultural arts, historic preservation, and ‘Austin’s Cultural Tourism Industry,’ to the exclusion of other uses allowable under the Tax Code.” The court issued a writ of mandamus requiring the city to adopt compliant ballot language by Aug. 28 – a deadline allowing time for court approval before Sept. 5, when ballots must be submitted for printing. The city can appeal the ruling, adopt the language proposed in the original petition, or rewrite Council’s language to eliminate mention of election costs while adding language addressing the re-allocation of HOT funding.

Notably, the court’s ruling does not address the potential legality of the proposition (aka “Prop B”), and (in a footnote) specifically notes that “the validity of the proposed ordinance is not at issue in this proceeding.” The city has contended that the proposed reallocation would violate state law limiting HOT cultural and historic preservation spending to the existing 30%, and would also violate the City Charter by attempting to appropriate spending by referendum. The ruling does not address those questions.