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Churches file lawsuit against Texas city over allegedly excessive water fees

Churches file lawsuit against Texas city over allegedly excessive water fees

Unsplash/Sasikan Ulevik | Unsplash/Sasikan Ulevik

Three churches have filed a lawsuit against a city in Texas, accusing the local government of charging them water fees that are higher than that for commercial businesses.

Magnolia Bible Church, Magnolia’s First Baptist Church and Believers Fellowship filed the petition against the city of Magnolia last week in the District Court of Montgomery County.

According to the suit, Magnolia took “unprecedented action to recoup property tax revenue from churches” when in March 2018 they adopted an ordinance for tax-exempt entities that increased the fees for water usage by changing their status from “commercial” to “institutional.”

Mike Berry, chief of staff for First Liberty Institute, which is representing the churches, said in a statement that “Texas law clearly exempts religious and non-profit organizations from taxation.”

“Magnolia’s water fee scheme hinders these churches from providing many vital services to the community because of the government’s unquenchable thirst for taxpayer money,” stated Berry.

“These churches offer a multitude of services to their communities, and over-charging their water limits the services they can provide the community.”

According to the lawsuit, the city’s decision came as a way to help close a financial gap between the rising cost for providing water to a growing population and revenues that were not increasing fast enough.

“This new ‘Institutional Water Rate’ marked a dramatic shift in the status quo. Under the City’s old water rate, ‘institutional’ users such as churches paid the same rate as commercial users. But under the new rate, the City now forces them to pay a significantly higher rate than that of their commercial counterparts,” the lawsuit states.

“To be more specific, the ‘institutional’ users bear water rates up to nearly 75% greater than commercial users. For instance, a church that uses 5,000 gallons of water bears a water rate of $52.50, whereas a similarly situated commercial user would pay only $30 for that same amount of water—less than two-thirds of the cost borne by the church.”

Texas Pastors Council sent a letter of protest to Magnolia city leaders in June of last year but their letter was ignored, the lawsuit says.

Last December, a counsel for the churches sent a letter to city leadership asking them to reconsider the new water fee rate. However, the fee remained.

“In sum, Magnolia citizens pleaded with the City to change its course. It did not. And because the City appears bent on levying disproportionate, backdoor taxes on tax-exempt religious organizations, the Churches are now left with no choice but to file this lawsuit to force the City to comply with the law,” the lawsuit states.  

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