Both sides took home a win in the ruling, and both are claiming victory.
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The fight centers around firefighter pay and collective bargaining rights.
There have been countless fights in the city over Proposition B, aka "Prop B," which voters approved in 2018.
READ MORE: Houston's Prop B: What now?
Prop B forced the city to find a way to provide equal pay between Houston firefighters and police officers, which politicians like Mayor Sylvester Turner fought hard against.
On Thursday, the Texas Supreme Court struck down Prop B, which was a blow to the Houston firefighters' union, which has been fighting to implement the changes since 2018.
Turner called the decision a "huge victory for the entire City of Houston and its financial stability."
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The mayor previously said pay parity would cost tens of millions of dollars for the city and force layoffs across city departments.
RELATED: Proposed Houston firefighter pay raises to cost $115.3M for next 3 years, Mayor Turner says
However, Thursday's decision wasn't just a win for those opposed to Prop B. The court also ruled in favor of the firefighter's union in another case about a state law that handles firefighter pay.
The law, which the Supreme Court ruled is constitutional, says firefighters have to be paid substantially equal to similar jobs in the private sector, and that the two sides should use collective bargaining to reach a deal.
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The city previously challenged that law in court and lost.
Firefighters have been without a contract with the city of Houston since 2017 and say the city has been unfairly paying them since.
The ruling means the city and firefighters will head back to negotiations over that contract.
The Houston Professional Fire Fighters Association will hold a press conference about the ruling at 1 p.m. on Thursday.
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