A Travis County judge on Monday set a trial date to hear arguments in a pending bond validation lawsuit centered on proposed funding for Project Connect, putting the future of Austin's $7.1 billion public transit investment in jeopardy. It became a stage where there was a possibility of a crisis.
Bond verification lawsuits aim to confirm the validity of municipal bonds issued by government agencies. The case is the culmination of a lawsuit filed in February by attorneys representing the city's light rail planning agency, the Austin Transit Partnership.
The trial is scheduled for May 28-30, according to a memo sent to Austin Transit Partnership officials Monday.
In an 11-page petition filed Friday afternoon, Texas Attorney General Ken Paxton cited the pending lawsuit and said that neither the city nor the Austin Transit Partnership are willing to accept plans for the proposed light rail system, including its flagship light rail system. They argued that bonds could not be issued to construct improvements that had been made. Republican attorneys general asked the judge to deny the city's request to affirm the bond.
Voters approved Project Connect in 2020 by more than 15 percentage points, increasing the ad valorem property tax rate by 8.75 cents and increasing the city's property tax rate by more than 20%. The new tax will go toward transforming the city's transportation map with a new light rail system, more frequent bus routes, and other improvements.
The most costly element of this investment is the light rail system. Funding plans released last summer estimated the initial system would cost between $4.5 billion and $5.1 billion. The current plan relies on new property taxes and a match of at least 50 percent in grants from the Federal Transit Administration.
The light rail plan has undergone many changes since 2020. Last summer, Austin City Council and transportation officials approved a scaled-down version of the original construction work. It's a 15.8-mile line that stretches north, south, and east of downtown Austin, with stops along the way. It could intersect with Capital Metro's commuter rail between Leander and downtown Austin near Austin-Bergstrom International Airport and Crestview Station.
Austin Transit Partnership Executive for Business and Legal Affairs Casey Black said in a memo to board members Monday that the Light Rail Planning Authority is “confident in our position” and that the Judiciary He characterized the Commissioner's motion as an “attempt to take away” public transportation rights. City of Government Agencies and Due Process.
City spokeswoman Shelley Parks said in a statement that the city disagrees with “the AG's arguments” and “certainly the court will give the city and ATP time to file a response.”
Supporters of Project Connect say the legal challenge by critics is an attempt to subvert the will of voters and undermine efforts to expand public transportation. Opponents say the funding model is flawed and the current light rail plan no longer reflects what voters were shown before the November 2020 vote.
The bond validation lawsuit was consolidated with a lawsuit filed by Project Connect critics last fall. Attorney Bill Alesher, a former Travis County judge and tax assessor and collector representing the plaintiffs, said in a statement Friday that the attorney general's filing is “the largest fraud ever perpetrated against Austin taxpayers.” It is the beginning of the end of the act.” ”
“If Austin’s ‘leaders’ want mass transit in Austin, they must immediately stop Project Connect, stop illegal tax increases, and provide voters with a fair and affordable plan. We should wait to see if voters approve the bond issue, which is the legal way taxpayer debt is incurred,” Alesher said in a statement.
Among the plaintiffs represented by Aleshire is Dirty Martin's Place, a long-established burger restaurant near the University of Texas campus. More than two years ago, light rail planners told property owners they might need to foreclose on their land because a new light rail line would pass through it, according to records obtained by the Statesman.
But last month, the Austin Transit Partnership announced it no longer intends to seize private land along Guadalupe Avenue between 27th and 29th Streets for the proposed line, including the land where Dirty Martin's Place stands. announced. Despite the changes, owner Mark Nemir said he intends to continue the lawsuit.
Project Connect has faced intense scrutiny from state authorities before. Last summer, state lawmakers took aim at the city's financial model with proposed bills, but those bills died during the session. State Rep. Ellen Troxclair (R-Lakeway) said in an interview with the Statesman last fall that the city's fiscal model is illegal and vowed to introduce a similar bill in the next legislative session.
A legal opinion issued by the city of Paxton at the time giving notice of portions of the proposed measure said the city had made “mistakes” and “misrepresentations to voters.” Portions of the attorney general's Friday filing echo earlier views.
Bonds are an important part of Project Connect's current financing plan. In pursuit of matching federal grants, the Austin Transit Partnership last month completed a series of required open house events as part of the federal environmental review for the 15.8-mile system. Construction of the line could extend into the 2030s.
