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Project Connect opponents ask court to block funding for transit expansion

A cross-section illustration of what a subway station could have looked like. At the ground-level, a small structure is surrounded by trees. On the level beneath that is the "back of house" infrastructure needed to keep the station running. The second level down is a concourse and the bottom level is a station platform. Escalators are shown connecting each level.
Austin Transit Partnership
A conceptual illustration of a subway station in downtown Austin. The subway promised with Project Connect was cut to reduce costs.

Opponents of Austin's voter-approved transit expansion have filed a long-expected lawsuit in state district court, accusing local officials of scamming the public by promising one plan before the election and offering a smaller one after.

The plaintiffs — including an almost-century-old hamburger restaurant, a Democratic member of the Travis County commissioners court and a former Austin city council member — are Austin property tax-payers asking the court to stop further collection of the taxes used to fund the initiative known as Project Connect.

The Project Connect tax increase was approved by voters in November 2020 to fund the single-largest expansion of public transit in the city's history. The 21% hike in the city's maintenance and operations (M&O) tax has so far generated $464 million for the Austin Transit Partnership (ATP), an agency created to build the light-rail network. This fiscal year, the tax rate is expected to raise $166 million.

In exchange for higher taxes, Project Connect would boost the city's transit offerings by adding four new high-frequency bus routes, improved commuter rail, additional park-and-rides and more of the on-demand transit known as Pickup.

But the crown jewel of Project Connect — accounting for $5.8 billion of the $7.1 billion price tag — was a proposed light-rail system. The 20-mile route would stretch outward from downtown to the north, south and east, all the way to Austin-Bergstrom International Airport. The proposed system would have 26 stations and include a $2 billion downtown subway with underground shopping and restaurants.

 An illustration showing a fictitious band performing on a riser in an underground shopping mall with a pizza by the slice restaurant and French bakery in the background.
Capital Metro
/
City of Austin
Early Project Connect plans for an Austin subway imagined an underground shopping space with dining and live music.

Almost a year-and-a-half after voters approved Project Connect in April 2022, transit planners said inflation and design changes like a longer subway tunnel had pushed the light-rail price tag over $10 billion.

Fast-forward to June 2023: ATP had welcomed a new budget-conscious leader and finalized a new plan, approved after six weeks of public outreach. The revised light-rail map, billed as phase one of Project Connect, was smaller, but less expensive: under $5 billion.

The revised map would cover half the distance: 10 miles instead of 20. It would have 15 stations instead of 26. The light-rail wouldn't reach the airport, at least not in the initial build. The downtown subway system was removed and replaced with on-street rail.

An infographic showing the new light-rail plan. The system would have 9.8 miles of train tracks with 15 stations. Estimated travel time from 38th Street to Oltorf would be 23 minutes. Estimated number of average daily riders served would be 28,500 by 2040, about a third of the original projected ridership of 81,700.
Austin Transit Partnership
An infographic explaining ATP's recommended light-rail plan: 9.8 miles of line with 15 stations serving an estimated 28,500 riders per day by 2040, about a third of the original projected ridership of 81,700.

Local officials have stressed the full 20-mile system will eventually be constructed, perhaps without the downtown subway. But ATP has offered no timeline for when that could occur or explained how it would be funded. The first phase of the light-rail system is slated to be up and running by the early 2030s.

In their lawsuit filed in Travis County District Court, plaintiffs allege Project Connect has changed so dramatically that Austin no longer has the legal authority to collect property taxes for it.

The suit also attacks the Project Connect financing mechanism, arguing M&O tax revenue can't be used to pay down debts. ATP is seeking to borrow money to pay for the large upfront costs of constructing such a massive infrastructure project. The debt would be paid down by M&O taxes collected by the city and transferred to ATP.

The argument is based on a legal opinion by the Texas Attorney General's Office. City and ATP officials indicated earlier this year that they could comply with the attorney general's opinion by making some relatively minor changes to the documents that govern the arrangement between the city and ATP — even using some language suggested in the footnotes of the attorney general's opinion.

The plaintiffs in the lawsuit are Dirty Martin’s hamburger shop, a restaurant that was slated to be demolished to make room for light-rail; Democratic Travis County Commissioner Margaret Gomez; former Austin City Council Member Ora Houston; former Democratic State Sen. Gonzalo Barrientos; and Susana Almanza, founding member and director of the environmental justice group PODER.

Dirty Martin's owner Mark Nemir poses for a portrait on April 13, 2022, at Dirty Martin's off of Guadalupe Street.
Michael Minasi
/
KUT
Mark Nemir has run Dirty Martin's for 33 years.

The defendants named in the suit are all ten Austin city council members, Mayor Kirk Watson and the six voting members of the ATP board.

The plaintiffs' attorney, Bill Aleshire, declined to comment. Aleshire, a former Travis County judge said plaintiffs will hold a news conference on the lawsuit Wednesday and answer questions then.

ATP declined to comment on the lawsuit.

Mayor Kirk Watson said the city will "review all allegations carefully and take appropriate next steps."

“The voters approved this ongoing multi-billion-dollar project that will bring much needed mobility infrastructure to the city of Austin,” Watson said in an emailed statement. "We are disappointed to see the new lawsuit challenging Project Connect."

Transit Forward — a non-profit backed by construction and engineering companies as well as local chambers of commerce and the disability rights group ADAPT — suggested the lawsuit was brought by sore losers.

"Regrettably, the same people who opposed rail in 2000 and 2014, and lost in 2020, are trying to circumvent the will of the people through a lawsuit," Transit Forward executive director Bill McCamley said in an emailed statement. "We strongly and passionately encourage the City Council, ATP, and Cap Metro to stay the course and continue to move forward with Project Connect."

The lawsuit is in the early stages. Council members and ATP board members are still in the process of being served. They'll likely have 20 days to file a response to the suit.

Nathan Bernier is the transportation reporter at KUT. He covers the big projects that are reshaping how we get around Austin, like the I-35 overhaul, the airport's rapid growth and the multibillion dollar transit expansion Project Connect. He also focuses on the daily changes that affect how we walk, bike and drive around the city. Got a tip? Email him at nbernier@kut.org. Follow him on Twitter @KUTnathan.
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