Mystery Train

What's Next for Cap Metro After Light Rail's Narrow Defeat At the Polls?

Mystery Train
By Doug Potter

If Capital Metro is not going to build light rail, what is it going to do?

Before the Nov. 7 election, conventional wisdom had the agency "assuming the position and waiting for the Legislature" -- unless voters approved light rail. Having survived attempts in 1997 and 1999 to strip the transit authority of its full cent of sales tax, Cap Met leaders knew that if rail failed, the agency would have to give away at least a quarter of that money -- or see that and more taken away by the Lege.

After a month of wound-licking following light rail's narrow defeat at the polls, on Dec. 10 the Cap Metro board voted to rebate a quarter of its one-cent sales tax -- the amount the agency had been setting aside for rail, which adds up to more than $30 million annually -- to the communities from whence it came. Mostly, that means the City of Austin, which generates 97% of Cap Metro's annual tax revenue.

Cap Met is currently working out guidelines for the rebate, as that money has to go to projects consistent with the transit authority's purpose; in other words, it can't just be poured into city and county coffers. But the agency felt something had to be done and soon. "We have to ensure that the money gets spent well," says Cap Met board chair Lee Walker, "but we can't pretend there wasn't an election."

This giving-away-money stuff should sound familiar to old hands who remember Capital Metro's long service as the ATM of local politics: the place everyone went to get extra cash. While the agency opened its doors in 1986 with a future rail transit system on its to-do list, it wasn't until 1992 that Cap Met advanced an actual proposal. Then the agency backed off, changed the plan substantially, and launched another for-real effort in 1997. In response, the Legislature fired the entire Cap Met board and "enabled" (that is, required) light rail to be approved at the ballot box. Capital Metro spent a year reworking its light rail plan, then began formal planning as required by federal law and went to the polls November 7, where rail lost by 0.7% of the vote.

In those long intervals when rail was off-again and not on-again, Capital Metro had more money than it knew what to do with, and revenue slipped away, often funding the strangest projects. This is how Cap Met got such a bad reputation, which made it easy for local Republican legislators such as Terry Keel, R-Austin (in 1997), and Mike Krusee, R-Round Rock (in 1999), to file bills that would separate the agency from its money. But 0.7%, or 2,004 votes, hardly represents a mandate to roll back the tax for good. So Cap Met's partial rebate to local governments will probably help it avoid Armageddon in the Legislature.

Reading the Ballots

It's hard to say what a 2,000-vote loss means. After all, it did rain on Election Day. But it's unlikely that it means what many of light rail's opponents wanted it to mean: that Capital Metro itself is the problem, that the agency is irresponsible and corrupt, and that taking away its taxing authority is good government. "I don't think you can say that the rejection of rail was a rejection of Capital Metro," says Krusee. "It just means people didn't like light rail and they'd rather have roads. I think if it had been rejected overwhelmingly, it would have been a condemnation of Capital Metro's abilities, and you can't say that it did that."

This position isn't shared by Krusee's Republican colleague Terry Keel, who in 1997 filed a bill that would have forced Cap Met to go to the polls -- as it had already done when it was founded -- for voter approval to collect its sales tax. Given the voters' low regard for Capital Metro at the time, Keel's bill would have stripped the agency of its taxing authority. Despite the opposition of everyone else in the Travis County delegation, Keel's bill made it to the House floor and was only killed by a parliamentary coup de grace by state Rep. Glen Maxey, D-Austin -- with a little help from House Speaker Pete Laney.

State Rep. Mike Krusee
State Rep. Mike Krusee (Photo By Alan Pogue)

Keel's mind has not been changed since; the day after the light rail's narrow loss on Nov. 7, the former sheriff graciously called for Cap Met GM Karen Rae to pack her bags. So it's a safe bet that Keel will file another bill informed by light rail's hard-core opponents -- in particular ROAD (Reclaim Our Allocated Dollars) founder Gerald Daugherty -- mandating that a full cent is too much to devote to public transportation and that half of Cap Met's tax be diverted to the roads we really need. (This money wouldn't be nearly enough to pay for the roads already in our regional transportation plan, let alone the unplanned roads that Daugherty wants, but never mind that.) Keel's proposal would result in a final rollback of Cap Met's tax rate, and the creation of a new taxing entity -- a "road district" of some sort -- located far, far away from Capital Metro's HQ at Fifth and Pleasant Valley.

Such a bill, if filed this session, would die the same death as Keel's 1997 bill, if it were to make it even as far as the House floor. Keel's GOP colleagues Krusee and state Sen. Jeff Wentworth, R-San Antonio, haven't gotten on board. This is partly because many who take transportation issues seriously, as Krusee does, are starting to agree with Capital Metro that quality bus service -- especially the expanded bus service many voters called for in lieu of rail -- cannot be provided with only a half-cent of tax revenue. The agency spends more than that now, along with its farebox income and Federal grant revenue, on bus service. A legislative raid that knocks back Cap Met's current service isn't going to win Keel many friends or votes.

For his part, Krusee filed a bill in 1999 that would have guaranteed Cap Met a half-cent and then let the voters decide up-or-down on both rail and road proposals, with a quarter-cent attached to each. This bill died in committee without much protest from Krusee, as Capital Metro convinced lawmakers to let it go ahead with a rail referendum and then take another look at its taxing authority.

Now is the time for that second look, and Capital Metro's rebate of the quarter-cent it was setting aside for rail is "a good first step," says Krusee, in that "it shows Capital Metro listened to the results of the election. ... But it's not a permanent solution. And I think that's up to the voters. I'd say the voters, given that they turned down light rail, should be given the option to either rescind the quarter-cent entirely or spend it on something else." For the moment, Krusee, a legislator with much more influence than Keel, seems less inclined to file legislation aimed at Cap Metro's funding.

The Rebate Debate

Nor is Cap Metro precluded, in Krusee's view, from returning to the voters -- though not for at least two years -- with a revamped rail plan, and taking back its quarter cent. One of the agency's arguments for rail was the ready availability of federal matching funds, and the quarter cent is what the Feds would have matched. If that money were gone for good, Capital Metro's solid ranking from the Federal Transit Authority would be endangered -- and with the GOP holding sway in Washington, Cap Met will need all the help it can get to move rail forward.

So any "permanent solution," or even a semi-permanent one, could be a deal-killer for rail, and nobody seems to want that. Even as the Cap Met board showed that it was listening to the voters who went to the polls in November, it committed to finishing the preliminary engineering/environmental impact study (PE/EIS) now under way for the Red/Green rail starter line from Howard Lane to downtown. This move was called for and endorsed by everyone who matters, including Krusee, the Chamber of Commerce, and even the Capital Area Transportation Council, an employers' group that had argued for delaying any rail system until after the regional road plan is completed, which may not happen for 25 years.

That regional plan, prepared by the Capital Area Metropolitan Planning Organization (of which all our local legislators, including Keel and Krusee, are board members) has presumed we will have at least a 54-mile rail system. Rail was a part of CAMPO planning before there was a Capital Metro, and rail ain't going anywhere -- vote or no vote. "We have a huge problem on IH-35 and on Loop 1," says CAMPO executive director Mike Aulick, who warns that a no-rail alternative may force those two highways to grow to 12 or even 16 lanes. "We have four solutions to that problem -- rebuilding IH-35 and MoPac, building State Highway 130, and building light rail. You don't get a lot of impact from any one project; you need them all."

So a temporary rebate of some of Cap Metro's funds is the most politically palatable move. How temporary is open to question. Legally speaking, the current Cap Met board can only agree to divert funds for the current fiscal year, and future boards may feel differently about being tax farmers for other jurisdictions. But no member of the current board expressed any reservation about the rebate continuing until a future, successful rail referendum, as long as it would not harm rail's prospects.

A three-year rebate would total about $109 million, on top of the $91 million (out of the agency's reserves) that Cap Met has already pledged to the Texas Dept. of Transportation for high-occupancy vehicle (HOV) lanes and incident management systems. This would add up to the magic $200 million in revenue-sharing called for by the Chamber of Commerce as a "challenge" when it finally endorsed rail.

State Representative Terry Keel, R-Austin (top), is likely to file legislation that would dedicate half of Capital Metro's sales tax revenues to building the roads he believes we really need.  In 1997, Keel filed a bill -- killed by Glen Maxey, D-Austin (bottom) -- that would have forced Cap Metro to go to the polls to collect its sales tax.
State Representative Terry Keel, R-Austin (top), is likely to file legislation that would dedicate half of Capital Metro's sales tax revenues to building the roads he believes we really need. In 1997, Keel filed a bill -- killed by Glen Maxey, D-Austin (bottom) -- that would have forced Cap Metro to go to the polls to collect its sales tax. (Photo By John Anderson)

In the view of at least one Cap Met board member, that's more than enough sharing. "I'm concerned about what we'll be left with if we do what we want, and what Rep. Krusee wants, and what Mayor Watson wants," says former Austin mayor pro tem John Treviño. "We need to take care of our house first."

What Mayor Watson has suggested as a basic criterion for the quarter-cent rebate is that Capital Metro contribute to road (and, for that matter, pedestrian and bicycle) projects already approved by the voters, of which Austin has many. There are other projects Austin's quarter-cent could fund. For example, if Capital Metro agreed, Austin could use its Cap Met money to advance the rail project -- for example, acquiring right of way. But that would be a ballsy thing for Cap Met to do, and the board seems to be in no mood for ballsy moves. Nor does Austin, which even after passing nearly $250 million in transportation bonds since 1998 does not have access to enough funds to pay its share of the CAMPO plan costs. (This is not true of the other jurisdictions in CAMPO.)

Cap Metro's debate on the rebate focused on whether rebated funds should be earmarked for each jurisdiction within Cap Metro pro rata. While Treviño argued, at least tentatively, for setting aside the money in a single kitty for regional projects, Lago Vista's board member, Mayor Pro Tem Fred Harless, convinced his colleagues that the smaller jurisdictions -- four cities and unincorporated portions of two counties -- deserve unrestricted access to their tiny slices of the rebate, about $2.5 million between them. "It's their money," he says. "It's not a lot of money, but these people have needs, too. If these funds could pay for a stoplight in San Leanna, they should be able to use them."

But the real money in the deal is Austin's, and that seems to bother Krusee, who represents a certain suburban city to the north. "I don't want this to just be another subsidy for Austin, where they take the money and spend it on something they're going to do anyway. That wouldn't be right." Krusee is concerned that the city of Austin could take its $30 mil every year and use it to pay down debt on its groaning backlog of road bonds. This would free the city to propose new bonds to pay for parks or libraries or hockey rinks, and it's that sort of potential fund-juggling that concerns Krusee.

If Austin were to get real hungry and forget its manners, it would munch up not only its quarter-cent rebate but a chunk of Cap Met's reserves as well. Even after making its $91 million pledge, Capital Metro still has an estimated $78 million in reserves, previously stashed away for rail and now up for grabs. Or at least up for being spent, rather than sitting around in a pile. "I believe we're duty-bound to come to some sort of resolution" about how to use the reserves, says Walker. "We owe that to the taxpayers because it's their money."

While the board has not yet reached such a resolution, it does seem poised to put its foot down and call for investing the reserves in Capital Metro's own projects and needs. "We don't have to spend it [on outside projects] simply because we have it," says board member and Austin City Council Member Daryl Slusher. Like Treviño, Slusher calls for "taking care of our own house first."

That housekeeping is going to get more expensive as Capital Metro rolls out its "Five Year Plan" for expanding and improving bus service. "We do not want to lose our focus on our core mission of making our bus system the best in the country," says Walker. "And one interpretation of the [referendum] is that voters have told us to enhance the bus system, increase ridership, and get cars off the road."

The Five Year Plan was under development well before November 7, but its first version assumed that a rail system would be built. Thus, it featured realignments of current routes and frequencies, with a 2% annual growth in service leading up to rail's opening day in 2007. The current version does less realigning and more simple addition -- more buses, more often, on more routes. The agency estimates a 4-5% annual growth in service from 2001 through 2006, which is quite a bit. (See pp.30-31 for more details on the Five Year Plan.)

That increase in service -- along with a revitalized vanpool program and an effort to make Cap Met more user-friendly -- will likely soak up the remainder of the authority's tax collections and require direct investment of some of the $78 million reserves, particularly for capital investment in park-and-ride lots and transit centers. Considering that Capital Metro's de facto mission for years has been to build light rail, all these moves -- the Five Year Plan, the HOV pledge, and the quarter-cent rebate -- add up to a major commitment of funds and energies away from transit and toward "partnership in regional transportation solutions." Will the agency pursue these solutions in addition to or without light rail? As long as that question remains unanswered, rail fans and foes can reach an uneasy agreement over Cap Metro's cautious response to the defeat of light rail. Ultimately, it'll be up to you-and-me-the-voters to decide how Cap Met will occupy itself in the agency's first post-rail era. end story

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Capital Metro, Campo, light rail, Texas Legislature, Terry Keel, Mike Krusee, Lee Walker, CAMPO, sales tax rebate, City of Austin, Glen Maxey, Jeff Wentworth, Kirk Watson, John Treviño, Daryl Slusher, Texas Department of Transportation, High Occupancy Vehicle lanes

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