Project Connect’s Paxton Problem

As new cost estimate and timeline are revealed, the project faces potential delays from the A.G. and a lawsuit

A rendering of a station after Project Connect is built out (courtesy of Austin Transit Partnership)

It’s become increasingly dubious since 2020 whether or not Austin’s major transit overhaul, Project Connect, will ever get built – mostly thanks to ballooning cost estimates and, more recently, a legal challenge by a group of prominent citizens, supported by Attorney General Ken Paxton. Still, last week, the Austin Transit Partnership released an updated cost estimate and timeline for Project Connect’s scaled-down first leg of rail construction. But if ATP loses an upcoming court case that goes to trial in May, it could delay the project into next year, at which point anti-Austin lawmakers could take an axe to the project in the next legislative session.

In 2022, ATP had to halve their planned 20.2 miles of light rail, subway, and new rapid bus routes to a now 9.8-mile line, with no subway and no lines to the airport, all thanks to climbing costs from design changes and inflation. This stretch of rail is now estimated to cost $7.1 billion by 2033, with construction set to start in 2027. In 2022, the estimate was $4.8 billion, but ATP stresses this most recent increase accounts for rising inflation in 2033 dollars, not an actual increase in project costs. The estimate in future dollars was a requirement for receiving at least a 50% match in grant funding from the Federal Transit Administration.

A group of prominent plaintiffs – including Travis County Commissioner Margaret Gómez, former state Sen. Gonzalo Barrientos, and burger restaurant Dirty Martin’s – filed suit against the project in November 2023, claiming that because voters did not approve the new design, the city can’t issue debt or spend property taxes to pay for the project. Paxton issued an opinion last month that said ATP can’t legally issue bonds as a nonprofit and that it can’t use “maintenance and operations” taxes – the portion of the city’s tax rate that voters agreed to increase in 2020 for Project Connect – to finance debt, like bonds.

The next legislative session may prove the biggest threat to Project Connect.

The A.G. must approve any entity that wants to issue debt in the state, but ATP has asked for a bond validation election in Travis County district court that can override the A.G.’s disapproval and expedite the legal process, which could have otherwise taken two years. Now, the trial is set for May 28-30. The judge will make a decision on both the Dirty Martin’s lawsuit and the bond validation – but the plaintiffs and Paxton have attempted to delay the process before then by requesting multiple hearings.

On April 10, the plaintiffs are requesting a hearing to compel ATP to produce specific financial details, and on April 26, there will be a hearing on whether Travis County even has the jurisdiction to approve a bond validation election. Even if the judge were to side with ATP on the latter point, Paxton would likely appeal, which would delay the trial further, perhaps even into next year. So ATP claims that jurisdiction should be considered as part of the May trial’s merit arguments. If ATP loses the May case, they’ll start their own appeals process.

Part of why Paxton seems so keen to delay the trial might be to get to the next legislative session, which may prove the biggest threat to Project Connect. Last May, Paxton released an opinion saying essentially the same thing as last month’s. Republican state Sen. Paul Bettencourt used it to bolster House Bill 3899, which would have derailed the project if passed. It was quashed with the help of certain Republican committee chairs – but they either lost or went to a run-off after the March primary election, thanks to Paxton’s well-financed opposition.

If the case is delayed until the next legislative session, it could face the organized ire of anti-Austin Republicans again. Still, ATP is confident their case will hold up in court come May 28: “In 2020, Proposition A received overwhelming support – nearly 60% – to develop a rapid transit system. ATP is confident in our standing to petition the court in a bond validation action,” Casey Burack, executive vice president of legal affairs for ATP, told the Chronicle.

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Ken Paxton, Project Connect, Austin Transit Partnership, Dirty Martin’s

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