AUSTIN (KXAN) – Austin transit leaders Monday said the strength of public and legal support will keep them moving ahead with Project Connect despite funding issues brought up in a opinion released Saturday by Texas Attorney General Ken Paxton.

As KXAN reported, Attorney General Paxton’s opinion highlighted two potential issues. One related to debt and tax structure. It pointed to the city’s intention to use the maintenance and operation tax to pay down debt. The attorney general concluded that the Texas tax code “does not authorize a municipality to “earmark” use of a voter-approved increase in its maintenance and operation property tax revenue for debt service.”

Another issue the legal opinion raised was how the Austin Transit Partnership, the agency set up to implement Project Connect, is funded by the tax. The opinion found, if brought to a court, a court would likely conclude that since the tax structure is not subject to an annual appropriation, it is prohibited by Article XI, Section 5 of the Texas Constitution.

Greg Canally, executive director of Austin Transit Partnership, called the opinion “advisory” and said, “(we) will always follow state law, we always have, and we always will.”

Canally said Paxton’s opinion held three things:

  • The 2020 election where Austin voters signed off on transit plan was “legal and lawful”
  • Cities can legally create local government corporations and transfer revenue to those corporations
  • The Austin Transit Partnership “can issue bonds and notes which has always been part of our core financing package using our local revenue, plus our federal revenue”

Dottie Watkins, President and CEO of CapMetro, pointed out to KXAN that the plan received broad support from voters in 2020.

“…(We) also know that we have the support of our community, not only have we had fabulous input in this most recent round of public input, but we had nearly 60% of the voters tell us in 2020 that we want to do this thing. We want to invest our money, our property tax and doing this thing. So we know we have the community support moving forward. Now we just have to figure out the winding road to get us there. And I am confident in Austin’s ability to figure that out.”

Dottie Watkins, President and CEO, CapMetro