AUSTIN (KXAN) — Texas Attorney General Ken Paxton issued an opinion Saturday morning related to Project Connect, Austin’s multi-billion dollar plan to expand public transportation. The opinion comes after an inquiry from Texas Senator Paul Bettencourt.

The opinion highlights two potential issues. One relates debt and tax structure. It points 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 raises is related to 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.

It’s not clear yet what this means for the future of the project. It’s worth noting, this is an opinion, which is an interpretation and non-binding.

This is not the only challenge to Project Connect. A Senate committee Friday moved to advance House Bill 3899. Dubbed the “No Blank Checks Act,” it would require voters to sign off on all the following components related to a project:

  • What the debt would be used for
  • How much debt product leaders need to issue
  • The tax rate needed to pay back the debt

The bill is authored by State Rep. Ellen Troxclair. The former Austin City council member is one of five representatives to co-author the bill in the Texas House, while Sen. Paul Bettencourt filed an accompanying version in the Texas Senate.

Meanwhile, the public will find out within the next week which scaled-down version of Project Connect will move forward. Project Connect leaders are expected to deliver a final design recommendation at the Austin Transit Partnership’s May 24 meeting, with an official vote and decision expected June 6.

Project Connect leaders respond to Texas AG opinion

Greg Canally, executive director of the Austin Transit Partnership, said he was glad Paxton’s opinion determined the 2020 election that approved Project Connect was conducted lawfully.

Canally said the project will continue to move forward with Paxton’s advisory opinion in mind.

“We’re going to be working with our partners at the city to advance this and keep on moving as we then also move forward on doing the financing and making sure that financing occurs within state law,” Canally said.

Austin Mayor Kirk Watson issued a statement to KXAN about the opinion. He thanked Sen. Bettencourt for asking that the opinion be expedited and the Attorney General for his recommendations.

“The advisory opinion issued by the Attorney General today upholds the will of Austin voters and reinforces that the City of Austin’s tax ratification election in 2020 was conducted in full compliance with state law. I appreciate Chairman Bettencourt seeking this expedited opinion, which includes some additional guidance on the path forward for Austin Light Rail. This coming week, the board of the Austin Transit Partnership will take the next step to move ahead with a new light rail alignment and realizing the vision of Austin voters.”

Kirk Watson, Mayor of the City of Austin