Legal wrangle threatens Austin light rail plans

The city of Austin in Texas has plans to build a 9.8-mile (15.7km) light rail system linking three suburban termini with the city centre (and further extensions are on the table). 

 

The USD 7bn cost will be met by taking out loans and issuing bonds; voters authorised a city property tax increase at a 2020 referendum.  

 

Now the Texas Attorney General and other plaintiffs are challenging the power of the Austin Transit Partnership (ATP) to borrow under state law, arguing that ATP does not meet the definition of an entity that could file the so-called bond validation law suit. If the Attorney General is successful, the project could be tied up in appeals for years, delays that would likely be fatal to the project. 

 

A trial is scheduled for 28 May. Essentially the law suit is the result of differences between the Republican controlled state of Texas and the Democrat controlled City of Austin.  

 

The City and ATP carefully crafted the finance structure for Project Connect (the light rail scheme) to circumvent the limits on local taxing authority imposed by the State, hence the challenge.