Local NewsTaxes & SpendingAustin Proposes 25 Percent Property Tax Rate Hike to Fund $10 Billion Public Transit Plan

Austin City Council will move forward with a massive public transit plan that asks local taxpayers to foot a $5.4 billion bill to partially fund the project.
June 11, 2020
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The Austin City Council voted 11-0 on Wednesday to move forward with the Project Connect public transportation plan and an 11-cent property tax increase referendum to fund it.

According to the Travis County Appraisal District’s latest valuation, there is nearly $174 billion of taxable property value for 2020. From last year’s tax rate to this year’s (should the 11-cent pass and be the only addition), the city will raise over $191 million more from property taxpayers.

At that rate, it would take about 28 years to pay off the local commitment of $5.4 billion — and that’s if the projected federal commitment is secured.

With public transit projects, funding to further plans and ridership to justify the need is part of the equation. 

The original projections of CapMetro’s currently-in-service commuter rail line drastically dwarf the actual ridership numbers. Original projections planned for a daily ridership of 17,000 people by 2025, but as of 2018 it was consistently at 3,000.

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A homeowner’s bill for a house priced at Austin’s median value, the newly proposed tax rate will amount to an increase of about $440 dollars compared with last year’s rate.

All connected by a downtown transit tunnel, the plan includes three light rail lines reaching Austin-Bergstrom Airport to the east, Slaughter Lane to the south, and Tech Ridge to the north; improvement of an already-established commuter line stretching up to Leander and east to Colony Park; and routes for intended expansion to Georgetown, Elgin, and San Marcos.

Over 80 percent of the project’s listed costs come just from the three light rail lines and the transit tunnel.

A CityLab report stated that the average cost of a light rail plan is $140 million per mile. Some estimates range from $200 million per mile or more.

CapMetro is counting on federal grants to cover 45 percent of the cost while local taxpayers will foot the rest. But if the economic situation continues to worsen, it is conceivable those federal funds become unavailable.

Last year, the state legislature reduced the voter-approval tax rate for cities to 3.5 percent. Despite the evolving situation over a potential disaster loophole in the tax law, the 11-cent increase surpasses the eight percent limit. Thus, it will require voter approval regardless of the outcome of the loophole debate.

In 2014, voters rejected a similar, but less expansive, light rail bond issue by a significant margin.

Mayor Steve Adler tweeted after Wednesday’s vote, “Now more than ever, Austin needs a transformative mobility plan and we finally have one – created and embraced by our entire community. This comprehensive transit system will make our city more equitable while helping us fight climate change and ease congestion.”

Councilwoman Natasha Harper-Madison added, “This was a big moment but there are many steps left in the process. Later this summer, we’ll figure out which parts of this plan to put in front of voters this November. And we still have to build in a robust strategy to prevent displacement and to maximize affordability.”

Earlier this week, Our Mobility Our Future PAC was created to oppose the light rail portion of Project Connect.

Tori Moreland, executive director of the PAC, told The Texan, “The City of Austin is acting as if federal funding for Project Connect is a ‘done deal’ and they are hiding the full cost to the public. Federal reports show the grant sources are severely backlogged with other projects nationwide.”

“I believe the ballot language must contain a contingency that requires CapMetro to secure federal funds before committing tax dollars, but the City of Austin will not do this. This will leave taxpayers on the hook for the entire bill,” she continued.

Our Mobility Our Future is supportive of the bus expansion and improvement aspect of the plan and believes that by the time the light rail project is completed, it will already be outdated. They point to things like ride-sharing and self-driving vehicles that would decrease the need for and surpass the capabilities of the railway.

Backdropped by a pandemic which drove them to close businesses and suspend commerce en masse, and the day before considering a $100 million cut to the police department’s budget, City of Austin officials approved a massive $10 billion expenditure for public transportation that will require nearly three decades to pay off.

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Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad watching and quoting Monty Python productions.

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