Texas AG backs Dirty Martin's lawsuit over Austin's Project Connect light rail plan
AUSTIN, Texas — Texas Attorney General Ken Paxton is once again voicing his opposition to Austin's Project Connect, the city's proposed light rail plan.
He recently filed an 11-page petition supporting Dirty Martin's and other plaintiffs who are suing over the project. The burger joint Dirty Martin's is at risk of being torn down if the city's Project Connect light rail plan goes through.
It's one of several plaintiffs suing the city, alleging the proposal Austinites voted for in 2020 is too different from the current deal. And Paxton believes the plan is unconstitutional given the state's tax code - a challenge to the city's recent bond validation lawsuit.
"I call Project Connect the biggest con job ever perpetrated on voters and taxpayers to the city of Austin." Attorney Bill Aleshire said.
Aleshire is a former tax collector and Travis County Judge. He now represents Dirty Martin's and several other plaintiffs who are suing the city over its light rail plan, Project Connect.
"As long as that money is needed for operation or maintenance of the light rail system, that tax will be around," Aleshire said. "That's not constitutional, it's tax in perpetuity. And that's illegal."
In November 2020, Austin voters approved a $7.1 billion ballot proposition for the project to be funded through an increase in property taxes.
At the time, the proposal included 20 miles of light rail that went from downtown, all the way to Austin Bergstrom International Airport. Today the project is now only 10 miles, with no route to the airport.
"It's a bait and switch," Aleshire said. "In any other kind of contract any of us are used to, we wouldn't put up with that."
Aleshire says besides not being what was agreed to, he alleges the city is also collecting those taxes illegally; a claim Texas Attorney Ken Paxton agrees with. Last week he issued a petition calling the project unconstitutional after the city filed what's called a bond validation lawsuit in February, looking for a new way for the project to move forward with a new funding agreement.
"And I thought it was a devastating rebuke of the ATP bonds," Aleshire said. "They made some of the same claims we did but even more claims of illegality."
The AG's petition says the city tried to create a contract with voters not authorized by the tax code. It also alleges the ballot language was misleading, and "not compatible" with the existing funding agreement. Most importantly Paxton's petition says the city cannot create bonds in this way, which he alleges threatens the credit and security of Texas bond investments.
"It's still gonna be the reputation of the city of Austin at stake here and those are risky, illegal bonds," Aleshire said.
In a statement to CBS Austin, the city responded to the AG's petition by saying quote, “We disagree with the AG’s assertions and are certain the court will allow the City and ATP time to file responses.”
The city's lawsuit has been combined with Dirty Martin's original lawsuit and will go before a judge in late May. Aleshire says they're asking for the city to remove the Project Connect taxes from the city's property tax roll, which could mean issuing a refund or credit to residents who have paid in already.
"Later on, maybe rail would work. But it's the illegality and fiscal irresponsibility of Project Connect that is its problems, not the fact that it's mass transit." Aleshire said.
CBS Austin also reached out to the Austin Transit Partnership, which was created to roll out Project Connect. They weren't available for an interview but did send over a memo to the Board of Directors in which the Executive Vice President of Legal Affairs says the AG's claims would derive the city of its due process. He says A.T.P. is "confident in our position, and we are looking forward to a judge hearing our arguments."