Can Trump save light rail in Austin?

Screen Shot 2020-04-07 at 2.21.35 PM
A Project Connect rendering. 

Project Connect is in serious danger. The coronavirus has jeopardized every resource needed to build the two light rail lines and many other transit improvements the project envisions. Notably:

Attention. It’s all devoted to the virus, both at City Hall and among the public. Many of the leaders, activists and donors who are key to a successful transit referendum this fall aren’t thinking in the long-term right now.

Money: Sales tax revenue, which makes up the great majority of Cap Metro’s funding, has plummeted. The federal stimulus bill approved last week provided $25 billion to shore up transit agencies, off which Cap Metro is getting $104 million. According to Cap Metro CEO Randy Clarke, that money is simply to help the agency keep services afloat through the end of the year. We’ll see whether that is enough, but there is certainly the prospect that the severe damage to sales tax revenues will continue into next year and put current services at risk.

People are also going to have much less money. The idea of paying for Project Connect entirely with a tax rate election (rather than general obligation bonds) was politically dubious a month ago. Now asking for property owners, a significant percentage of whom are likely facing foreclosure due to lost jobs/income, to approve even a small tax increase (1¢ or 2¢) may be tough. Especially since the drop in property values may prompt the city, county and school district to ask voters to approve other tax increases just to keep basic services afloat.

The federal government may be our only hope
Project Connect has always been premised on major federal support. The general assumption is that the Federal Transit Administration would pay for 40% of the cost of the rail system. However, in order to qualify for those funds, we’d have to prove we have the ability to not just cover the rest of the capital costs but that we have a permanent revenue stream to support operating costs. Unfortunately, we can’t use GO bonds to pay for operating costs. Hence the tax rate election idea.

If we were to assume that nothing changes in terms of federal support, my recommended approach would be to ask for as small of an immediate tax increase as possible and then to fund whatever you can with GO bonds. Yes, those eventually lead to tax increases too, but not until the city begins selling the bonds and spending money, much of which is years away. It’s essentially the city’s version of deficit-spending.

But perhaps amidst the greatest economic crisis since the Great Depression, the rules will change. Trump has floated the idea of a giant infrastructure bill to further stimulate the economy. The good news is that Congressional Democrats already have a $760 billion infrastructure plan that they introduced in January. It includes $105 billion for local transit agencies.

With that kind of increased funding available for transit, are the feds still going to ask local governments to raise taxes to qualify for it? That’s not very stimulus-y.

In fact, now Trump and Democrats are talking about something even bigger –- maybe $2 trillion. Mitch McConnell isn’t happy about it and Congressional Republicans are sounding the alarms about Democrats using this as an opportunity to accomplish long-term environmental objectives, but as the economic crisis continues, the pressure on them to pump more money into the economy will only increase. Nancy Pelosi knows this.

Trump, of course, couldn’t care less about investing in transit. He couldn’t care less about any of the details of the stimulus package. But that’s the good news. It means he’ll sign anything as long as there’s a big number attached to it.

Austin as we know it wouldn’t exist if not for the largesse of the federal government during the Great Depression. Local leaders, notably former Mayor Tom Miller and a young congressman by the name of Lyndon Johnson, maneuvered to get New Deal funds to realize the decades-long goal of building dams to control the seasonal floods that had been such a big constraint on the city’s growth. The Mansfield and Tom Miller Dams put Austin on an entirely new trajectory, allowing it to grow into the major city it is today. They also created thousands of jobs.

Perhaps 80 years from now we will say something similar about the Great Coronavirus Crisis of 2020. How local leaders seized the opportunity to transform Austin’s dangerous, congested, sprawling infrastructure into the safest, greenest and most equitable transportation system in the Sunbelt.

(We have the New Deal to thank for many of our most treasured local public assets. Here’s a list.)

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One thought on “Can Trump save light rail in Austin?

  1. “Austin as we know it wouldn’t exist if not for the largesse of the federal government during the Great Depression. Local leaders, notably former Mayor Tom Miller and a young congressman by the name of Lyndon Johnson, maneuvered to get New Deal funds to realize the decades-long goal of building dams to control the seasonal floods that had been such a big constraint on the city’s growth. The Mansfield and Tom Miller Dams put Austin on an entirely new trajectory, allowing it to grow into the major city it is today.”

    There does not appear to be a significant difference in the city’s population growth rate before and after those dams.

    1930
    53,120
    52.3%

    1940
    87,930
    65.5%

    1950
    132,459
    50.6%

    1960
    186,545
    40.8%

    https://en.wikipedia.org/wiki/Austin%2C_Texas

    In fact, Austin’s highest growth decade in the 20th century was the 30s right before the dams (’40 and ’41).

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