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New taxes and fees considered for rail system funding

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Funding for Austin’s proposed urban rail system ran off the tracks earlier this year when forecasts showed it could not pay for itself after 18 years, but new fees and special tax districts are just a couple avenues that transit planners are exploring to get things moving again.

Regional planners returned to the table Friday to look for new ways to fund what's known as Project Connect 2035. The transportation plan includes highway improvements, expanded commuter rail, as well as the creation of urban and regional rail.

Austin Mayor Lee Leffingwell says money from the recently-approved toll lane on MoPac could also help.

"After the loan is paid off, you've still got the revenue stream there,” Mayor Leffingwell said. “That can be dedicated to other mass transit projects."

The mayor said he would like to see that money spent on creating similar toll lanes on I-35.

But the major arms of Project Connect 2035 are rail. One project, Lone Star Rail, would stretch from San Marcos to Georgetown.

Capital Metro Strategic Planner Todd Hemingson says his agency and Lone Star are still refining their long-range financial plans.

"Those really need to be more gelled before they can feed into the comprehensive plan," he said.

One funding idea being discussed is tax increment financing, or TIF. Essentially, different districts would be created and within those districts, any property value increases would be set aside into a specific fund.

That money would go toward paying off improvements made to that area.

"When rail or other forms of high capacity transit come in, they create value,” Hemington said. “The TIF is, I think, a very logical mechanism to capture some of that value to help support the transit service."

Other options include increased vehicle registration fees, a vehicle emissions tax, and fees for curb-side parking.

Originally, planners had hoped to fund operation and maintenance of urban rail through the sales tax alone, but that was not sustainable long-term. They hope to have a clearer financial picture by January.

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