Texas Central, the company behind the ongoing quest to construct a 240-mile-long highspeed rail line between Houston and Dallas, is once again behind on its taxes, according to Texans Against High Speed Rail, a nonprofit group that was formed some years back to oppose the planned Shinkansen line.
Texas Central allegedly has yet to pay its 2023 taxes for properties held in 10 counties, the group has gleefully announced, a move – or lack thereof – that has resulted in the company owing more than $956,000 across the counties that may one day have the highspeed rail line running through, due by July 1. Clocking in at a property tax bill of about $224,000, Harris County is owed the largest chunk. (We’ve asked Texas Central for comment and will update if and when we hear back.) Update: 11:55 a.m. “Your questions are best directed, at this time, to Texas Central,” Amtrak spokesman Marc Magliari stated in an emailed response.
So what does this mean? Potentially not much.
While it’s never a good idea to mess around where taxes are concerned, this isn’t the first time that Texas Central has been late on paying property taxes. In fact, back in 2022, just as the Texas Supreme Court was about to rule on whether the company had the right to deploy eminent domain to obtain the land needed to construct the Houston-to-Dallas line, the company was also found to have not yet paid its taxes. In that case, the situation was eventually remedied (i.e. they paid up), as is likely to ultimately be the resolution this time around.
However, this has brought up an intriguing possible wrinkle regarding the rail line’s tax paying future, and a fun new argument against the rail line for its longtime opponents. (Grimes, Waller and other counties that don’t expect to get actual rail stops are strongholds of the anti-highspeed rail contingency in the state, as we’ve noted before.)
In more than a decade of Texas Central officials trying to get local governments invested in the project – or at least to get the rural entities in between Houston and Dallas into it enough to stop opposing it – part of the pitch has been that the highspeed rail line will generate tax revenue for the counties, with some of that revenue coming from property taxes. But now Amtrak is in the mix.
Texas Central’s Houston-to-Dallas line seemed to be dead in the water after its CEO abruptly stepped down and the board disbanded shortly after the Texas Supreme Court had ruled that the company did indeed have the right to deploy eminent domain, as we’ve previously reported.
And that was the state of things, right up until Amtrak stepped in last August, reviving the project from most dead to slightly alive, with the federal entity signing a nonbinding agreement with Texas Central to further explore the project.
As a federal entity, Amtrak doesn’t usually pay property taxes. It’s thus still unclear how this setup would work if Texas Central and Amtrak partner up, something we won’t have any clues on for at least another year while Amtrak continues its due diligence examination of the project. (We’ve asked Amtrak for comment and will update if and when we hear back.)
But Texas Central’s opponents insist that if Amtrak takes on the project it will lead to going from late property taxes to no property taxes at all. “Amtrak exploring a partnership with this zombie company, that would create even more of a financial burden, in perpetuity, because Amtrak does not pay any property taxes,” Waller County Judge and Texans Against High Speed Rail President Trey Duhon contended, according to the nonprofit’s release.
“Let us not forget what was represented to be a ‘privately financed project’ was supposed to produce millions of dollars in tax revenue for impacted counties, but if Amtrak takes this project, it actually becomes a huge loss of tax revenue.”
On top of that, Grimes County Judge Joe Fauth complained about the property tax dollars not coming in now, arguing that the money owed in Grimes County (about $218,000) would be enough to allow them to hire two 911 dispatchers. “We were promised TCR would be good neighbors and substantial taxpayers,” he stated, according to the release. “Neither is true.”
It remains to be seen whether Amtrak will ultimately sign on and get this rail line built, but one thing is clear: the highspeed rail line opponents still really would rather not.
This article appears in Jan 1 – Dec 31, 2024.
