Plano cancels ballot vote on leaving Dallas transit agency

City of Plano, Texas

The tide may be turning for Dallas Area Rapid Transit as one of its six member cities threatening to leave the agency pulled a May election on the matter.

The Plano City Council on Monday canceled a May 2 election on withdrawing from DART and approved an interlocal agreement with the agency that will return 10% of the city's 1% sales tax contribution over six years to pay for transportation-related projects, according to a statement from the city.

Plano Mayor John Muns said the city achieved the "meaningful change" it sought. 

"This agreement guarantees a minimum funding return and creates a stronger framework moving forward," he said in the statement. "While it is not everything we initially proposed, it represents real progress for our community and the region."

Three other DART members have city council agenda items this week to potentially rescind their May withdrawal elections with Farmers Branch and Addison meeting later on Tuesday and Irving on Thursday.

DART uses 1% sales tax contributions from its 13 member cities to provide bus, rail and other transit services in a more than 700-square-mile area. Plano and Irving are its biggest tax contributors after Dallas. 

The main reason the six cities cited to ditch DART was inequity between their sales tax contributions and transit services they receive. Historically, the cities accounted for 32% of DART's sales tax revenue, which is expected to total $937.5 million in fiscal 2026. Any city that drops out of DART would still be on the hook for paying off its share of outstanding debt.

Rating analysts have said the cities' exodus would subject DART to budget and credit pressures. 

The transit agency has been scrambling to address member concerns, including securing $75 million over five years from north central Texas' Regional Transportation Council earlier this month and announcing a moratorium on new long-term debt issuance in January.

DART has said it plans to issue about $2.5 billion of bonds over the next six years primarily for light-rail vehicle and bus replacement, system modernization and remaining project costs from the Silver Line commuter rail service that launched in October.

The agency had $3.86 billion of senior lien sales tax revenue bonds outstanding as of Sept. 30. It last issued bonds in 2021: $1 billion of tax-exempt and taxable debt in two deals rated Aa2 by Moody's, AA-plus by S&P Global Ratings, and AAA by KBRA — all with stable outlooks.