Texas Attorney General Ken Paxton has asked a Travis County district court to dismiss a lawsuit filed by the City of McKinney that seeks to validate $30 million in airport bonds.
In a May 15, 2026, filing, the Office of the Attorney General (OAG) argued that the city and its development corporation lack proper standing to bring the action and that the proposed refinancing would significantly extend taxpayer debt.
The legal dispute centers on a Texas statute known as the Expedited Declaratory Judgment Act (EDJA), found under Chapter 1205 of the Texas Government Code. The law allows some bond issuers to avoid the typical bond approval process through the Office of the Attorney General’s Public Finance Division, and, instead, seek approval from a judge.
If a court rules in favor of the municipality, any future legal challenges to the bonds become completely moot. Critics, including the North Texas Conservation Association (NTCA), have characterized the expedited procedure as a “trial by ambush” because it requires only a public notice in a newspaper and allows for a trial to occur on less than 20 days’ notice.
McKinney and the McKinney Community Development Corporation (MCDC) originally filed the validation suit on April 24, 2026, in Travis County. Under the EDJA, the OAG is automatically made a party to the case and is required to review whether the proposed bonds comply with state law. While McKinney officials argued that the 2026 refunding bonds would save millions of dollars over the lifespan of the debt, the OAG’s financial analysis disputed that claim.
In its plea to the jurisdiction, the OAG stated that it remains unclear how the refunding could accomplish net savings when the existing 2025 bonds mature in 2032, while the proposed 2026 refunding bonds would not mature until 2056. The OAG asserted that this structure would extend the active indebtedness by 24 years, creating a net present value savings of roughly $1 million against an aggregate gross loss of approximately $9 million.
Additionally, the OAG argued that only direct bond issuers can legally invoke the EDJA. According to the state’s filing, the City of McKinney is not the entity issuing the 2026 bonds, and economic development corporations do not qualify as authorized issuers under Chapter 1205.
McKinney’s EDJA petition was filed three weeks after the NTCA and four local plaintiffs initiated a separate lawsuit in Collin County in late March 2026. Represented by the law firm Norton Rose Fulbright, the city answered that Type B development corporations operate under rules that permit sales-tax revenue pledges. The NTCA’s suit contends that the bonds are improperly secured by McKinney’s general sales-tax revenue rather than dedicated airport revenue.
This legal push follows some public resistance to local airport expansion debt. According to election results, McKinney voters previously defeated a $50 million property-tax-backed airport bond in 2015 and a $200 million airport bond measure in 2023, the latter failing by approximately 58 percent.
City officials have countered that the rejected ballot measures represented pushback against the specific debt mechanics rather than an opposition to the airport expansion itself.
A Travis County hearing on May 18, 2026, served as a scheduling conference, establishing that the OAG’s plea to the jurisdiction is set to be heard on June 29, 2026.
Under Chapter 1205, courts are permitted to require intervening citizens to post a high-dollar security bond to participate in the litigation, though McKinney officials have not publicly indicated whether they will ask the court to enforce that requirement.