Before we talk about the 2025 tax referendum, let’s back up 18 years.
That’s when, in November 2007, Mecklenburg voters decided whether to repeal the existing half-cent sales tax for transit.
The first segment of the Lynx Blue Line was set to open a few weeks later. And during the repeal debate that fall, the city said that keeping the tax would let the Charlotte Area Transit System build much more:
- Extending the Lynx to the northeast, through UNC Charlotte and then to a new park-and-ride station at Interstate 485
- Building the Red Line commuter rail to Lake Norman
- Building a streetcar through uptown and to the airport
- Building bus rapid transit from uptown to Matthews using the inside lanes of Independence Boulevard
Voters overwhelmingly approved keeping the tax. The Lynx opened to huge crowds soon after.
But the big promises from that 2007 campaign weren’t kept.
The Lynx Blue Line Extension opened in 2018, but it never reached I-485. It stopped at UNC Charlotte because CATS ran out of money.
Part of the Gold Line streetcar was built, but it was funded by the city of Charlotte — not from the half-cent sales tax. The city still pays for the roughly $5.5 million in annual operating costs from its general fund, which primarily comes from property taxes.
There wasn’t enough money to build the Red Line, nor any kind of rapid transit to Matthews.
Now, in 2025, CATS has big plans for a proposed 1-percentage-point sales tax increase for transportation, which would raise Mecklenburg’s general sales tax to 8.25%. Forty percent of that money would be dedicated for roads, bike lanes and sidewalks; 40% for rail transit; and 20% for buses and new microtransit.
The city has said the tax would cost the average household $240 a year. Voters will decide. A referendum on the plan is on the ballot on Nov. 4.
A make-up chance?
With that 40% of new tax revenue for rail transit, CATS said the new tax can build most of what was promised 18 years ago, though some of the projects have changed. Here’s what’s included:
- The Red Line from uptown to Lake Norman (Though not all the way to Mooresville, in Iredell County)
- Silver Line light rail from the airport to Bojangles Coliseum, through uptown
- Finishing the Gold Line streetcar, with six new miles to the east and west
- Extending the Lynx Blue Line to Carolina Place Mall in Pineville
Rail transit is far more expensive than buses, but it’s a product that Charlotteans appear to favor. Ridership on the Lynx Blue Line has recovered more than the bus system, though both remain below pre-pandemic levels.
So is the new 2025 rail plan realistic? Or is CATS over-promising again?
What happened nearly 20 years ago
Soon after that 2007 vote to keep the transit tax, the Great Recession slammed Charlotte. Sales tax revenue plunged, making it challenging for CATS to plan for new projects.
But the recession was only a temporary setback. The Charlotte economy roared back by mid-decade, and the sales tax began generating the amount of money originally projected.
What also derailed CATS’ plans was a problem common to transit systems nationwide: underestimating how much trains cost to build, as well as the operating costs to maintain a growing system.
The Lynx Blue Line Extension to the northeast, for instance, was estimated to cost $750 million in 2008. But the price of the extension rose faster than the rate of inflation. Five years later, the price had risen to $1.16 billion — despite being two miles shorter than originally planned.
After the Lynx extension opened in 2018, the half-cent sales tax was essentially tapped out, at least for big projects. Now, it pays for ongoing operations. Increases in the amount of money generated by the tax were more or less consumed by higher operating costs, such as a new contract for bus drivers in 2023.
CATS has also had to spend to repair its fleet of light-rail vehicles after a 2023 derailment. The Lynx Blue Line’s infrastructure is showing its age, prompting complaints about the ticket machines and jokes about how the elevators are routinely broken.
CATS has also tripled its security budget to $18 million annually since 2023, in response to shootings and other violence on the bus system. (Beefing up security following the August murder of Iryna Zarutska on the Lynx Blue Line will likely require even more money.)
Running out of money isn’t just a Charlotte problem. Other cities, including Denver, Austin, Houston and Seattle, have had to scale back ambitious rail plans.
The plan for the future
If voters approve the sales tax increase next month, the implementing legislation known as the PAVE Act mandates that the Red Line be built first.
The current cost estimate is $1.38 billion, according to a January CATS presentation. The estimate came from a consultant called Infrastrategies.
The funding plan calls for the Federal Transit Administration to pay for roughly half of the Red Line’s construction cost. (The state of North Carolina has said it won’t participate in new rail transit projects. The N.C. Department of Transportation had paid for about 25% of both segments of the Blue Line.)
But there are reasons to be concerned about the likelihood of a 50% match from the FTA.
The federal government has moved away from funding commuter rail, whose ridership is heavily dependent on people working downtown 9-to-5. The pandemic, of course, allowed employees to work from home, and many have been slow to return to the office.
In fact, Charlotte in 2023 had the second-highest percentage of employees working from home among major cities. And ridership on CATS express buses (which have a similar target ridership as the Red Line) is down 60% since before the pandemic and down 70% percent since 2014.
The FTA appears to have funded fewer than five commuter rail projects since 2022.
It also told the Triangle in 2023 that it wouldn’t fund a proposed commuter rail line for Raleigh-Durham because it didn’t think there would be enough riders to make it financially worthwhile.
Charlotte hasn’t released ridership projections for the Red Line or for any other rail transit project, so it’s impossible to compare how it would fare compared to the scuttled Triangle project or successful ones in other cities.
If the federal government doesn’t fund the Red Line, or if it gives Charlotte less money than expected, the new transit authority would still have enough money to build the train. But it would have to spend more of its own local sales tax revenue to do it.
Silver Line outlook
After the Red Line, the next priority is building the Silver Line from the airport to Bojangles Coliseum.
It’s the most expensive rail project being considered. CATS said the Silver Line from the airport to uptown will cost $2.13 billion. CATS hasn’t said how much it will cost to go from uptown to Bojangles, but it will probably be between $500 million and $1 billion.
To save money, the new transit authority could eliminate the uptown-to-Bojangles segment. But there is little else to cut: If the train doesn’t reach both the airport and the proposed Gateway Station uptown, it doesn’t make sense to build it.
The FTA is still funding light rail and heavy rail, but the agency is awarding more grants to bus rapid transit. Getting a 50% match is critical for this project to move forward.
Earlier this year, CATS made a surprising announcement: The cost of the Silver Line from uptown to Matthews (which is no longer being considered) would cost roughly $500 million less than originally projected. In transit, it’s very unusual for the cost of the projects to go down.
CATS said its consultant lowered the price because it believes it won’t need to buy as many light-rail vehicles and that it won’t have to spend as much to buy land.
After the Red Line and Silver Line, CATS has prioritized finishing the Gold Line streetcar, with new segments to the east up Beatties Ford Road and west to Eastland Yards. Both segments are projected to cost $845 million. CATS is also counting on the FTA to pay for nearly half of that.
But securing a federal match could also be difficult.
Many cities have lost interest in building streetcars since the first Obama administration made grants available to build them. Washington, D.C., announced earlier this year it would stop running its decade-old streetcar and replace it with electric buses.
WFAE reviewed five years of FTA data on grants for streetcars. It appears the federal government has funded one project – a streetcar extension in Kansas City – though a handful of other cities have applied.
While the streetcar faces headwinds, it has the advantage of being relatively inexpensive, allowing the new transit authority to build at least one segment easily. And if money gets right, a future City Council could step in and decide to finish the Gold Line using property taxes.
Blue Line extension
The final rail project is extending the Lynx Blue Line from the I-485/South Boulevard station to Carolina Place Mall. (The full project would go to Ballantyne, but CATS has said it doesn’t have enough money for that.)
CATS has estimated the full extension to Ballantyne would cost $1.8 billion, so running it to Carolina Place Mall would probably cost half of that.
However, that $1.8 billion estimate is very speculative. CATS has said it hasn’t done any design work on the line, so it’s mostly guesstimating — which means the final estimates could look sharply different, and it might be a long time before we see how many of the promised projects the tax can fund.
