Fact-checking the criticisms (and the fact-checking) on transit

It’s official: Mecklenburg voters will decide in November on whether to raise the sales tax by one percentage point, to 8.25%, to pay for a multi-billion-dollar roads and transit plan.

Mecklenburg Commissioners voted 8-1 Wednesday before a chamber packed with supporters to place the tax referendum on the ballot.

Before we get to a fact check, it’s worth noting some of the strange alliances the protracted transit debate has produced.

Some of the most influential supporters of the 1-cent sales tax are Republicans: City Council member Ed Driggs. Attorney Larry Shaheen. State Rep. Tricia Cotham.

The Charlotte Regional Business Alliance is spearheading a $3 million campaign to get the tax approved. The alliance is non-partisan, but many members are more conservative than the county overall.

And at Wednesday's public forum, there were hardly any speakers who opposed the plan from a traditional conservative position of rejecting a tax increase and wanting a smaller government.

On the Democratic side, there are many supporters, including elected officials, transit advocates, religious and nonprofit leaders. But it’s also true that the most vocal opposition is currently from the far left: Former Charlotte Mayor Jennifer Roberts. Former City Council member Braxton Winston. Robert Dawkins of Action NC.

So there you have it: Pro-tax conservatives and small government liberals?

This newsletter will look at some of the criticisms levied against the tax, and whether they hold up.

To counter their claims, the Business Alliance this week released talking points. Inside Politics will fact-check the alliance’s fact check as well.

What the opponents are saying

Roberts was mayor from 2015 to 2017. She thinks the 1-cent sales tax increase is too expensive and will hurt low-income residents. She would prefer Mecklenburg County instead ask voters to approve a quarter-cent sales tax increase that can be used for anything.

In an email to Mecklenburg commissioners, she said the quarter-cent tax would provide money immediately to implement Charlotte’s Better Bus program and allow the regional to “continue to work on a funding package for the rail line, which could include innovative funding that does not unfairly burden the poor — tax increment financing, parking fees, rental car fees, naming rights, advertising revenues, station rents, municipal service districts, etc.”

The problem with those alternate funding sources is that they have been explored in the past — and they just don’t generate nearly enough money to pay for multi-billion-dollar train lines.

In an interview, Roberts said that might be true.

But she added: Don’t blame me. She just took that language from the GOP bill that Cotham wrote and Republicans have championed.

Cotham’s bill does, in fact, calls for there to be a study of alternative ways to pay to bring the Silver Line light rail to Matthews. It says the region should study options like “municipal service districts, tax increment financing, public-private partnerships, sale of naming rights, station rents, station air rights, advertising revenues, sale of amenities on public transportation (such as Wi-Fi or priority seating) and private donations.”

Roberts also raises concerns about affordability, gentrification and low ridership on buses.

Many of her concerns are echoed by Dawkins, a longtime activist. He released on social media this week 10 reasons why his organization, Action NC, opposes the tax. You can read it here.

He wrote that Charlotte Area Transit Systems’ “past performance speaks a tremendous amount about one’s ability, future success, and likelihood for future success.” He said that both segments of the Lynx Blue Line were over budget and that the length of the second phase was cut short to save money.

That is all true.

Dawkins added that CATS staffing levels were later “problematic” and that “bus routes were cut.” That did happen in 2022. Some of the money dedicated to Better Bus will be to restore that service, though the tax money will also provide increased service frequencies in other areas that have never existed before.

He also said: “To reassure us now, they have not even released ridership projections, estimated cost per project, hired a person to run CATS…”

In fact, CATS has released cost estimates for each rail project. But Dawkins is correct in that the transit system has not released projections for how many people will ride each rail line or how many people will use the system once Better Bus is complete in five years.

Dawkins is also skeptical of microtransit — a linchpin of the Better Bus program.

Microtransit is CATS’ new on-demand ride-share service to compete with Uber. It lets people summon a vehicle to pick them up at their house (or wherever) and bring them to their destination, within a certain zone. CATS recently started micro in north Mecklenburg. If the tax passes, it would expand the service to nearly 20 zones throughout the county.

In his manifesto, Dawkins wrote: “Microtransit is being hailed as a solution to shorten travel time but without reserve funds to cover the extremely high subsidies to operate, it will most certainly be reduced because of the high cost with increased ridership.”

It’s possible this could happen. So far, micro has attracted more riders each month that it’s been open. In June, it carried 4,900 passengers, up from 3,700 the month before.

Micro’s fixed costs are high — at roughly $185,000 a month. For the moment, that works out to about a $40 taxpayer cost per trip (not including the $2.20 the rider pays).

But when micro adds a new passenger, CATS isn’t on the hook for an extra $40 for the trip. As we said earlier, micro has high fixed costs, so it operates more efficiently the more people that use it.

It’s possible the service could become so popular that CATS has to buy more vehicles and hire more drivers and the fixed costs go up. That would be a good problem to have. But it could lead to service reductions elsewhere.

What the Business Alliance says

The Charlotte Regional Business Alliance is leading the push to get the tax passed. Early this week, a public relations firm hired by the alliance — the D. Wilson Agency — sent the media a release titled: “Separating Fact from Fiction.”

You can read the Alliance’s full release here.

Here are some of their fact checks:

FICTION: There are no real numbers behind the plan. 

FACT: There is a clear plan with real data, cost breakdowns, and timelines. Details like ridership projections, cost per project, and expected impact are being shared with the public and updated as things move forward.

This is not correct.

The Charlotte Area Transit System has not released ridership projections for each rail transit line, or at least they haven’t been shared publicly with the City Council and Metropolitan Transit Commission. CATS also hasn’t shown long-term trends in transit ridership (down nearly half since 2014) and how many new riders the plan is expected to attract.

FICTION: The sales tax will result in a 14% increase in taxes. 

FACT: This is false. The tax is one cent on the dollar.

This is technically correct — the sales tax increase is not a 14% increase in all taxes — but it appears to be a straw man argument. Former City Council member Braxton Winston posted on social media that the plan calls for a 14% increase in the sales tax, which is correct (8.25 is 14% higher than 7.25). Roberts has also talked about the 14% increase being on the sales tax.

FICTION: This is a regressive tax and makes people with less pay more in taxes. 

FACT: The additional one cent on the dollar will not be applied to commonly purchased items like gas, groceries, SNAP-eligible items and medicines — these items are excluded. The trade off is significant — for a penny you get more frequent transit service, better bus stops, faster response from police, fire and medic, as well as access to jobs, education, healthcare and meaningful opportunities. 

Sales taxes are widely considered by economists to be regressive taxes. That’s because low-income residents spend a greater share of their income on taxable items than wealthier families. (To be fair, the city doesn’t have the legal ability to levy a progressive tax, in which high-income people pay a higher percentage than low-income residents.)

The alliance is correct in that many essential items like groceries are exempt from the higher sales tax.

FICTION: Some neighborhoods are still getting left behind. 

FACT: The plan prioritizes places that have been overlooked in the past. East Charlotte, North Mecklenburg, and inner-city neighborhoods are getting new investments. That includes better bus service, improved sidewalks, and safer ways to get around. 

All parts of Mecklenburg County are receiving new money. There will be new road money spread across the county, and the transit plan calls for new microtransit and increased bus service in most areas as well.

North Mecklenburg, for instance, is a big winner. In addition to road money and bus money, it’s also guaranteed to get the Red Line commuter train to uptown — a project that’s been delayed for decades.

East Charlotte, however, didn’t fare as well. While the area gets road and bus money, the Silver Line is slated to stop at Bojangles’ Coliseum instead of running through east Charlotte en route to Matthews. The east side is slated to have the Gold Line streetcar extended to Eastland Yards.