CATS CEO Says More Local Revenue Needed For 2030 Expansion Plan

Jan 31, 2019

The Charlotte-area transit system is busy these days planning for the region’s mass transit future. Last week, CATS unveiled updates to its 2030 transit plan, including the proposed development of new rail lines to points north, south, east and west across Charlotte-Mecklenburg.

Many questions remain – including how to pay for more mass transit. CATS CEO John Lewis talked with WFAE's Mark Rumsey and he said the system will need more tax revenue to get the job done.

CATS CEO John Lewis with All Things Considered Host Mark Rumsey.
Credit Sarafina Wright

John Lewis: What is absolutely clear is that the current half-cent sales tax will not support anything beyond what we currently have in place today. So, we're going to have to have a conversation with the community to number one, reiterate whether or not this is still a priority for the community. And if so, are they willing to invest to enable us to still meet that 2030 promise that was originally laid out when the plan first was presented?

Mark RumseySo, it sounds like you're suggesting a discussion about increasing that half-cent transit tax that was approved in 2002. 

Lewis: There would absolutely have to be additional local revenue whether that's a sales tax or some other form — that'll be up to the citizens and elected leadership.

Lewis also said one option is for the system to get a percentage of tax revenue gained from new development along rail transit lines. He addressed challenges to what already exists, such as the Blue Line extension that opened last March. Daily passenger numbers are 6,000 to 10,000 lower than projected.

Related Content: CATS Gives New Details On 2030 Plan, Including New Rail Along I-277

Lewis: So as we opened, there were a couple of stations that were very good trip generators — in NoDa and Sugar Creek — that were impacted by other projects. And so, 36th Street was not open until the fall, so access to the station was limited and we're still having issues at Sugar Creek where the service is open.

The station is open but the Sugar Creek Bridge limits vehicle access to the station and so as those projects finish, we believe that we'll get closer to our projected ridership.

Rumsey: How are these initial ridership numbers that are lower than the projections for that Blue Line extension affecting cats financially?

Lewis: When you look at the overall financial situation with gas, I mean transit systems in North America are not profit-makers. Very few, if any, even break even. And so we continue with the good thing about the situation is the economy is strong and our sales tax income — which is what predominantly funds CATS —continues to outperform even our most conservative, wildest estimates. And so while ridership still is growing, we're more than making up with that with our sales tax income.

Rumsey: Now regarding the 2030 transit plan that CATS recently updated with new details, one major shift in this new plan is that CATS staff now recommends building a light rail line from uptown through west Charlotte to the airport — and possibly beyond into Gaston County. Previously, I believe, CATS had envisioned streetcar transit along this west quarter. What prompted the change in thinking?

Lewis: Well I think the change in the region is what prompted that. Over the last year and a half, we refreshed the overall plan. We took a fresh look at the Red Line corridor, the Silver Line was updated from bus rapid transit to a light rail. We have now, as a result of this study, the Silver Line is one continuous corridor from Matthews to uptown to the airport.

Rumsey: So you've mentioned the planning for light rail also to Matthews. This plan also talks about extending the southern end of the blue line through Pineville down to Ballantyne. These are very ambitious plans. How much is all that going to cost?

Lewis: Well when the reason we're doing this is initially the South corridor was supposed to end in Pineville. There were decisions made that led us to end the south corridor at [Interstate] 485. I think the leadership in Pineville has changed its thought process on that. And just last fall the Pineville City Council came out with a resolution supporting the extension of the blue line to Pineville, which really began to open up the opportunities to go south.

And so we also will be recommending that to our board that we look at extending the South corridor of the blue line from Pineville down to Ballantyne, which is a rapidly growing area and really becoming an economic engine for the region.

Of course, people want to know what the potential costs will be. And while I will not hang my hat on this cost — we did just open the blue line extension in March. And so the blue line extension cost is about $125 million per mile. That's very back of the napkin but at that baseline, you're talking about $6 billion to $8 billion.

Rumsey: For all of these additional corridors east, west, south. All the extensions would cost $6 billion to $8 billion. So where does that money come from? I know some of it comes from the federal government but that's unpredictable.

Lewis: Sure. Well, it's very clear that the federal government needs to remain a significant partner when we open the blue line and the blue line extension. The funding breakdown was generally 50 percent federal, 25 percent state, 25 percent local. Without the federal government as a partner, it's just impossible for local government to make up that difference.

But we're going to continue on the path that the federal government still maintains interest in funding infrastructure. And I think that's what we're hearing from Congress now. The state of North Carolina has gone back and forth on its participation. Again the Blue Line extension was 25 percent state participation over the last couple of years that's gone from down from 25 percent down to $500,000 back up to 15 percent. So, we're still working with our partners at North Carolina Department of Transportation and at the state level to understand what the potential for state funding will be.

Rumsey: Shifting gears briefly to talk about the other big part of CATS buses, which are still a dominant part of the mass transit scene in Charlotte. Last fall, there were some changes implemented to try and address this issue of the hub and spokes system with buses where everyone basically would come downtown and take another bus back out to where they really wanted to go. Now there was an effort to make more crosstown routes. Has that worked?

Lewis: We're three months into it and I think anecdotally we're getting very good information on ridership over the last year or so. We're decreasing from a bus standpoint in double digits. We have seen over November and December — [and we're] waiting on January's numbers — that we've slowed that hemorrhaging.

Our systems, and many transit systems, were designed to bring people lived in the suburbs into the center city where the jobs were. Well, now you've got what I'm going to call "edge cities." University City is a destination. Ballantyne is a destination. The airport is a destination. And so, we force so many of our customers who want to go from suburb to suburb to have to go into uptown, get off one bus, get on another bus and go back out of town. On average if you had to take more than one bus from your origin, the destination your average trip was 90 minutes. And that's just unacceptable.