Why I OPPOSE the Repeal of the Transit Tax

Submitted to the "The Herald"

October 2007

While I agree with my friends and colleagues who point out Charlotte-Mecklenburg has significant road construction needs, I disagree that repealing the transit tax is the right solution to the road-funding problem.  In fact, I share the view of those who think the repeal is bad tax policy, and a bad strategy for securing new funding for roads.

Before anyone concludes I support the proposed rail expansion plan for the North and Northeast lines think again.  I do not support the proposed rail expansion for a variety of reasons, not the least of which are the fact that there is NO Federal funding for the North line and the future tax burden on the citizens of North Mecklenburg is unclear or unknown.  While repeal advocates attempt to label those who oppose the repeal as “pro train,” it is a gross over simplification at best and an intentional attempt to mislead voters at worst.

The repeal is bad tax policy because it eliminates a broad-based sales tax, it all but guarantees a property tax increase, and repeal advocates offer no plan for how baseline funding for transit will be provided.  The transit tax generates almost $80 million annually and nearly one third ($26 million) of the tax is paid by people who do not live in Mecklenburg County.  Eliminating this tax will create a major funding shortfall for existing mass transit (mainly buses but also the South Rail Line) with no strategy for funding existing operations.  Some have said Mecklenburg County, the City of Charlotte, and CATS will simply need to reduce spending or cut other services, but what are the odds they will implement double digit cuts in spending to cover the gap?  Not good.

Many advocates for the repeal acknowledge property taxes will be increased to cover the shortfall.  One proponent conceded the repeal would likely result in a “small” property tax increase, which is as welcome as a “small” heart attack.  Others believe the repeal will hasten the implementation of new “local option” taxes recently authorized by the legislature and most likely the real estate transfer tax.  That is a bad idea.

The repeal is bad strategy because it reduces the options for producing additional revenue for roads.  The assertion that we can easily redirect the funds to be used exclusively for roads is simply incorrect.  Rather than repeal the tax, we should revise the existing legislation to allow a portion of the proceeds to be used to build roads.  The current legislation already authorizes the use of the transit tax revenue for HOV lanes, and we should pound the table for this use.  We should also secure voter approval for the implementation of the new local option one-quarter cent (1/4¢) sales tax that would be solely dedicated to retiring voter-approved bonds for road construction in Mecklenburg County.  Repealing the current transit tax could set back efforts to get net new funding for roads for years, while moving forward with a dedicated 1/4¢ sales tax for roads could produce hundreds of millions of dollars NOW for road construction in Mecklenburg County.

While it may be true the transit tax repeal will “Stop the Trains,” the County’s property owners and options for road funding will be the babies thrown out with the bath water.  If the repeal succeeds, it will increase taxes for property owners and it will limit options to secure funding for roads.  If the repeal is defeated, we will continue to have opportunities to debate the light rail expansion, and we will avoid significant negative unintended consequences.

I urge voters to join me in voting against the repeal, and in continuing to pursue viable options for road funding.