Three months after Charlotte budget talks broke down, the City Council resumed negotiations Thursday, picking up right where it left off – debating whether to include money for a streetcar line.

Mayor Anthony Foxx called the meeting in hopes of getting council members to agree on a capital budget, which voters could be asked to approve in November 2013.

In June, council members appeared ready to approve City Manager Curt Walton’s $926 million capital plan, which would be paid for with an 8 percent property tax increase. That plan would have built roads, sidewalks and bridges, but would have also included high-profile projects designed to transform some of the city’s low-income neighborhoods.

But at the last minute, several council members changed their minds and voted no. Two weeks later, six council members passed a smaller capital program – with roughly $660 million in spending and no streetcar – but Foxx vetoed it.

Now council members are trying again. Democrat Michael Barnes, who voted against the $926 million budget because it included the streetcar, lobbied council members to find other ways of paying for the streetcar. He doesn’t want property taxes to pay for the train line, or at least not all of it.

The city is already going to build a 1.5-mile starter streetcar line from Time Warner Cable Arena to Presbyterian Hospital for $37 million – with the federal government paying $25 million.

Barnes says the city should use a 2009 consultant’s report on different ways to pay for extending the starter streetcar line. Among options Barnes floated on Thursday:

• Using a common funding method known as “tax-increment financing.” The city would build the streetcar, and use a portion of property taxes from new development along the line. The idea is that the streetcar would be a catalyst for new housing and offices.

One problem with that idea is one of the first sections would run from Johnson C. Smith University to Presbyterian Hospital, through uptown. Because the area is mostly built out, there would be few opportunities for new development.

• The city could create a new special taxing district, known as a municipal services district, along the streetcar path. Property owners who would benefit from the streetcar would pay more in property taxes.

Creating a new taxing district might be politically difficult. But Barnes said the city could increase the tax rate on an MSD inside Interstate 277 that funds Center City Partners, an uptown think tank/booster group. That money could be used for the streetcar.

• Barnes also suggested asking businesses or institutions along the line to contribute. He said Johnson C. Smith University could follow the lead of UNC Charlotte, which has donated land for a planned light-rail station. JCSU now helps pay for the free Gold Rush shuttle service that runs between the school and uptown.

“We may find one-third of the construction money can be found from alternative sources,” Barnes said. “We should try and diversify.”

The Lynx Blue Line has full support on the City Council. But the streetcar has been a tougher sell. Some council members, such as Barnes, have questioned whether it makes sense to spend heavily on a train that operates with cars and stops at red lights.

As Thursday’s meeting opened, Foxx made a pitch for the streetcar. Using PowerPoint, Foxx showed photographs of what he said Charlotte’s streetcar wouldn’t be: He showed a photograph of San Francisco’s historic trolley. He also showed a photograph of Tinker Toys – a reference to critics who say the streetcar would more resemble a child’s toy than efficient mass transit.

“It’s not the San Francisco treat, and it’s not a Tinker Toy,” Foxx said. “It looks and feels like a light-rail car.”

Foxx: ‘I think it’s worthwhile’

Foxx said he strongly supports building a streetcar line.

“But if this council decides this isn’t a project we should do, then we will go forward (with a capital budget),” he said. “But I think it’s worthwhile.”

Most council members at Thursday’s meeting appeared OK with the idea of raising property taxes to pay for the capital plan. That’s important because any tax increase would go into effect next summer, a few months before council members and Foxx face re-election.

Council members voted 9-2 to advance Walton’s original $926 million plan, with the caveat that they would look for other ways to pay for the streetcar. Republicans Andy Dulin and Warren Cooksey voted no.

If the $926 million plan passes, the owner of a house with a taxable value of $200,000 would pay an additional $72 a year in city taxes.

But Cooksey said that overlooks the fact that thousands of homeowners are already paying higher property tax bills because of Mecklenburg County’s 2011 re-evaluation, which dramatically increased some property values.

Democrat Beth Pickering, who voted against Walton’s full capital budget in June, said she still wants a smaller capital plan that would only raise taxes by 2.44 cents for every $100 of taxable property. That’s the same amount that Mecklenburg County decreased its property tax rate earlier this year.

“I voted against the budget because of re-evaluation,” Pickering said. “I would prefer 2.44 (cents).”

Walton’s full capital plan would raise the city’s tax rate by 3.6 cents.

Council members will meet again this fall to explore ways to pay for the streetcar.