Clodfelter: Charlotte must discuss new revenue for transit

Charlotte Mayor Dan Clodfelter said the city should discuss new ways to fund transit during his “state of the city” speech Tuesday, though he cautioned he didn’t want to get ahead of the City Council on making any recommendations.

The Charlotte Area Transit System is funded by a half-cent sales tax that was first levied in 1998. Revenue from that tax is almost entirely committed for operating the bus system and building a 9-mile extension of the Lynx Blue Line.

In his speech, Clodfelter said the discussion about transit funding would be necessary because he doesn’t believe the state will fund future transit projects as they have in the past. The N.C. Department of Transportation has paid for 25 percent of both light-rail projects.

“In the area of transportation we may well be called upon to debate and think about what has always been unthinkable – the idea that we may need to be willing to assume some additional responsibilities locally that have previously been the responsibility of state government,” Clodfelter said during his speech.

In an interview after the speech, Clodfelter said the city might look to York County, S.C., which has a “Pennies for Progress” 1 cent sales tax for road projects.

The General Assembly has been considering expanding the sales tax base to include more services. If that happened, it could generate more revenue for CATS.

But it’s unclear if an expansion of the sales tax base would give CATS enough money for a sizable transit project, such as a streetcar extension or commuter train to Lake Norman.

He said a transit funding working group has thought of creative ways to finance transit projects, but the group hasn’t solved the issue of “how do you pay off the debt.”

Though Clodfelter said the city should start discussing ways to get more revenue for transit, there is already an option that’s available: Increasing the sales tax by a quarter-cent.

That tax increase can be used for anything. Voters in November rejected a plan to use that sales tax hike primarily for teacher pay raises.

The recession hurt CATS’ revenues, as people pulled back spending for several years starting in 2008.

But it’s unclear whether CATS could have built all of the transit projects it promised even if there had not been a recession. One reason is that transit projects have cost far more than projected. For instance, the Lynx Blue Line extension was projected to cost $700 million in 2007. The new cost is $1.1 billion – and that was after CATS stopped the line at UNC-Charlotte instead of going all the way to Interstate 485.

In his speech, Clodfelter did not discuss whether he would seek the mayor’s job in city elections this fall. He told reporters that he would not discuss politics on Tuesday.

The City Council appointed Clodfelter to the mayor’s job after former Mayor Patrick Cannon’s arrest on federal corruption charges in March.

Some council members have said that Clodfelter told them he would not seek the mayor’s job this year, which they said was a condition for his being selected.

Council member David Howard and former County Commission chair Jennifer Roberts, both Democrats, have said they are running for mayor.

In his speech, Clodfelter said the city was resilient in dealing with what he called “civic trauma” – a reference to Cannon’s arrest. Clodfelter said the city realized last year that it could survive the Cannon scandal without “losing its place, without losing its spirit.”

He compared the Cannon arrest with the U.S. Supreme Court decision in 1970 that desegregated schools.

“Charlotte became known as the city that made desegregation work,” said Clodfelter, who spoke at the Charlotte Mecklenburg Government Center.

Clodfelter also highlighted some of the upcoming issues that council members will face.

This week the city is scheduled to hear a financing plan from a Florida developer about building an amateur sports complex near Bojangles’ Coliseum, which would be funded in part with $37 million of public money.

The city is still trying to develop the empty 80-acre site at Eastland Mall.

There are also questions about how to pay for long-term capital needs for the city’s storm water system and water and sewer facilities.

The city will soon start budget season with the loss of the Business Privilege License tax, which will leave a $18 million hole in the Charlotte budget. As a legislator, Clodfelter supported changing or getting rid of the tax.

Clodfelter did not discuss the loss of the business tax in his speech. He did mention a new effort to study the city’s lack of economic mobility.

The Charlotte area ranked last among the country’s 50 largest metro areas for upward mobility, according to researchers at Harvard University, University of California, Berkeley, and the Treasury Department.

“We cannot fail to respond to the fact that Charlotte has been singled out in several recent national studies as one of the most challenging large urban areas for people starting out on the bottom rung and trying to move up the ladder,” Clodfelter said.

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