Voters just OK’d tax for roads, transit. So, why does Charlotte want 2026 bond?
AI-generated summary reviewed by our newsroom.
- City could seek voter approval for a transportation bond this year.
- The P.A.V.E. Act requires Charlotte to keep funding roads at its 2014–2024 average.
- Sales tax under the P.A.V.E. Act cannot replace the city’s investment.
Charlotte plans to ask voters for hundreds of millions of dollars in a bond proposal as the city starts tapping into a new funding stream.
Mecklenburg County voters approved a 1% sales tax rate increase last year to pay for regional transportation projects. The Charlotte City Council is now considering a potential transportation bond package — also to help fund road improvements.
“Those two things are not inconsistent,” said Councilman Ed Driggs, chair of the transportation committee. “Bonds are the use to which we put the sales tax. We get the sales tax, and that enables us to borrow money to pay for roads.”
Bonds are a form of debt that allow the city to pay for major projects over time rather than all at once. When voters approve a bond, they’re agreeing the city can use their property tax money to pay it back.
But under the P.A.V.E. Act, which is the law authorizing Mecklenburg County to raise sales taxes, the city can instead pay off the debt using sales tax revenue. Charlotte must still get voter approval for bonds regardless of how the city pays for them.
“What’s the intended use of the sales tax? To pay for roads by doing debt service like bonds,” Driggs said.
The City Council is still debating what a potential bond package could look like. Staff recommended $300 million in bonds this year, but Charlotte could borrow as much as $500 million, according to Matt Hastedt, chief financial officer.
Voters approved $400 million in bonds in 2024, including a record $238.3 million for transportation. Money went toward sidewalks, congestion mitigation, intersection improvements and Vision Zero, an initiative intending to eliminate traffic fatalities.
Before that, voters approved a bond package in 2022 worth $226 million. Bonds typically land on ballots every other year.
During a budget meeting on Monday, City Manager Marcus Jones said state law requires Charlotte to keep funding its roads from its own budget, too, if it wants access to the new tax dollars. While the state takes care of maintenance for a number of major roads like interstates and highways, the city must maintain other high-traffic thoroughfares.
“(The sales tax increase) was designed so that you couldn’t take the new money and all the sudden pay for stuff that you’d been paying for all along,” City Manager Marcus Jones said during a Monday budget meeting. “We’re going to pay for stuff that we’ve been paying for all along, and then on top of that we have this.”
The city must continue investing, at minimum, the average amount it spent on roadways annually between the 2015 and 2024 fiscal years. That’s about $51.3 million the city will have to fund next year.
This year’s budget exceeded the benchmark by more than $9.5 million.
“We know that those expenditures are only going to grow as contracts increase, as costs increase. So we can be comfortable that we’ve cleared this hurdle and can refocus on how to use the P.A.V.E. Act revenue most efficiently,” said Hannah Bromberger, deputy director of strategy and budget.
The P.A.V.E. Act is projected to generate $19.4 billion over 30 years with 40% going toward rail transit projects, 20% toward bus and microtransit and 40% toward road projects in Charlotte and Mecklenburg’s towns. Under that formula, Charlotte would see more than $100 million in road investments each year from sales tax dollars.
