Applying the Funding Strategy
Estimates indicate a full Transformational Mobility Network program could cost around $8 billion to $12 billion, which would include design, construction, operation, maintenance and financing costs over 30 years. About half that amount, $4 billion to $6 billion, could potentially be sourced through federal and state partners, with the other half coming from local sources. The task force spent much of its Tuesday meeting discussing gaps in local funding and potential new revenue sources to fill those gaps.
Currently, City of Charlotte residents are asked to vote on the issuance of bonds to fund transportation projects that are paid for by property tax revenues. Additionally, a voter-approved dedicated sales tax has been used to fund transit for the last twenty years. These existing revenue sources are unable to support the transformative transit and transportation initiatives required for a rapidly growing city.
To supplement the bonds and sales tax, and reach the needed $4-6 billion in local funding, the task force is weighing various options, including increasing the city's transit sales tax and a dedicated property tax for other transportation modes. Although additional funding options exist, such as an increase to vehicle registration fees, they would generate a smaller and less transformative amount of revenue. As the task force saw in an example strategy on Tuesday, these new sources of funding could together generate $2.3 billion to $8.6 billion over 30 years.
"We know we are trying to solve for [$4 billion to $6 billion in local funding]," said the city's chief financial officer Kelly Flannery. "There is a path to get to four to six with those three sources being contemplated."
Combined, new funding sources and the existing, planned transportation bonds could generate between $3.8 billion and $10.1 billion in revenue over a 30-year period.
Also important to the discussion was comparing Charlotte to its peer cities. Charlotte has a 7.25% sales tax, of which 0.5% is dedicated to funding transit. This is a lower rate than comparable cities such as Nashville, Tennessee; Atlanta; Austin, Texas; and Denver.
"We should remind ourselves that these also are cities that are doing something right now with mobility," said Assistant City Manager Taiwo Jaiyeoba. "Either they've just done it or they've done it recently. Whether they've failed or not, they constantly have it at the very back of their minds."
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