Funding Transit

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How do we pay for a transit plan?

We must have a reliable, local funding source to construct and operate a region-wide, multi-modal transit system. After reviewing how transit is paid for elsewhere, the Special Transit Advisory Commission and the NC General Assembly determined that the best way to fund advancement of the regional transit system is through a sales tax, such as that being used by Charlotte and many other cities. A half-cent sales tax referendum was approved by Durham County voters in 2011 and Orange County voters in 2012. Wake County voters have not yet had the opportunity to vote on this transit funding mechanism because the Wake Board of Commissioners has failed to put it on the ballot.

Sales Tax Referendum is Key to Success

Ultimately, the voters will decide if we will build a regional, multi-modal transit system. Federal and state funding is in short supply, so local funding is critical. Also, without a dedicated local source of revenue, federal support is unlikely. The good news is that the half cent sales plus a vehicle registration fee increase will be enough to fund a doubling of the bus service and create commuter rail.

If Wake voters approve this sales tax, it’s projected to raise approximately $60 million in Wake County (2013 estimates). These funds would not replace existing transit funding and could be augmented by increased vehicle registration fees of up to $10. In addition, the Research Triangle Park has the authority to raise local property taxes to be dedicated to transit service within the Park. Of course, given the dwindling federal and state resources for transportation funding, transit planners and local governments will be researching other additional sources of funding to augment the sale tax (public private partnerships, Tax Increment Financing, etc).

Voters support Sales Tax for Transit

According to polls by Public Policy Polling, Triangle voters support a regional transit system, including light rail, buses, along with dedicated lanes for circulators in downtown areas. In 2012, 60% of Wake voters said they would support a half cent sales tax to expand and improve bus service, create commuter rail, and initiate steps for light rail (May 2012, PPP poll).

Download the Wake County "PPP Transit Poll Results".

[Adobe Acrobat Reader is required: Click here to download]

NC General Assembly Gives Approval to Funding Authority

In 2009, the NC General Assembly passed the Congestion Relief and Intermodal Transportation 21st Century Fund and authorized Wake, Durham and Orange Counties to fund by the following:

  • ½ Cent Sales Tax, with voter approval of a referendum for the sales tax.
  • “Inflation Adjustment” of a Regional Vehicle Registration Fee (increase from $5 to $8).  Requires County Board of Commissioners resolution and action by the Triangle Transit Board of Trustees.  This should yield $3,050,748 annually.
  • County Vehicle Registration Fee (up to $7). Requires County Board of Commissioners action. . A $7 dollar levy raises $1,321,754 annually in Durham County, $685,482 in Orange County, and $5,111,176 in Wake County.
  • Research Triangle Park (RTP) to charge a Property Tax for public transportation projects ($ .10 per $100).  Based on approval of RTP Owners and Tenants Association and County Commissions. Each cent of property tax is expected to raise approximately $430,000 based on current valuations.

Together, these sources of revenue, combined with existing dedicated funding from local taxes and car rental fees, will pay for new regional service.  State and federal funding will be sought as well, but the transit plan must begin with local funding. 

Before a Transit Funding Referendum Can Take Place

The County Boards of Commissioners in Wake, Durham, and Orange Counties have the ultimate say as to if and when the sales tax referenda will be calendared for a vote.  A date has not been set, but all three counties are working on specific transit and financial plans. 

Before a referendum can be held, certain steps must be taken:

  • Triangle Transit and the counties must develop a financial and transit system plan which provides for the equitable use of the net tax proceeds to benefit the special district considering the identified needs of local public transportation systems and the expansion of public transportation systems to underserved areas of the district.
  • The plan must be approved by the Board of County Commissioners for each county in the district and the MPOs for the counties.
  • Triangle Transit and the counties must concur in placing a referendum on the ballot for approval of the sales tax increase and agree on the election date.

Referendum Date for Wake? Since the Wake County Commissioners have failed to take action on the plan presented to them in 2011, no referendum date has been set. The earliest date would be October 2015.

Congestion Relief and Intermodal Transportation 21st Century Fund

In addition to the sales tax provisions, the State can provide matching grants to the counties for transit.  To receive state funding, a “Transit Plan” must:

  • Relieve anticipated traffic congestion,
  • Improve air quality,
  • Reduce energy consumption,
  • Promote pedestrian and bicycle friendly environments around and connected to transit stations,
  • Have an affordable housing needs assessment and plan (to include incentives for increasing affordable housing close to transit, an analysis of affordable housing inventory and needs and potential resources for housing),
  • Coordinate with local governments for a reduction in transportation costs, supportive zoning and provisions for affordable housing,
  • Promote the access to public transportation for persons who reside in areas with a disproportion number of individuals below the area median income,
  • Include plans for transit for persons with disabilities

Promote mixed use and transit oriented development to encourage multimodal mobility.

A grant under the Fund may not exceed twenty-five percent (25%) of the cost of the project and must be matched by an equal or greater amount of funds by the applicant. In evaluating projects, qualification for federal funding shall be considered