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 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. A half-cent sales tax to fund the regional transit system must be voted on by referendum in each county. Durham and Orange counties have approved the sales tax through referendum. The Wake County Board of Commissioners has the sole authority to schedule a sales tax referendum in Wake and have not taken action to date.
Sales Tax Referendum is Key to Success
Ultimately, the voters will decide if we will build a regional, multi-modal transit system.
The ½ cent local sales tax provides local funding for the regional transit plan. Federal and state funding and support will only be considered when a dedicated, LOCAL funding source is already in plan. Local funds would not replace existing transit funding and would be augmented by increased vehicle registration fees.
Per the legislation, before the referenda can take place, each county must develop a financial transit plan (which details the various transit investments) to be approved by the county commissions and the MPOs. Once there is approval of the financial transit plan, the county commissions must agree to put the referendum on the ballot. Durham and Orange have successfully followed the procedure, but Wake County has not moved forward with the financial transit plan since it was presented in December 2011.
NC General Assembly Gives Approval to Funding Authority
In 2009, the NC General Assembly passed the Congestion Relief and Intermodal Transportation 21st Century Fund [link to law citation at ncleg.net] 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.
- Voter referendum held during municipal, general or primary election.
These steps have already been completed in Durham and Orange, but are pending in Wake to date.
Election Date? The goal is to hold a referendum in all three counties during a municipal, general (October, November) or primary election (May).
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