Charlotte task force recommends sales, property tax hike for expanded transit

CHARLOTTE — The debate over Charlotte’s transit future is kicking off.

The Charlotte Moves Task Force is recommending that the Charlotte City Council consider a sales tax increase and a property tax hike to fund a Transformational Mobility Network. The formal recommendation will be presented to city leaders in December.

“Literally, we have no choice as a community but to move forward if we care about economic development, business development and neighborhood development,” former Charlotte Mayor Harvey Gantt said.

The Transformational Mobility Network includes light rail expansion to Ballantyne, Matthews, the airport and Belmont. It also includes bus, bike and sidewalk improvements. The task force estimates it will cost $8-12 billion, with a local share of $4-6 billion.

[PAST COVERAGE: Task force to hash out funding options for expanding light rail to airport, Matthews, Ballantyne]

“We are at an opportunity as a community where we can go big, or we can try to bite off little bites and chews,” said Ernie Reigel, a task force member and attorney for Moore & Van Allen.

The task force is recommending a sales and property tax increase. The sales tax increase could be a half-cent or a full cent. Either way, it will need legislative approval by the state. A 0.5% increase would generate $110 million a year, and a 1% increase would generate $220 million a year, according to the city’s chief financial officer.

The task force is also recommending a property tax increase. How high the property tax should be depends on how high the sales tax increase is. The current rate is 0.3481%. A one-cent increase would generate $14 million annually; a two-cent increase would generate $28 million annually; a three-cent increase would generate $42 million annually, and a four-cent increase would generate $57 million annually, according to the city’s chief financial officer.

The increases would be subject to a referendum in the fall of 2021.

“The way that it is articulated and messaged to people is really critical,” Reigel said.

“We just have to make it relevant to them and help them understand what they are paying for in this property tax increase and sales tax,” said David Ward, assistant vice president at Brighthouse Financial.

The council’s relationship with Raleigh is a little rocky, but city leaders will need to convince state officials to grant them permission to raise the sales tax. Gantt said the main argument will be that the city needs to take the action to stay competitive with its peers.

“If we don’t do so, we will, in fact, retrogress as a community,” he said. “We will fall behind competitors. We will lose the advantages we have today in terms of job creation and development.”