Watch your wallets. Charlotte's leaders are about to go on a transit spending spree they know they can't afford. Their ultimate plan? To hold county taxpayers hostage.
Here's how it will work. First they'll find the money to build one to two more rail transit lines and a streetcar, all of which they know they don't have the money to operate. Then, once construction begins or the money has been spent, allocated or a combination thereof, the sticker shock phase will begin.
There will be high drama as politicians pretend they have just discovered that they don't have the hundreds of millions of dollars it will take to operate the new lines they are scraping the dollars together to build.
Some will demand answers. How did the Charlotte Area Transit System end up with operating deficits in the hundreds of millions? They'll feign bafflement for the cameras. They'll have special committee meetings to figure out what to do. Then they'll hike taxes again to pay for it.
Everyone knows the plan, even transportation reporter Steve Harrison at The Charlotte Observer, who has begun to hint in his articles at the coming tax hikes necessary to prop up the system.
As usual in Charlotte, by the time this all goes down, there will be no one to blame, kind of like when the South Boulevard light rail line wound up costing double what it was estimated to. Some unknown employee of the consultant who did the original transit plan cost estimate in 1998 "forgot" to figure in inflation and some other really important expenses, the powers that be eventually explained. So sorry.
But the cost of the South Boulevard light rail line wasn't the only piece of the transit plan that was grossly "misunderestimated" -- deliberately, I think -- back in 1998. So were the operating costs. Taxpayers just haven't realized it yet.
As those taxpayers will soon see, operating costs were seriously re-misunderestimated -- again I think deliberately -- in 2007, by CATS chief executive Ron Tober, with some help from his friends at Wachovia. Before the transit tax referendum in November 2007, Tober and Wachovia execs who had reviewed CATS' plan promised that the half-cent sales tax would bring in enough to build and operate the system without further tax hikes. Last month, we learned that wasn't true for building it, as the city is now seeking funds to construct two rail lines and the street car.
But what no one is talking about -- deliberately, I think -- is what it would cost to run the expanded system. Light rail requires massive subsidies to operate, far beyond what riders pay. But incredibly, with just one line up and running, CATS is currently struggling to pay operating costs and cutting light rail trips to save money. To make up the difference, they've even gone so far as to shut down bus service on some bus routes used by poor riders who can't afford cars.
CATS officials blame the economy for the $5 million shortfall in projected transit tax revenues, as well as high fuel prices earlier this year. Those things have no doubt contributed. But if CATS isn't bringing in enough sales tax revenue to run one line in a bad economy, how on earth will it run three lines, buses and a street car in an average one? Or even two lines and a street car? Heck, another rail line and a street car?
It can't, and the city's leaders know it. An operating deficit this massive must have been obvious to CATS management back in 2007 as well. But no one is talking about that in much detail right now.
This is all part of the plan. Put the new lines in motion, feign shock at the true operating costs, then wallop the public with tax increases to pay for it. That tax increase will likely mean another increase in the sales tax along with property tax increases. Their plan will work, of course, because incrementalism always does.
Why do it this way? Why not just tell the transit-loving public the truth? Because Charlotte elites have long believed that if the public knew the full price tag for this thing, it wouldn't have passed in 1998. If voters knew they were voting for tax increases in 2007, there might have been a different outcome.
Incredibly, the Charlotte Chamber and city leaders actually hung the 2007 campaign to keep the transit tax on a promise not to raise taxes again to pay for the system. In fact, they went a step further, telling voters that if they voted to get rid of the half-cent sales tax for mass transit, it could lead to property tax increases.
Those who were around during the estimating and planning phases, including then-City Manager Pam Syfert and former CATS CEO Ron Tober, will have faded into the mist by the time the crap hits the ceiling and the real costs are known. The staff at The Charlotte Observer will tie itself in knots attempting to explain the 1998 misunderestimation and the 2007 re-misunderestimation without asking any actual tough questions.
And city leaders will get their money. They always do. Just watch.