Wake officials, analysts, taxpayer advocates rip transit tax

Taxpayer advocates, public policy analysts, and Republican Party officials Tuesday slammed a Wake County sales tax referendum and characterized a proposed transit plan as a giant boondoggle.

The plan, they say, would cost billions and accommodate few people.

In the first 10 years, according to the Wake County Transit Plan, $2.3 billion in construction costs alone would go toward building a 37-mile fixed commuter rail line and bus rapid-transit lanes connecting the county’s cities.

The Wake County sales tax would jump from 6.75 cents to 7.25 cents per dollar if the referendum, which appears on the Nov. 8 general election ballot, is approved.

“This half-cent sales tax is only … a drop in the bucket for the taxes that we’re going to see in the future,” said Ed Jones, chairman of the board of the Wake County Taxpayers Association.

Jones said he wouldn’t be surprised to see the sales tax rise 2 to 4 cents as losses from the unsustainable transit system mount.

The transit plan “involves a construction project that is bigger than anything else Wake County has ever done, and this includes if you add up the last several school bond projects,” said Francis De Luca, president of the Civitas Institute, which hosted the news conference — along with the Wake County Taxpayers Association — in its North Raleigh headquarters.

“What they build is going to cost money to operate,” De Luca said. “They’re probably going to have to increase property taxes and sales taxes” for several generations.

Tony Pecoraro, Wake County Taxpayers Association vice president of external affairs, said the transit plan rests on three financial pillars: $2.4 billion in higher sales taxes, $950 million in government grants, and $720 million in bonds borrowing. Vehicle owners also would pay $10 more per year in registration fees for each vehicle.

“As far as I know, they have yet to apply for any of these grants,” Pecoraro said.

It’s not even certain the grant money would be approved.

He said interest rates on the bonds could be expensive. The county’s two most recent borrowings, he said the North Carolina Treasurer’s Office told him, went to school projects and were funded on short-term bond notes of three to four years — at 22 percent.

The plan shows an operating loss of $1.8 billion over its life span, and “in latter years of the plan that amounts to over $100 million a year,” Pecoraro said. That likely would be offset by more tax levies.

The plan would triple bus service between 7 p.m. and midnight, when “you’re lucky if you see one or two people on the bus,” he said.

That low ridership has the potential “to increase operating expenses dramatically with no incremental revenue,” he said, meaning the $324 million in fare box revenue projected in the plan, which is about 7 percent of the total cost, probably isn’t attainable.

The plan would require a subsidy of $5.92 for every dollar of revenue collected — just to cover operating expenses, Pecoraro said. “These are numbers that come right from the plan.”

Pecoraro, also a member of the Raleigh Transit Authority, said Raleigh “is likely going to lose its autonomy with regard to any transit projects. We’re going to come under the direction of the Capital Area Metropolitan Planning Organization.”

“The sales tax increase is expected to raise $78.5 million just in the first year,” said Julie Tisdale, city and county policy analyst and research manager at the John Locke Foundation. “That is enough to build four new elementary schools in the first year.”

While others at the news conference urged voters to reject the sales tax hike, Tisdale simply presented a policy analysis without recommending a vote either for or against the tax.

“This plan would be underutilized, inconvenient, and expensive,” she said. Eighty percent of Wake County residents would live too far away from the “high-frequency” service area to use it.

Those who live within that area might find it has no advantages because transit would run station to station, requiring users to walk or catch a connector bus to their destinations, which could prolong the commute time, Tisdale said. The transit option also would preclude picking children up after school, stopping to pick up a prescription, do grocery shopping, or run other errands after work.

The dedicated bus rapid transit lanes would probably be converted from existing car lanes, consequently reducing motor vehicle lanes.

“This plan will not pave one road, it will not repair one pothole, it will not add one lane of transit,” said Russell Capps, president emeritus of the Wake County Taxpayers Association. “It is absolutely a massive tragedy that the people of Wake County are being asked to approve.”

Paul Fitts, Wake County Taxpayers Association treasurer, said the plan transfers Wake County tax dollars to CAMPO, which will decide where to spend them. “If CAMPO decides it wants to pay for a light rail line between Durham and Chapel Hill with Wake County tax dollars “they can do that.”

Fitts took issue with how the transit plan was drafted.

“There has not been one single public debate where the public could ask real questions about this, and have people who have answers on both sides,” he said. He challenged advocates of the transit plan to hold a public forum in the name of good government and transparency.

Fitts reconfigured a statement by then-Speaker of the U.S. House Nancy Pelosi, who, to paraphrase, said Congress must first pass the Affordable Care Act before truly assessing its content.

He said Democratic County Commissioners James West, Erv Portman, and Greg Ford “admitted to me on videotape that they haven’t even read the [transit plan], and done their own numbers. So in my opinion this is Obamacare all over again.