Council members draw streetcar line in the sand over capital investment plan

Six months have passed but not much has changed in the argument over Charlotte’s nearly $1 billion proposed capital investment plan.

Mayor Anthony Foxx postponed a scheduled budget retreat recently, hoping in part that time would heal all wounds – or at least work to stop the ever-growing divide between council members on what’s become the proposal’s most controversial issue: $119 million to extend the Uptown streetcar project. The streetcar proved to be the undoing of any compromise on passing a capital investment plan last summer, and remains both the fork in the road over continued negotiations and what amounts to a naughty word to many taxpayers in south Charlotte.

The complete investment plan, at $926 million dollars, could force a 3.6-cent tax increase for Charlotte property owners if approved in full. Out-going City Manager Curt Walton proposed the plan last year in part to lure in new business through infrastructure improvements and transform portions of east, north and west Charlotte to the point where those regions could carry more of the city’s tax burden. That would theoretically decrease the impact on south Charlotte, which pays a higher percentage of city taxes.

That tax burden, if approved, will fall on voters in south Charlotte who are finding it hard to see how the capital investment plan helps them. Of the projects included in the plan,  a new police station, a small road extension and work on a regional walking trail would be in south Charlotte. That’s caused some to complain about the fairness of the plan, though Ballantyne-area Councilman Warren Cooksey said his concerns about the plan aren’t based on any south Charlotte vs. Center City fight.

“I’m not trying to say there needs to be a 1:1 ration on spending and taxing,” Cooksey said of where the projects would happen. “Every tax area has a place that pays more and a place that gets back more than it pays.”

Cooksey just asks that the city studies what partnerships are available in the areas where taxpayers may soon spend millions on improving. He points to the partnership between Bissell Companies in Ballantyne and Charlotte, as the company is paying $11 million for road improvements that will help Ballantyne and Bissell Companies in exchange for a portion of increased city and county tax revenues tied to the road improvements. At least one of the projects Bissell Companies is paying for – a bridge at North Community House Road crossing Interstate 485 – was something the city planned on doing in its long-range plans, but the partnership makes it possible much sooner and for much cheaper.

Cooksey points to one part of the capital investment plan, in the Whitehall retail area, where the city will spend $30 million on improvements to help businesses grow and bring in new businesses. The council member said he can’t understand why a public/private partnership like what the Bissell Companies is doing wasn’t considered in Whitehall.

“It blew my mind that we aren’t having the same discussions in Whitehall,” Cooksey said. “If the stated goal of the plan is to be transformative and improve property values (in areas in need) … can’t we find ways to at the very least supplement the cost of these projects with local resources instead of relying solely on property taxes?”

With that logic in mind, Cooksey said projects like the streetcar shouldn’t be included in the plan if they can’t improve the area enough to help pay for their cost.

“The streetcar can’t pay for itself through transforming its corridor,” Cooksey said shortly after the latest round of budget talks was postponed. “If a project is ‘transformative’ shouldn’t it help pay for itself? The (streetcar) corridor won’t generate enough” tax revenue to be worth the price tag.

Cooksey was one of the council members who pushed this summer to stop the $926 million plan from being approved. Cooksey was against the tax increase that would accompany approval of the plan, in part because of the negative impact many homeowners felt from the 2011 property tax revaluation. He said this spring he might get onboard with a plan that only raised taxes 2.4 cents – the same as the tax decrease approved by the county for the 2013 budget – but eventually voted for the plan with no tax increase that gave council an extra year for negotiations.

But those negotiations, which started back this fall, have run into the same wall they hit in June.

“During the summer, the tax rate played a role.  Now, the dividing line is squarely on the streetcar, and as I understand it, there is not sufficient support to keep it in or take it out of the budget,” Foxx said in his letter postponing a recent budget session. “On one hand, by my count, five members support the streetcar.  If approved, there will be substantial public opposition to it on any ballot.  On the other hand, I can at present only count five members who would support a package without the streetcar.  If such a budget passes, there will also be substantial public opposition to its removal.”

Cooksey doesn’t see a breakthrough coming between council members, especially if any anti-streetcar coalition needs seven votes to override a Foxx veto, so he’s ready to turn the issue over to voters.

Cooksey wants council to put a tax increase on the November 2013 ballot, letting voters decide if they’ll fund a capital investment plan. That’s the same ballot where council members will be up for re-election.

“We’re doing this backward,” Cooksey said. He feels council should first decide on how much of a tax increase the public could support, and over what time frame. Then, with that knowledge in hand, council could decide what projects to pay for.

Instead, Cooksey said council is arguing over what projects to approve and then finding a tax rate to pay for them.

“We are not authorized to pledge taxes to debt,” Cooksey said. “Why not just let voters decide?”

Cooksey said he’s got little traction on that plan, but plans to bring it to the table again soon. Something needs to be done in 2013, according to those on both sides of the argument, because not approving some form of investment plan could hurt the city’s credit rating by showing that Charlotte’s government is struggling to find middle ground on how to improve the city’s economic prospects.

“Our ‘fiscal cliff’ is 2014,” Cooksey said, alluding to similar taxation and spending negotiations in Washington, D.C. Council could wait until after the November elections to see if new blood could break the stalemate, but Foxx warns that would cut things close.

“Our staff has warned that, if a capital budget is not approved by 2014, our AAA bond rating will be lost,” the mayor said in his letter. “Leaving this decision to a future city council carries great risk, risk that they will be similarly frozen.”

So, Foxx will wait and see if the frost between council members breaks before forging ahead later this month. He’s aware he may find things just as icy when council reconvenes on Dec. 17.

“This decision is a hard one,” Foxx said. “The passage of time may make it easier but there is an equal risk that it will be harder – for us and the people we all represent.  We owe this community much more than a capital plan; we owe them our best effort to strike an agreement that brings this city council and our community together.”

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