Can Orange County afford light rail? – Bonnie Hauser

Last December, when GoTriangle wanted more money for the Durham-Orange Light Rail Transit (DOLRT) project, the Orange County commissioners hired Davenport & Co. to review the entire financial plan. Davenport’s work revealed new costs and unexpected risks for our transit future.

Estimated costs now exceed $3.3 billion and the local portion (shared by Durham and Orange) exceeds $1.9 billion (55 percent of the project). The numbers are still in flux, but if Durham County agrees to pay a bigger share, Orange County’s bill ends up around $325 million, more than double GoTriangle’s estimate in 2012.

The increase is mostly due to cuts in state funding and a new financing plan that adds nearly $1 billion in debt that we’ll be paying for the next 45 years. Now financing and credit risks add to the many uncertainties facing the project. For taxpayers, it means that their transit monies will go toward interest payments rather than expanding public transportation, and that our children and grandchildren will be paying for light rail for decades.

Davenport's report shows that Durham can afford the project. Durham is growing quickly, and the sales tax revenues appear more than sufficient to cover the costs of light rail. Plus it is expecting hefty growth in property tax revenues from new, high-priced development along the light-rail corridor.

For Orange County, the risks are higher. Our projected sales tax revenues barely cover our share of the costs, and cash reserves are perilously close to impinging on the county’s general fund (our property taxes).

The sales tax projections are key. That’s how we’re supposed to pay the bills (and loans). GoTriangle’s model projects our sales taxes to increase by 3 percent to 6 percent per year for 45 years. That’s pretty high for a community that grows 1 percent to 2 percent a year and spends a lot of money in Durham. In 2009, 2015 and 2016, Orange County’s sales taxes declined. Davenport is taking a closer look. If they revise the forecasts, the cash flows will go negative.

The benefits are dwindling too. Promised bus hours have been cut. Plus there’s not enough money for the bus rapid transit corridor on MLK Boulevard. Planned bus services don’t begin to reach into communities where public transportation could make a difference.

Don’t forget – light rail doesn’t go to the airport or RTP, or to any of Orange County’s downtown centers or planned growth areas. It connects UNC Hospitals with downtown Durham and NCCU. Commuters from Meadowmont and Durham’s luxury housing will enjoy new high-speed services, while working and low-income families, seniors, and other transit-dependent communities be left with infrequent buses, poor weekend service and cumbersome connections. After spending over $3.3 billion on transit, most of us will still need cars.

Orange County leaders have a difficult choice: fund light rail – or – fund expanded transportation services that reach into our communities. We cannot afford both unless leaders are prepared to increase our already high property taxes.

There are other factors at play. The Trump budget has cut funding for new light-rail projects, and state funds could come up short. Plus the state legislature continues to pressure our schools, health care and essential services. Now they are toying with cuts to impact fees and sales taxes.

Orange County leaders took an important step when they hired Davenport to look at the financials behind GoTriangle’s transit plan. The funding outlook is bleak and the risks are daunting. Now our commissioners must decide whether to step back from light rail, shore up the finances and take a serious look at alternatives, or to put millions of more taxpayer dollars at risk.

It would help if they heard from you. Please write to your county commissioners at OCBoCC@OrangeCountyNC.gov and attend the public hearing on Tuesday, April 18.

Bonnie Hauser is a retired partner of PricewaterhouseCoopers, a member of the Smart Transit Coalition and a leader with Orange County Voice. She can be reached at bahauser@aol.com

What’s next

Light Rail Hearings with Orange County Board of County Commissioners, 7 p.m. Tuesday, April 18, Southern Human Services Center 2501 Homestead Road, Chapel Hill (behind the Seymour Center)