The light-rail line that would connect Durham with the UNC Hospitals complex has been under discussion since the 1990s.
Those involved from the beginning will recall that the dream of rail transit for the Triangle rested on several assumptions: use of existing rail tracks as a low cost way to connect Durham and Raleigh, a low-inflation, low-interest rate environment, the desire to cluster low- and moderate-income housing around stations, use of cutting- edge technology, and the example of Charlotte as a model both for successful transit and for a wave of new, tax-paying development.
Most of all, it was assumed that local government would have to contribute only 25 percent of the total cost, with the rest coming from the federal and state government.
All of these assumptions have evaporated.
The existing rail tracks have been proven unavailable, and Wake County has pulled out of the system entirely, leaving a vestigial route connecting Durham with the UNC Hospitals complex. Many of the sites for low-income housing have already been developed for high-end apartment complexes targeted to the luxury market. Rapid development in the transportation sector have made the initial technological choices for the system seem outdated, even quaint. Charlotte’s transit system (as many other transit systems in the U.S.) has experienced a continued decline in ridership. Even the Charlotte LYNX light-rail system has been trending flat since its introduction a decade ago. And the banking bust has revealed how dependent station-area development was on a one-time, unsustainable boom.
The biggest change has been financial. The total cost of the system now stands at $2.5 billion – and like many mega-projects, we believe it will actually be much higher. The biggest blow has been the state legislature’s decision to cap its maximum contribution at 10 percent, throwing a full 40 percent of the system’s cost onto local governments.
As a consequence, the contribution from local funds has increased from $345 million to $1 billion. Of this, 23 percent would come from Orange County tax payers. In addition, if the federal government decides to fund the project, it will only do so under rather unfavorable financial conditions.
How has GoTriangle responded? By increasing sales tax revenue projections to unrealistic growth levels and adding close to $1 billion of debt. For example, GoTriangle assumes an annual 4 percent sales tax increase over the next 40 years. Over that time span it is expected to have roughly five economic downturns, with flat or declining sales tax revenues lasting a year or more. This makes the sales-tax projections grossly inflated, and therefore in reality more debt will have to be covered by Orange County. These are only capital costs – once the system is up and running we’ll face annual operating deficits as well.
We are worried about the financial implications, but even more about the social justice impacts. The federal government might use light rail funding as leverage for the Trump administration’s immigration policy and force local authorities in Chapel Hill, Durham and other towns to cooperate with deportation policies. Hopefully this is unlikely, but we don’t know what to expect in the current political climate.
Moreover, Orange County will risk cuts to important social services and increase property taxes. Who will benefit from the light rail in Orange County to justify the expense? Poor and moderate income people won’t be able to afford living close to the planned stations. What about the elderly and disabled who cannot walk the assumed half mile to stations? What about rural residents, who are not served at all? So, we still need to pay for an extensive – and hopefully improved – bus system. Who will pay for this?
Ten years ago there were a lot of arguments in favor of light rail – if it all had gone according to plan. Today, the price tag is unjustified from an economic and social point of view. It is a luxury we can no longer afford.
Eric Ghysels is a professor of economics at UNC and Robert Healy is a professor emeritus of environmental sciences and policy at Duke.