by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
Durham’s transit agency, GoDurham, is cutting routes and changing others as management tries to reduce a budget shortfall over the next five years. Plans for a $2.47 billion light rail system to connect Durham and Chapel Hill continue to advance. How does that happen?
The city started bus routes based on money it didn’t have and continued to operate routes with other money it didn’t have. In accounting, these are called non-operating revenues. When those funds were cut, the routes became unaffordable. In the meantime, the state has given light rail a year to raise $100 million in private contributions to unlock $190 million in state funds that would then be used to secure $1.2 billion from the federal government. It is still not clear where the rest of the $2.4 billion needed for the rail project would come or how its operations would be sustainably financed. After all, rail transit across the country loses money on fares.