Here’s a possible fun bonus of repealing the half-cent transit tax — we also repeal the car rental tax hike adopted in the great bait-and-switch of 2006. Recall that the tax hike was adopted in order to help fund the Uptown arts venues — at least that was the cover story.
In reality what happened is that CATS got another dedicated transit tax. Revenue from the General Fund — about $18 million — that used to go towards CATS was instead redirected to funding the Wachovia Arts Tower and related structures, which if you further recall, voters rejected a funding package for back in 2001 when they also rejected an Uptown arena. But I digress.
The upshot was that CATS was made whole on the cash flow side and gained a dedicated funding source with which it could secure additional debt capacity at a lower borrowing rate. This is because bond buyers regard dedicated taxes as the gold standard of government-issued debt — there is a guaranteed revenue stream behind the offering. Win-win all around, except for taxpayers who were never exactly told what was going on.
The problem was that the Jim Black gang — distracted as they were by various plots — missed the window for local bills in the General Assembly. The car rental tax hike would have to be rammed home in full view of the rest of the state as a state-wide measure. What to do? They could not hand all 100 counties the right to hike their car rental taxes too — why there was still logs to roll and political extortion to commit in order to grant the right to hike those taxes.
How could Mecklenburg and Mecklenburg alone be allowed to hike that car rental tax? Well, there was the Mecklenburg-unique legislation from 1997 which created the half-cent funding option for transit. Might that be used? Turns out it was.
The car rental tax hike amended the half-cent language and was worded in such a way that only counties that levied a dedicated sales tax for transit county-wide and passed it to the largest city in the county would qualify. That meant Charlotte-Mecklenburg.
The question is — and it is a very big question — is what would happen were voters to remove the county’s authorization to collect the sales tax. Does that mean the car rental hike also goes away? There would certainly be no county-wide sales tax for transit being collected, a seeming requirement for the car rental levy.
Ah, for clear and understandable government. Like a democracy or somethin’.
