Category: Government

By Kerry Lamson, Candidate for Town of Matthews Board of Commissioners

P.A.V.E. Act Overview

The Projects for Advancing Vehicle-Infrastructure Enhancements (P.A.V.E.) Act (Session Law 2025-39, HB 948) empowers Mecklenburg County to hold a 1-cent sales tax referendum to fund both transit and road improvements. Gov. Josh Stein signed it on July 1, 2025[1] [2]. If approved by voters, the tax (raising the local rate from 7.25% to 8.25%) would generate roughly $19 – 25 billion over 30 years for regional transportation[1][3]. Key provisions include: forming a new Metropolitan Public Transportation Authority (a 27‑member regional board) to govern transit projects; dedicating the sales-tax proceeds only to “public transportation and roadway systems”[4][2]; and prioritizing the proposed Red Line commuter rail (requiring at least 50% of the Red Line be completed with input from Cornelius, Davidson, and Huntersville before other rail projects proceed)[5][6]. If voters reject the referendum, the law directs CATS to prepare a long-term transit plan (including a Charlotte–Airport express link) [7]. Otherwise, the referendum question (as set by the Act) will ask voters to approve “one percent (1%) local sales and use taxes…to be used only for roadway systems and public transportation systems” [8].

Funding Mechanisms & Distribution

Figure: A Charlotte Area Transit bus. The P.A.V.E. Act’s 1¢ sales tax would fund expansions of CATS bus/light rail service and local street improvements.

• Sales tax referendum. The law authorizes the Mecklenburg County Board of Commissioners to adopt a resolution putting a 1% local sales tax increase on the November ballot. Collections would begin in 2026 if approved [8]. Household impact: e.g. a family spending $50,000/year on taxable goods would pay an extra $500/year in tax (though much of the revenue comes from visitors and commuters [9]). State fiscal notes estimate ~$19.4 billion in revenue over 30 years [1] [3] (roughly $640 million/year).
• 60% transit / 40% roads split. By law, 60% of the new tax proceeds go to the regional transit authority to finance mass transit (trains and buses), and 40% to the “eligible municipalities” for road projects [2] [4]. In practice this means Charlotte’s rail/streetcar/bus expansions vs. municipal road improvements. (Earlier drafts had proposed 40% roads/40% rail/20% buses[10][11], but the final law uses the 60/40 split [2][12].)
• Municipal allocations (40%). Forty percent of the tax proceeds are distributed monthly among Mecklenburg’s cities/towns. The law names Charlotte, Cornelius, Davidson, Huntersville, Matthews, Mint Hill and Pineville as eligible [4]. These jurisdictions receive funds via the state’s local sales-tax allocation formula (roughly based on population and other factors) [4]. For example, Charlotte would receive tens of millions annually (WFAE cites ~$102 million in year 1) and small towns millions (Cornelius ~$5.8 million in year 1[13]). The NC House Republicans estimated Matthews would get about $5.4 million per year for local road projects [14]. Municipalities may use these dollars for streets, sidewalks, bike lanes, lighting, bridges, etc., per local priorities.
• Transit authority (60%). The remaining 60% of revenue flows to a new Mecklenburg transit authority (created under the Act) to “finance, acquire, construct, operate, and maintain” public transportation[15][16]. CATS (Charlotte Area Transit System) assets would transfer to this authority. The authority’s board (27 members) is appointed by Charlotte, Mecklenburg County, the General Assembly and the Governor [17]. Legislative conditions limit use of funds: for example, no more than 2/3 of transit funds over any 30-year period may be spent on rail capital/ops[5], and at least half of the Red Line must be built (with town input)[5]. Funds must be used on transit purposes only.

Support (Potential Benefits)

• Expands transit system. Supporters argue this could transform the region’s mobility. The plan would fund new rail (Red Line commuter rail, Blue Line south to Pineville/Ballantyne, streetcar extensions) and more buses/microtransit [18] [11]. Backers like former Mayor Anthony Foxx and the Charlotte Chamber say modern transit is critical for a growing metro (over 50% growth by 2050[19]) and will attract jobs/businesses[19][20]. Expanded transit could improve access to jobs and services for transit-dependent families (60% of U.S. transit riders are people of color [21]) and reduce overcrowding on highways. Local leaders say the transit authority model is more “big-metro” style governance than today’s city-run CATS [16].
• More road and bike funding. Even towns not directly served by rail benefit. The 40% road funds mean “unprecedented” local road dollars [13] – e.g. new money for sidewalks, safety, signal upgrades and congestion relief. Charlotte Pipe CEO Hooper Hardison notes that the sales tax is paid in part by visitors and out-of-county commuters, so not all the burden falls on residents [9]. Municipal coalitions (Charlotte, towns) publicly thanked legislators for enabling “unprecedented funding for roads, transit and bus systems” [22]. Local officials also highlight that voters get a direct choice on funding: “the citizens of Mecklenburg … have a say in funding their transportation needs” [23].
• Economic growth and safety. Proponents claim the plan will reduce gridlock, making commutes faster and safer (fewer accidents)[24][20]. They argue improved mobility fosters economic vitality – supporting local business growth and workforce access[20][25]. (For example, Charlotte Area Transit says road funds would be spent on major corridors and bike/ped projects, aiding dense urban areas [13].) The added transit service would particularly help low-wage workers who rely on buses. In short, supporters frame it as a “generational investment” that future-proofs the region[26][27].

Criticisms (Potential Downsides)

• Regressive tax & cost concerns. Sales taxes disproportionately affect lower-income households, since they pay a larger share of income on taxable goods. Some residents worry about the personal economic impact: even if visitors pick up part of the bill [9], many families would see a noticeable tax increase on everyday purchases. Analysts note roughly $19–25 billion over 30 years equals about $600–700 million per year. With Mecklenburg’s population (~1.1 million), that’s on average ~$500 per person per year in tax (though actual burden varies)[28][1].
• Mandated spending split. Critics say the rigid 60/40 formula may not match changing needs. Some transit advocates lament that capping road/transit shares could force overbuilding roads or underfunding buses in the future. At a July forum, Foxx observed the law is quite “prescriptive” about how to spend the money [29]. Winston (former Charlotte mayor pro tem) quipped it’s like giving a dehydrated person a gallon of milk – “it might bring some relief, but it ain’t really what you need” (implying transit alone won’t solve all mobility issues) [30]. Others note that if traffic patterns or technology change, the fixed split could be suboptimal.
• Equity and gentrification concerns. There is skepticism in some communities about whether benefits will reach low-income and minority neighborhoods. Observers note that earlier transit projects (e.g. the Blue Line) did not equitably serve all areas [31]. Local forum attendees stressed that without careful planning the new rail expansions could raise housing costs and displace residents. Indeed, many at the July forum cautioned that extending the Blue and Gold lines might trigger “higher-priced housing and gentrification” along those corridors [32]. Critics urge pairing any rail build-out with affordable housing protections and anti-displacement policies.
• Matthews & Silver Line dispute. Matthews (an eligible town) initially opposed the referendum because the law as written provides no new rail service to Matthews[33][34]. The long-planned Silver Line East (from Uptown to Matthews) is effectively deferred; current plans call for only a bus-rapid-transit alternative [34]. Thus Matthews’s residents would pay the sales tax yet receive mainly road/bus projects. While Matthews gets its share of the 40% road funds (~$5–6 M/yr) [14], some in town feel left out of direct transit expansion. (Negotiators claim a compromise is in progress [35], but no rail guarantee is in law.) Other suburban towns fret similarly: without specific guarantees, transit projects might bypass parts of the county.
• Political and fiscal risk. Some voters distrust new taxes or fear government inefficiency. Opponents may argue that the county could use existing revenues or bonds instead, or that state funding could be reallocated. Others note that if the referendum fails, no new transit funding is likely forthcoming, leaving Mecklenburg at “square zero” on many projects [36] – a concern raised by task-force chair Harvey Gantt. There is also uncertainty in rapidly changing post-pandemic travel patterns (telework trends, fuel prices, etc.) which could alter the projected benefits.

Impact on Mecklenburg Municipalities

The P.A.V.E. Act affects each city and town in Mecklenburg differently, since road funds are shared and transit projects vary by locale. In broad terms, all municipalities will see more road funding, but only certain corridors gain new rail. Key points for major jurisdictions:

• Charlotte. The city is poised to receive the largest share of road funds (WFAE estimates ~$102 M in year 1[13]) and will control the bulk of the 60% transit pot (appointing 12 of 27 transit board members[17]). Planned expansions like the Blue Line southern extension and streetcars would focus on Charlotte neighborhoods. If approved, Charlotte officials say they will target money to congestion “hotspots,” bike/ped safety and strategic transit corridors [13]. However, Charlotte must also match or manage any associated costs (e.g. station development, increased operating budgets).
• Cornelius/Huntersville/Davidson. These northern towns regain some momentum for rail: the Red Line commuter rail (Uptown→Cornelius/Huntersville) can proceed with Norfolk Southern’s rail line purchase. They will each get modest road allotments (Cornelius ~$5.8 M first year [13], a significant boost to their budgets) and two of the 27 transit board seats. In return, residents will pay the sales tax; supporters argue that some of those revenues come from Charlotte commuters and visitors.
• Pineville. The southern Charlotte suburb is slated for the Blue Line extension, improving transit access for Pineville and Ballantyne area. Pineville will get local road funding (via the 40%) to fix streets and pedestrian projects. The influx of transit and road money could spark new development pressure; town leaders may need to manage land use changes carefully.
• Mint Hill/Cornelius (others). Smaller towns like Mint Hill, Huntersville and Cornelius (also include Davidson) will each receive their share of road funds. They have limited or no new rail projects, so most benefits are local road improvements. Mint Hill and Davidson do have transit board seats, which gives them a voice in regional transit strategy.
• Matthews (special emphasis). Matthews – a growing town on the east side – gets about $5–6 million annually for roads[14], which can fix busy corridors and improve sidewalks/bikes. But no light-rail line to Matthews is funded by P.A.V.E. The proposed Silver Line East (Uptown→airport→Matthews) has been converted to bus service under current plans [34]. Many Matthews residents wanted rail and are skeptical: the town withheld its endorsement of the referendum due to this issue [33]. The local sales tax means Matthews’s shoppers help pay for region-wide transit, even though their town will rely on buses.
• Traffic and land use: Without new rail, Matthews will likely see continued auto traffic into Charlotte. Road funding could improve local congestion (e.g. around NC-51/Hwy 74), but any long-term shift to transit is uncertain. Land-use pressures may accelerate as developer’s eye improved roads; Matthews must update zoning to manage growth.
• Housing affordability: While Matthews avoids some gentrification pressure from rail projects, housing costs county-wide may still rise. Town planners should consider policies (like affordable housing incentives) so that roadway and transit upgrades do not inadvertently price out long-time residents. Engage Mecklenburg’s equity resources to mitigate displacement.

In summary, Matthews gains road dollars but loses new rail service under P.A.V.E. Its voters must weigh the guaranteed road improvements against the absence of a promised light-rail expansion.

Voter Considerations & Guidance

Voters should evaluate the referendum by balancing cost vs. benefits for their household and community:

• Household economic impact: Calculate how much extra sales tax your family will pay. For example, each $100 of taxable spending costs an extra $1. A household spending ~$5,000/month on taxable goods would pay about $60/month more. Keep in mind partial offset: tourists and cross-state commuters also contribute [9]. Weigh this against potential time/cost savings (less gas, shorter commutes, and more transit options).
• Transit access vs. priorities: If your family relies on or would use transit (bus or rail), the 60% transit funding could mean more service, new lines, and better connectivity. Check if planned expansions serve your area (e.g. light-rail lines, expanded bus routes). If you drive almost exclusively, consider how much you value the 40% road funds: this could mean safer local streets, sidewalks, traffic relief, and bike lanes in your town. (County officials say road money goes “directly to the municipalities” for local projects [13].)
• Community growth expectations: Mecklenburg is adding ~117 people per day (projected 50% growth by 2050[19]). Ask whether current roads/transit can handle that growth. Supporters say the plan is a “generational investment” to accommodate future jobs and population [19]. Skeptics might prefer incremental fixes (widening select roads) or doubt long-term commitments. Consider whether this ballot is the region’s best current path or if other funding (federal grants, tolls, bonds) should be explored instead.
• Equity and local priorities: Reflect on how the plan serves all communities. Black and low-income neighborhoods hope for better transit and reduced traffic but are also wary of rising housing costs[31][32]. If affordable housing or roads in your neighborhood are concerns, think about how this tax interacts with other local efforts (zoning, housing programs). Importantly, note that the referendum is all-or-nothing: if voters reject it, no additional transit funds are guaranteed, and the “massive new transit plan” likely won’t happen[36][12].
• Local government trust: Consider who will allocate the money. The transit authority board will be appointed (not directly elected), so look at the governor/county/Charlotte delegation’s track record on infrastructure. Also, think about how quickly projects could be built and whether safeguards (like the Red Line priority and procurement rules) are sufficient [5].

In sum, informed voters should weigh the personal tax cost against the specific benefits: If you commute daily on I‑77 or I‑485, does the promise of expanded transit and smoother roads justify the tax? If you live in underserved areas (like many town residents), does the guaranteed road funding and future bus service offset the lack of direct rail? Review local infrastructure plans (see county transit master plan) and town budgets: the P.A.V.E. Act’s revenue could translate into millions for your city’s projects[14][13]. There are no easy answers – but understanding the trade-offs and citing these data can help every Mecklenburg household decide how this referendum will directly impact their traffic, transit, and tax bill.

Sources: North Carolina General Assembly Session Law 2025‑39 (HB 948), legislative analyses[37][5]; news coverage of P.A.V.E. Act (Axios, WFAE, WUNC, QCity, WSOC, Charlotte Observer)[1][2][38][39][40]. These clarify the Act’s provisions, funding splits, and local impacts. Tables and figures above synthesize key funding allocations and outcomes.

[1] [29] [30] [31] [36] Former U.S. transportation secretary Anthony Foxx: I’m a “yes” vote on transportation sales tax – Axios Charlotte

[2] [20] North Carolina Gov. Signs Mecklenburg County transit bill: What to know

[3] [11] [13] [16] [18] [26] [34] [38] Back to basics: What’s actually in Charlotte’s transit plan? | WFAE 90.7 – Charlotte’s NPR News Source

[4] [5] [7] [15] [17] [37]  THE P.A.V.E. ACT. | Legislative Reporting Service

[6] [8] [10] [22] Transit momentum: Newly filed bill would allow sales tax increase for transit – WSOC TV

[9] [23] [33] [35] [39] Mecklenburg County could vote on a new transit tax this year under House legislation | WUNC

[12] [28] [32] [40] Former mayor endorses Mecklenburg transit plan – QCity Metro

[14] [25] [27] Tricia Cotham’s PAVE Act – A Historic Win for Mecklenburg County!

[19] [21] another advance for Mecklenburg transit tax vote – The Charlotte Post

[24] Mecklenburg transportation tax bill advances in Senate – Axios Charlotte

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