$70 million payback for I-77 South project could set new precedent: ‘Chilling effect’
With just weeks before the Charlotte Regional Transportation Planning Organization decides on the Interstate 77 South toll lanes project, a financial penalty of nearly $70 million could not only be the deciding factor, but set a precedent for future regional decisions.
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The vote will be the second time this year the planning board will decide on if it will back the controversial, $4.3 billion project. It comes after the Republican-controlled General Assembly included a provision in the state budget that will require local governments to repay the state for money spent designing the project if it dies.
That move has pushed several towns to change their stance based on the financial penalty instead of the merits of the project. The provision has also sparked concern in several local officials of the far-reaching implications it could have, including Mecklenburg County Commissioner Leigh Altman and Matthews Town Attorney Daniel Peterson.
“This is not a Mecklenburg issue, this is not even just a state issue, this is a national issue,” Peterson said at an August town meeting. “Whether one agrees with the I-77 toll lanes project as proposed or not, this style of legislation should have no place in our state or our country.”
According to documents provided to the Observer, CRTPO governments who vote to oppose the project will be expected to repay the state $69.5 million on a proportional basis if the project dies.
That penalty would weigh harder on smaller towns like Matthews, who has a budget of around $47 million, than Charlotte, with a budget of around $4.5 billion. Charlotte, who carries the most votes on CRTPO, could be forced to repay upwards of $30 million by itself. But the final amount will depend on how many municipalities reverse their rescission vote.
And In addition to the payback costs comes the risk for municipalities of other state-funded road projects being delayed.
Earlier this year, Peterson put out a memo calling into question the legality of a forced payback plan by the state.
Peterson did not respond to a request for comment. But Town spokeswoman Maureen Ryan said Matthews continues “to have concerns about the language included in the state budget.”
“Matthews has never supported the I-77 South toll lanes project, and we do not believe Matthews or any municipality should face financial penalties for carrying out its role in the regional transportation process,” she said.
The concern that the provision could have consequences that go beyond just a decision about expanding I-77 between uptown and the state line is a sentiment shared by others.
The language in the state budget could instill fear in local governments of similar actions by state officials in the future, said Mary Maclean Asbill, director of the North Carolina offices at the Southern Environmental Law Center.
“If local governments feel that raising questions about a project or making edits or tweaks to a local project is going to risk severe financial liability for them, they’re going to be extremely reluctant to think big or act big,” Asbill said.
At the heart of the issue is in part a timeline in how the project was rolled out. The idea of express lanes on I-77 started nearly two decades with the fast lanes study, but officials chose to focus on the north first.
CRTPO approved a funding mechanism for the I-77 South toll lanes project in 2024. But public outcry didn’t reach a fever pitch until late last year when design maps were released that showed homes would be impacted.
“Having this sort of punitive provision in the budget makes it so that it’s harder for regions to be nimble and respond to changes,” said Megan Kimball, a senior attorney with SELC, “That will ultimately lead to worse results for the region.”
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In May, a groundswell of opposition spearheaded by neighborhood leaders and advocates pushed the regional transportation board to kill the project. Residents, local advocates, and officials have all acknowledged something needs to be done on the major thoroughfare. But they have called for more time for an independent analysis that could study alternatives.
Kimball said the state legislature is now effectively punishing a metropolitan planning organization for exercising its authority to plan transportation networks at a regional level.
“It could have a chilling effect on their ability to adapt to a changing world,” she said. “Transportation projects often are in the pipeline for a long time.”
Some local officials have also questioned Gov. Josh Stein’s lack of involvement. Stein, who signed the budget into law with the provision, has been critical of the state legislature’s actions but largely absent in the discussions publicly.
“It was wrongheaded and punitive for the General Assembly to follow through on their threats against Charlotte,” a spokesperson for Stein’s office said in a statement to the Observer. “Governor Stein believes decisions about infrastructure and road safety in one of our state’s fastest-growing cities should be locally driven and collaborative.”
Scott Mooneyham, with the NC League of Municipalities, said he hasn’t heard a concern about a precedent being set from municipalities outside the Charlotte area. But there’s always some level of friction between state and local governments, he added.
“It’s just unfortunate that the legislature would take this step and that the parties couldn’t come to some kind of reconciliation,” Mooneyham said.
The tension commonly seen between the state legislature and municipalities goes back to the state’s colonial days, according to Michael Bitzer, a professor at Catawba College and the director of the school’s Center for North Carolina Politics & Public Service.
“The legislature always took exception to strong power by a non-legislative body, and that has shaped the way that state government, and particularly local government in this state, has had its relationship,” Bitzer said.
It’s created a delicate balancing act with the state for municipalities as they try to assert their own authority. And in this case, the tension between the two is heightened between the Republican-controlled state legislature and Democrat-controlled Mecklenburg County.
“As one party has very much solidified its power over the legislature, the opposite party has come to control the county of Mecklenburg,” Bitzer said. “The two perspectives are going to be at odds with each other.”
Brushups between Mecklenburg County and the state legislature in particular aren’t uncommon. Just last decade state officials attempted to wrest control of Charlotte’s airport from the city. It’s a move some CRTPO officials pointed to in an unsuccessful attempt to caution the regional board from rescinding support for the I-77 South toll lanes project earlier this year.
Similarly, the state budget’s provision could leave a lasting impression, according to Bitzer.
“I think that whenever somebody’s hand gets slapped, that hurt feelings are going to last for a while,” he said. “Probably until the next round of local officials come into office, and then they get their own experience at the ruler across the wrist.”
North Carolina Department of Transportation Secretary Daniel Johnson said in a July letter that state officials will wait for the vote by CRTPO in September before removing the project from the State Transportation Improvement Plan.
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