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Budget language a blow for Chapel Hill-to-Durham rail project

Posted May 28, 2018 9:59 p.m. EDT
Updated May 29, 2018 7:17 p.m. EDT

— New state budget language holds back more than $200 million in funding for the planned Chapel Hill-to-Durham passenger rail project until federal money is promised, a potential road block for the $2.4 billion plan.

The new language may set up a chicken-or-the-egg situation: The General Assembly now says no state money without federal guarantees, but federal funding requires a 50 percent match, and the state money has been been counted on.

"We are assessing next steps, but the amended budget certainly appears to be detrimental to the light-rail project," GoTriangle General Manager Jeff Mann said in a statement late Monday, after the state budget became public.

This project is slated to run about 18 miles from Chapel Hill to Durham, connecting UNC Hospitals to North Carolina Central University and points in between, including the University of North Carolina at Chapel Hill and Duke University. Durham and Orange counties have already spent some $88 million planning the line and funding the environmental studies needed to get this far in the federal application process.

The plan has been to pull down some $1.2 billion from the federal government, with state and local taxpayers, along with private donors, covering the rest. The legislature has previously capped the state's contribution at 10 percent of construction costs.

The new budget language released Monday night as part of the state's new $23.9 billion budget singles out light rail projects, requiring a written agreement establishing that all non-state money needed for construction "has been secured."

This budget is expected to pass this week, and the procedures used by the Republican legislative majority to bring it to the floor preclude changes at this point.

A legislative source involved in budget negotiations questioned whether the change would significantly alter the project's chances, saying it has previously struggled to score well under the federal formula used to decide grants.

The project won a "medium" rating from the federal government last year, the minimum score needed to move into the engineering phase, The Durham Herald Sun reported at the time. Part of this score was based on local and state funding commitments, the newspaper reported.

In addition to the $2.48 billion price tag, the line would cost about $29 million a year to operate, according to GoTriangle. In March, The Durham Herald Sun put construction costs at $3.3 billion, including interest costs from loans.