A budget boost for CATS
Operating costs have surged, while ridership is down
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CATS carries fewer riders than a decade ago — but its costs keep rising
by Steve Harrison
WFAE
The city of Charlotte’s proposed budget for the upcoming fiscal year includes a sizable increase in funding for the Charlotte Area Transit System, reflecting continuous investment even as ridership remains significantly lower than peak levels a decade ago.
In fiscal year 2014, CATS ridership peaked at 29.5 million passenger trips. The transit system’s operating budget that year was $110 million.
Simple math shows that translates to a cost of $3.70 in operating funds spent for each passenger trip.
For fiscal year 2025, CATS ridership is expected to be around 16.5 million passenger trips. The city has proposed that CATS’ operating budget be $261 million.
That translates to a cost of nearly $16 for each passenger trip — a more than four-fold increase.
In other words, while ridership is down roughly 50% from a little more than a decade ago, the transit system’s operating budget is proposed to more than double over that same time, growing by about 140%.
CATS isn’t the only city agency to see big increases. During that same time, the city’s general fund — which pays for things like police, fire, roads and garbage collection — has increased by about 80%. That increase is mostly because of inflation and increasing the pay of city workers. It’s also because the city has added more residents.
For example, City Manager Marcus Jones said this week that the city’s lowest-paid hourly workers have seen their pay climb in the last eight years from about $13 an hour to a proposed $23 an hour under his fiscal 2025 budget.
CATS is mostly funded by a half-cent sales tax for transit.
The amount of money that tax brings in has surged, from $108 million in fiscal year 2019 to an expected $165 million for the fiscal year that ends next month. The rest mostly comes from the federal government and the city. A small portion comes from the fares riders pay.
In the last decade, the CATS budget has increased in part due to the cost of running the Lynx Blue Line extension, which opened in 2018, as well as the Gold Line streetcar extension, which opened in 2021.
In the proposed budget, the city noted that CATS is slated to receive nearly 15% more than it does in the current fiscal year, which ends in June.
The city said that money “includes focused investments in safety and security, and in vehicle maintenance and repair.”
In some ways, CATS is running harder just to keep up. Interim CATS chief executive Brent Cagle has been working to solve a backlog of deferred maintenance on Lynx Blue Line trains. The problem was so severe that the state criticized CATS for skipping required maintenance, and it has imposed a 35 mph speed limit on all Lynx trains.
Cagle inherited that problem from former CATS chief executive John Lewis.
Another reason for the increase in costs is the city agreed to a new contract in early 2023 with its bus drivers, who had threatened to strike unless they received higher pay and other benefits.
CATS bus drivers work for a private management company, an arrangement that allows their union to collectively bargain.
The city budget says CATS “personnel services” are expected to increase from $113 million this year to nearly $152 million for the upcoming fiscal year.
An improving picture at CATS?
In its budget book, the city said the transit system’s customer service is improving, and officials have said the number of missed trips for buses is down.
Charlotte said:
A focus on employee investments has resulted in improved retention and recruitment efforts within CATS. New security contracts, enhanced pay, and improved and new communication tools have helped cut vacancy rates in half over the previous fiscal year. Streamlined routes and investments in operations and personnel are yielding positive results.
It said that while “total ridership has not yet returned to pre-pandemic levels, it has increased by 50% on bus operations and more than doubled on rail operations since return to work.”
The city, however, appears to be overstating improvements in ridership.
CATS has defined “return to work” as the spring of 2022.
Transit Time reviewed ridership data CATS sends to the Federal Transit Administration monthly.
Those reports show that in the winter of 2021-2022 (December, January, February), CATS buses carried 1.94 million passengers. During the winter of 2023-2024, CATS buses carried 2.13 million passengers.
That’s an increase, certainly — a sign that people are slowly coming back to transit. But it’s a 10% increase in riders over two years — not a 50% increase.
CATS was closer to the mark with rail ridership.
The Lynx Blue Line and streetcar carried 899,000 passengers in the winter of 2021-2022. For the most recent winter, the two rail lines carried 1.41 million passengers.
That’s a nearly 60% increase — but not a doubling as CATS has claimed.
And now, for a little wonkery…
Transit Time asked CATS how the agency found that bus ridership has increased by 50%.
The transit system said it compared ridership data from October 2023 with January 2022.
The transit system has two ways of counting bus riders. One is using the “farebox” count which tallies how many people pay. The other is random sampling, which is what CATS reports to the federal government. The random sampling — which is what Transit Time usually relies on — typically shows higher bus ridership.
In doing its analysis, it appears CATS compared farebox numbers from those two months.
One problem with that analysis is that it’s a best practice to compare the same months or time periods, such as comparing October 2023 with October 2022, or spring of 2023 to spring of 2022, to account for season fluctuations in riders.
But the bigger problem is that CATS told elected officials in a memo last year that it believed the farebox data in the months around 2022 was too low and that it was looking to correct the problem.
It wrote:
During a review of the November and December 2022 farebox ridership data, an unexpected decline in ridership was discovered when compared to the year prior. CATS, in coordination with the farebox vendor, was able to recover the data. However, when comparing the farebox and APC bus ridership data over the past few years, the gap between the two sources has increased.
But when it came time to do an analysis showing ridership was increasing, it appears CATS turned to that same data point it had previously said was likely incorrect. And when you start off with a data point that’s too low, it’s easy to show a surge in ridership.
Will the ‘tail wag the dog’ on CATS’ budget?
There’s still one outstanding wrinkle in the CATS budget. Even though the agency is city-run and reports up to Charlotte’s city manager, there’s also the Metropolitan Transit Commission — a governing body made up of Mecklenburg mayors and the Mecklenburg Commission that shares oversight of CATS.
The MTC has been negotiating with the city of Charlotte about getting more power over the transit system’s operations. Last month, the MTC declined to take a vote on the budget, deferring it while negotiations are ongoing.
Cagle was optimistic at a committee meeting this week that the MTC will agree to a budget before the city finalizes its budget plans next month. Charlotte City Council member Malcolm Graham, however, warned that the situation risks a “tail wagging the dog” dynamic, with the smaller Mecklenburg towns getting more control vs. the larger city.
Steve Harrison is a reporter with WFAE, Charlotte’s NPR news source. Reach him at sharrison@wfae.com.
Listen 🎧: Discussion on the proposed I-77 toll lanes south of uptown
An episode of WFAE’s “Charlotte Talks With Mike Collins” this week focused on the proposed I-77 expansion between uptown and the South Carolina line. It featured NCDOT’s Brett Canipe, state Sen. Vickie Sawyer and WFAE’s Steve Harrison.
You can listen here:
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