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I made a mistake in calculating the interest cost.  Over 30 years the cost of the interest, payable every six months, would be $1,200.  Added to the principal of the bond, the total cost would be $2,200 for every $1,000 bond issued. I made the mistake of compounding the interest as it it was to be paid upon maturity.    The sales tax is used to service the sales tax revenue bonds that are issued to acquire the capital to pay for the construction of the system.  I have not looked at the construction scheme in Charlotte, but this is the way it usually works.  If Charlotte built the system on a pay as they go basis, it is very unusual.The transit authority usually gets the construction money by issuing tax free municipal bonds, just like the ones that were issued to finance the construction of most of the country's airports.  The amount of bonds issued would be the difference between the estimated cost of the project and the amount of monies anticipated from federal and state authorities.  Even if Charlotte was able to build the system on a pay as they go basis, they would not, in all probability, have received the federal and state monies until the project was complete, although they might have gotten percentage of completion payments.  In this case, they would have had to borrow working capital for the on-going costs of the project, and this cost would be capitalized.  If Charlotte collected the sales tax necessary to pay for its portion of the light rail system before construction began, it would have had to collect it for years.  In 2007 Dallas Area Rapid Transit (DART) collected approximately $389.9 million in sales taxes from its participating communities.  Dallas and its surrounds are considerably larger than Charlotte.  The Dallas / Fort Worth metropolitan area has a population of approximately 6.3 million compared to the Charlotte metropolitan area population of approximately 1.5 million.  The cost of the Charlotte starter light rail system, according to the numbers provided, was $462.7 million.  DART collects a one per cent sales tax in its service communities, whereas CATS collects one half of one per cent sales tax in its service area.  If the Charlotte economy was as big as the Dallas Metroplex, it would have collected $195 million per year.  But since it is considerably smaller, the take was probably correspondingly smaller.  If the sales tax revenues for Charlotte were on a par with the Dallas Metroplex, it would have had to collect and save the tax for 2.4 years before it began construction of the light rail line.  In addition, it would have had to collect some money to cover the operating costs during the first year.  In addition, because it plans to open another 11 mile line in 2010, it needs to come up with another $530.2 million, assuming the same construction costs per mile as the starter line, to build it.  This means that it had to squirrel away the money before construction on the starter line began or was completed.  Again, at the rates shown for Charlotte, this would have taken another 2.72 years.  And all of this would have had to occur while a portion of the sales tax was used to pay existing operating costs on the light rail line and the bus system.  Unfortunately, CATS does not make its financial statements readily available.  I have asked for them.  It will be interesting if they will make them available to a Texan.  They should show whether CATS issued any sale tax revenue bonds.
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