Proposed North Carolina budget rule could make Charlotte-area governments repay I-77 South design costs if support is rescinded

A proposed change in North Carolina’s 2026 budget would create a “repayment if support is rescinded” mechanism for certain statewide transportation projects. For the I-77 South express-lanes effort, it could require Charlotte-area governments that vote to remove support after predevelopment begins to reimburse the N.C. Department of Transportation (NCDOT) for preliminary design work—unless they reinstate support within a 90-day window.

What the proposed budget provision would do

Section 43.27 would amend state law to create a “repayment if support is rescinded” mechanism. After predevelopment activities start, if an MPO takes unilateral action to remove a statewide project from its Metropolitan Transportation Improvement Program (MTIP), or to prevent the project from being delivered or funded in the manner originally programmed, and if the Board of Transportation approves the removal or cancellation, then local governments that voted in favor of that action would reimburse NCDOT for preliminary costs incurred before removal.

The bill language defines “unilateral action” as an action not required by federal law, a court order, or a formal written direction from NCDOT. It also defines “preliminary costs” to include preliminary engineering, environmental studies, consultant fees, labor, and other project-related expenditures incurred prior to removal.

What costs and how the amount would be calculated

Reimbursement would be tied to preliminary work done before the project is pulled. The language also builds in proportionality: a local government would be responsible for costs in proportion to its weighted voting percentage within the MPO that voted to remove the project or prevent it from moving forward.

Once NCDOT (the Department) determines a removal constitutes unilateral action, it would provide written notice to the local government that voted to remove the project and specify the amount subject to reimbursement. Until the local government is fully reimbursed, the department would withhold certain state aid and would not begin new STIP projects, including predevelopment activities, within that local government’s boundary.

Why a CRTPO vote timing could matter in Charlotte

The dispute is centered on the Charlotte Regional Transportation Planning Organization (CRTPO). The proposed budget language points to a May 20, 2026 CRTPO board vote to rescind an October 16, 2024 resolution authorizing a P3 delivery process for the I-77 South project. That action came after earlier local rescissions, including a Charlotte City Council vote on May 11 to rescind local support.

Section 43.27 also adds a specific escape hatch for Charlotte-area partners. It says that a local government that voted at the May 20, 2026 CRTPO board meeting to rescind the October 16, 2024 resolution would not be required to reimburse NCDOT if, within 90 days of the provision’s effective date, that local government votes to reinstate the October 16, 2024 resolution at a CRTPO board meeting held after the effective date.

Where supporters and opponents disagree

Supporters frame the proposal as a transparency and consequences measure. Reporting on the amendment describes it as a way to inform local governments about potential impacts if they withdraw support, and notes the punitive provision is tied to a broader budget agreement.

Opponents argue the mechanism effectively penalizes local decision-makers for participating in transportation planning. They also warn it could chill local governments from exercising democratic authority in future planning disputes by threatening to withhold future state and federal transportation funding until repayment is made.

What residents should watch next

For Charlotte residents and businesses, the main “watch items” are timeline and procedure:

• Budget status: WBTV reported the budget amendment is not official yet and still needs approval in the House and Senate before it goes to Gov. Josh Stein.
• The 90-day reinstatement window: if the provision becomes law, the clock starts on its effective date, and the key question is whether the CRTPO partners reinstate the October 16, 2024 resolution at a CRTPO meeting held after the effective date—within 90 days.
• Any NCDOT reimbursement notice: if reimbursement is pursued, NCDOT would determine whether a removal is “unilateral” and then issue written notice specifying the amount subject to reimbursement.
• Effective-date detail: the bill text says the subsection providing the 90-day escape is effective when it becomes law, with the remainder retroactive to January 1, 2026.

Even if the project’s future is still being debated, this proposed budget mechanism underscores that local votes could carry financial consequences tied to work already done.

Sources

• North Carolina General Assembly — Senate Bill 257 (2026 Appropriations Act) text, Section 43.27
• WBTV — Proposed state budget repayment plan for I-77 South
• The Charlotte Post — Opposition to the I-77 South toll refund/reimbursement idea grows
• NCDOT — I-77 South Express Lanes project page
• Charlotte Business Journal — I-77 toll fight reignites as a NC senator seeks $60M back

Look for updates to this story

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