Lenoir County Transit Faces First General Fund Subsidy as Commissioners Debate Fares, Service Model

Lenoir County commissioners discussed the future of the county’s transit system during their FY 2026-27 budget workshop, including a proposed general fund contribution for the first time.

County Manager Michael James said the transit system has historically operated as an enterprise fund, relying on grants, fares and other outside revenue. But he said rising costs and stagnant revenues have created a funding gap.

“This is the first year we’ve had to subsidize our transit operations,” James said. “Angie and her team have done a great job trying to fund everything with just the revenues, grant revenues, fare revenues over the years to do it by themselves. And it’s becoming almost impossible to do.”

James said transit is heavily reliant on outside funding sources that have not kept pace with costs.

“It is heavily reliant on outside funding to support those operations and they have been stagnant for the past 10 years,” James said. “We’ve seen costs grow from fuel and payroll and capital maintenance, but the revenue sources really have stayed about the same.”

James also said changes to Medicaid and managed care have affected ridership and revenue.

“That transition really impacted transit operations,” James said. “We had high ridership, higher revenues, and it dropped fairly quickly after COVID.”

The county estimated about 60,000 rides as of April 30, 2026. James said many of those trips are medical-related, including dialysis, while others are employment trips.

“The majority of those are all medical,” James said. “A lot of those are dialysis. And then we have employment trips that folks take to get back and forth to work.”

The proposed budget includes a general fund allocation to balance transit operations. James said staff would also pursue ways to increase revenue, including raising fares from $5 to $6, increasing shared mileage rates, seeking advertising revenue and reviewing the overall transit model.

“I did recommend that we have a general fund allocation to balance the transit budget for this year,” James said. “But to the questions that were asked, I would like for the board to entertain allowing us to raise the fares to increase revenue.”

Commissioner J. Mac Daughety said the transit system was designed to operate as an enterprise fund.

“Historically, it is an enterprise fund, which means it is generally supported by grants and user fees,” Daughety said. “I think historically in our meetings in the past and deliberations, we’ve been adamant that enterprise funds stay enterprise funds.”

Daughety said if the system cannot support itself, the county should re-examine it.

“If you’re exceeding your revenue by this amount, then maybe we need to re-examine the whole system,” Daughety said.

Commissioner Eric Rouse agreed and said the burden should not fall on taxpayers who do not use the service.

“I have no problem increasing the fare to what it needs to be to support itself,” Rouse said. “It should sustain itself. If we can’t do that, I don’t think we should put the burden on the taxpayers that aren’t using it.”

Rouse said the county should not allow transit costs to expand unchecked.

“This is how you grow government right here,” Rouse said. “This is when it gets out of control.”

James said staff is not simply asking for more money, but is preparing to rethink the service.

“This is just not a flat-out ask. We need more money,” James said. “We’re going to try our darnedest on our end to get new revenue coming in, to cut expenditures this fiscal year.”

Chair Linda Rouse Sutton said commissioners should consider the residents who depend on transit for medical care.

“My main concern in this is medical,” Sutton said. “You have so many that go to dialysis. And I’ve talked with some of the drivers and they say that they are the only people that these people see sometimes.”

Sutton said the county must look carefully at the service before making cuts.

“I think we’ve got an obligation,” Sutton said. “We’ve been fortunate that we’ve been able for ours to be an enterprise system as long as we have.”

Commissioner June Cummings said she wants the county to examine the consequences of reducing or eliminating the service.

“I would like to look at the implications of not providing the service and what it would do to hurt our citizens,” Cummings said.

James said staff will bring commissioners a more detailed plan in the coming months.

“We’ll come back to you in the next few months with a scheduled timeline on the public hearings to raise these rates and adjust these fares,” James said.

Commissioners are scheduled to meet again Monday, June 1, at 9 a.m. in the Commissioner’s Chambers on the second floor of the Lenoir County Administration Building, 101 N. Queen St. in Kinston. The board is expected to continue budget discussions ahead of the June 15 meeting.