Yesterday, I set the stage for the transit funding pickle that we find ourselves in today. Briefly, the province didn’t want to increase funding for transit in Metro Vancouver while the region was looking to expand our dismissal transit service to support creating a livable region.
A regional vehicle levy was supposed to have been introduced by the province to provide the required funding needed to expand not only transit, but also pay for the maintenance of regional roads and bridges. No new property tax and no new gas tax would be needed. Of course the province, both the BC NDP and Liberals, reneged on the commitment made to introduce a regional vehicle levy.
While the province got what it wanted, getting out of paying for the operation of transit in Metro Vancouver, the region did not. What Metro Vancouver taxpayers got was a bum deal.
With the exception of Victoria, the provincial government pays around 50% of the cost for transit service in BC. If you live in Abbotsford, Chilliwack, Kelowna, or Kamloops, the provincial government writes a big fat cheque for around 50% of the cost to operation transit. The remaining 50% is made up from property tax and fares.
In Victoria, the situation is a bit different. The provincial government pays for 30% of the cost of transit. The remaining 70% is made up from a local 3.5 cent gas tax, property tax, and fares.
Back in 1998, the year before the creation of TransLink, the provincial government paid for 46% of the cost of transit in Metro Vancouver. That works out to $357 million in today’s dollars. The province paid for 35% of the cost of the Victoria Regional Transit System that same year, $24 million in today’s dollars. There was a local gas tax in Victoria and Vancouver to help pay for transit.
The reason why the province paid for a higher percentage of the cost of transit in Metro Vancouver was due to the SkyTrain and the West Coast Express systems.
When the province made the deal with local governments in our region to create TransLink, the province agreed to eliminating the hospital property tax, increasing the local share of gas tax, and continuing to pay for SkyTrain debt. They also agreed to pay for 60% of the capital cost of new rapid transit lines.
While this might have sounded like a good deal at the time, the BC government broke its promises to the region, and Metro Vancouver taxpayers suffered.
What would it look like if transit in Metro Vancouver was funding the same way that the Victoria Regional Transit System is funded today? In 2014, the BC government would have had to pay $428 million into TransLink.
For comparison, the following graphs show what the BC government is actually contributing to transit in Metro Vancouver, and what it would have contributed if we had the same deal as Victoria. I’m not even suggesting that we get 50% of our transit service paid for like the rest of the province.
As a note, the hospital property tax varies greatly throughout the province and year-to-year. In the Interior, it worked out to $46.84 per capita in 2014. It was $29.98 in Northern BC and $25.21 on Vancouver Island per capita in 2014. I’ve created a high hospital tax and a low hospital tax version of graphs that show the provincial funding gap in transit. I’ve also included lost fuel tax revenue that the province gave up to TransLink, the old Expo and West Coast Express debt, plus the Millennium debt, and Canada Line operation costs which the province pays for.
|The 2014 Provincial Transit Funding Gap with $25 per capita Hospital Tax In Millions. Select graph to enlarge.|
|The 2014 Provincial Transit Funding Gap with $50 per capita Hospital Tax In Millions. Select graph to enlarge.|
As you can see, there was a $137 million to $199 million gap between the 30% ideal and what the province paid into TransLink in 2014. The province is actually paying less for Metro Vancouver transit today than it did in 1998!
It is interesting that Metro Vancouver, home to 50% of the people in BC, gets the worst transit deal in the province.
While there is no Plan B for transit in Metro Vancouver, tomorrow I will post about a possible Plan B.