We Have No Money

Yesterday I touched on the sticky financial situation Translink will find itself in over the next few years. According to the CBC by 2012, Translink will need an extra $150 million annually to fund existing services and another $150 million for expansions. Where will that money come from?

It should be noted that we are talking about operating expenses and not capital projects. The federal gas tax can only be used for capital projects, and one-off provincial funding is usually only for capital improvements. BTW, Translink would be required to come up with some $2.75 billion and $500 million from our local governments to fund the Province’s transit plan. This would result in more property tax. I don't see that happening, and I don’t see how Translink could come up with that kind of money without going into more debt. Anyway...

Right now Translink gets revenue from the following sources:

Fares – 39%
Fuel Tax – 29%
Property Tax - 29%
Parking Sales Tax - 1%
Hydro Levy – 2%

It would seem that in the current political climate, we will not see a major hike in any of these revenue streams. So, we most look to other sources of funding.

Translink Real Estate
According a March 19 article in the Vancouver Sun, Translink expects to take in $30 million to $150 million from their new real estate venture.

Tolling
Tolling bridges in Metro Vancouver has been talked about since before Transport 2021 in the early 1990’s. Bridge tolling is nothing new (it will be done on the Golden Ears Bridge and on the potential new Port Mann Bridge). Bridge tolling would provide a dual benefited. If done right, it would help reduce congestion and help funding Translink.

Debt Reduction
In 2007, Translink spent $126.5 million on servicing its $1.6 billion in debt. If other orders of government were to provide a one-off payment to help Translink reduce that debt load, it would free up money to fund improved transportation. For example if Translink's debt was paid off, combine with their Real Estate division, Translink could be in the black.

Federal Funding
Translink does not get any operational funding from the provincial or federal government. On June 26th, the US House passed a bill to provide funding to help with both capital and operational costs for transit systems in America. Maybe it’s time for the Canadian Federal Government to step up and provide operating funding to our transit systems. Barring that, the provincial government could also provide funding to cover Translink’s shortfall.

Service Reduction
This is not an option.

At the end of the day it will take a combination of funding source (old and new) to “save” Translink.

According to an article today’s Province titled Surrey report tosses Translink plans in the trash:

Without new funding, he said, the options available to TransLink are to raise fares or property taxes, or cut service.

Surrey Mayor Dianne Watts wants to discuss the looming funding shortfall with Transportation Minister Kevin Falcon.

She expects that meeting, which was recommended by the council of mayors on transportation, to be held this week or early next week.

Well at least we'll get a new Highway 1.