Wednesday, July 29, 2015

The Story of TransLink Part 3 – How Metro Vancouver got a bum deal, and how we can fix it

One of the things I wondered about was why the region’s mayors didn’t just raise property tax to pay for much needed regional transportation investments in Metro Vancouver. I mean if the mayors increased property tax, we would actually be able to properly fund regional transportation in Metro Vancouver and make the Mayors’ Transportation Plan happen today.

Under the currently mandated provincial funding regime, property tax would have to be doubled to pay for the Mayors’ Transportation Plan. Using June 2015 benchmark price data for the City of Surrey and the 2015 Surrey property tax rates, out of the $3,213.81 a person would pay in property tax for the typical detached house in Surrey, $218 would go to TransLink. Similarly, a person in a townhouse would pay $1510.68 in property tax of which $102.86 would go to TransLink. An apartment owner in Surrey would typically pay $938.93 in property tax with $63.94 going to TransLink. These numbers don’t include any grants or utility fees such as water charges.

While a doubling of the property tax for TranLink is in the realm of possibility, why are the mayors so against increasing property tax for the agency? Well, as I posted over the last two days, the province promised several things that it didn’t deliver on.

First, the province promised to introduce a vehicle levy as a way to pay for regional roads, bridges, and transit in the region. Second, the province promised to pay for 60% of the cost of new rail rapid transit lines. The province broke both those promises. When it comes to funding the cost of building new rapid transit, the province now only commits to funding 33% of the cost.

It is clear that the province has an obligation to pay for its fair share in Metro Vancouver. In 2014, the province paid for about 15% to 20% of the cost to run TransLink. It paid about 30% for the BC Transit system in Victoria, and 50% for transit systems in the rest of the province. Before the creation of TransLink, the province paid for 46% of the cost of transit in Metro Vancouver.

Provincial Funding Levels for BC Transit and TransLink in 2014.

So how do we fund the Mayors’ Transportation Plan while bringing back equity for Metro Vancouver taxpayers? As a first step, the province should agree to fund 30% of TransLink’s costs in a similar fashion to how it does for the Victoria Regional Transit System. This 30% would include an adjustment for the 6 cents per liter of fuel tax that the province gave up in Metro Vancouver.

To simplify things and bring back transparency, the provincial government should reintroduce the Hospital District Levy in Metro Vancouver.

Even with these changes, there would still be about a $100 million per year gap in revenue needed to fund the Mayors’ Transportation Plan. If an annual $64 vehicle levy, indexed to inflation was introduced, the funding gap would be filled.

Metro Vancouver would finally get the transportation system we need, and some equality would be introduced back into how the province funds transit in Metro Vancouver. Also, all this could be done without the need of another wasteful referendum.

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