Tuesday, January 17, 2012

LRT Funding

There is a process of public consultation around how the LRT might be funded.  People need to think about this clearly and what this whole process means.  

What it clearly means:
Building the LRT will not increase transit use enough to cover the increased costs of operating the system.

There is something wrong if you increase your capacity but get no cost savings from it.   Seeking to get more money from non-users is a problem as we only have so much that can be raised in taxation.

What needs to be asked and no is asking is "What are we trying to achieve with our transit system and what is the best way to do this?"

As it stands at the moment, vehicle users in BC pay more in fees and taxes to cover all of the costs of the provincial and local governments related to roads and transit.   The road system in BC is not only 100% user pay, it makes enough extra money to cover the costs of transit in BC.

Options under consideration:

User Pay Options

  • Higher fares - the easiest to do and the one that puts the burden on the users.  If we are to have an LRT, I support this is a the primary source of funding.   It will not impact me because my transit use will drop to almost zero after the LRT is built - I lose all the direct buses running to downtown and would have a longer trip with the LRT
  • Station rents - revenue from renting out space at stations.   There is very limited opportunity for this on the line - maybe at Six Mile and Station Ave.  You would be looking at a small amount of income, though I support this as an approach.
  • Sell station air rights - not sure how this will work as it could mean one of two different things.   I need to know more commenting.
  • Advertising - BC Transit already has advertising, I fail to see how they will collect more from the LRT.

Property/Household Based Options

  • Higher property taxes - BC Transit has been raising property taxes well beyond the rate of inflation for a number of years now, an extra increase due to the LRT is not on.   Property taxes are high enough in this region to have an impact on business viability and on housing affordability
  • Higher vehicle registration fees - I am not sure the region can collect one at the moment.   This tax would hit non transit users hardest and as a flat fee would hit poorer people harder than the well off.  The bottom 20% may no own a car, by the next 20% due and they are barely making ends meet.
  • Utility levy - this is a round about property tax  increase.
  • Development cost charges - an extra fee on building new developments will slow the construction of housing and commercial space in the region.   It gives you some money up front but depresses increases in total taxable properties values in the region.   It will harm the budgets of local governments.
  • Land value capture - this is based on the theory that land values will increase from rapid transit.  The co-relation for large scale systems like SkyTrain are weak and for small systems like the one proposed here are non-existent.   I do not know how you would measure this and apply it fairly.  It would also discourage development in the areas close to the line, the exact opposite of what is wanted.

Options needing a change of Provincial laws

  • Increase local sales tax - this means getting the provincial government to allow the CRD to levy a sales tax.   The province would also have to collect it.   With the return of the PST and the significant harm it will do to retail sales, adding another few points on top of that will make retailers scream.  Think of the reaction to the HST, which was an improvement in consumption taxation and a benefit to the majority
  • Take a portion of the Carbon Tax - this means getting BC to agree to give it to local government.  If we get it here, all local governments will want their share.  This would create a $1,000,000,000 hole in the provincial budget.
  • Road tolls - not only will this be wildly unpopular, it needs the province to enact.  How would you collect it?  Something like the Golden Ears Bridge?
  • Vehicle-km tax - you are charged based on how far you drive.   The province would have to enact and it would mean if you take a long trip outside of the CRD you would pay more in the CRD for the LRT.

Higher costs on road users

  • Increase fuel taxes - I think people think the taxes on gasoline are high enough already
  • Parking taxes - I am not sure if this can be done, but if it were to be done it places the costs on the non-transit users.  Honestly, this is one I could get behind but only if the fee is the same for all parking spaces for all commercial and retail spaces in the CRD from Sooke to Sidney - no free parking at Costco or the corner store in your neighbourhood


What should be being asked is how to make the current system more cost effective and minimize the burden on the non-transit using public.
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