On June 12th the Mayor’s Council presented their 10-year transportation strategy. It has no chance of coming to fruition and that’s a serious problem.
Just hours after the plan was unveiled the BC Transport Minister has squashed one of the proposed funding sources (reallocation of Carbon taxes collected in Metro Vancouver). We’re heading into a referendum which will only result in disaster. The province is perfectly happy with this outcome. They get to play the easy card of “no way are we increasing taxes” while deferring the messy business to the mayors. This is a play they’ve been getting better and better at since Translink was first created. Defer any responsibility over infrastructure and be the “good guy” that keeps taxes low. And you can’t argue with their logic. “The public doesn’t want more taxes.” I mean, of course! But they gloss over any accountability over where existing taxes go or what the result of insufficiently funding transit infrastructure will do for the economy.
TransLink Financials 101
TransLink funding comes from a few sources. Primarily this is: Transit fares and Taxation.
At a Municipal level, TransLink is authorized to collect revenue from the following sources:
- Transit Fares: $460 million
- Fuel Tax: $335 million
- Property Tax: $288 million
- Parking Sales Tax: $53 million
- Hydro Levy: $19 million
- Replacement Tax: $17 million
Translink also gets support from Senior Government levels and in 2012 this represented $85 million, of which 75% went towards capital purchases (big projects).
Lots of money brought in. How’s that spent?
- Bus Division: $765 million
- Rail Division: $329 million
- Roads & Bridges: $216 million
- Corporate: $73 million
- Transit Police: $28 million
Ok let’s simplify. Translink costs are around $1.4 billion a year to service 2.3 million people in the region. That means we are collecting around $600 per person per year smeared between all of the revenue sources. (my contribution primarily came from transit fares and property tax last year and was well over the $600 number)
Now, revenue sources aren’t just sources of revenue, they are also great ways to change human behaviour. Increase fares, and decrease my likelihood of taking transit unless absolutely necessary. Increase gas taxes, and decrease my likelihood of taking my car thus increasing my likelihood of considering public transit, biking or walking. This is where I think things are going stupid.
Why are we charging transit fares?
TransLink gets a lot of its money from fare collection but this funding source works against their goal of increased ridership. From a political perspective though, this is an easier funding source to increase as transit revenue customers are a minority of the voting public (and TransLink is heavily overseen by the mayors of the region). The human desire for “fairness” drives crazy political decisions that work against goals that will ultimately make everyone better off. Why should everyone contribute $1 more when the 5% that actually use transit can contribute $20 more? (these numbers are a big exaggerated, but you get the point.)
I believe the high contribution from Transit Fares is a huge problem. It speaks to a public and political landscape that believes that Transit is only for those that use it instead of a critical component of a healthy community. I pay for the municipal school system through taxes even without having kids. I pay the same into the provincial health system even though I’m still fairly young and reasonably healthy. I pay for roads even though I have no car. How can we improve public opinion of public transit so that a greater share of the revenue can come from everyone, not just fares?
The problem with the Carbon Tax
Several years ago the provincial government introduced the Carbon Tax. I’m totally happy with this in principal. BC claims they are a “leader in climate action by having a Carbon tax.” The problem is, this tax is not being effectively used to fight climate change. Folks pay the tax on fuel that has carbon emissions. The government then uses the tax collected to give broad tax breaks to everyone. You can see that pesky human “fairness” thing again here. If I’m an average citizen with average carbon emissions I’ll pay more when I buy fuel, but I’ll get most of that money back in the form of tax breaks. It’s no change to me. It might slightly alter my decision-making when buying fuel but with most of that money coming back to me, it isn’t a huge deal. I can only imagine paying taxes on alcohol and at the end of the year getting a booze rebate from the government in an effort to keep the alcohol tax “revenue neutral”.
Carbon emissions are bad. People get that. So yes, I’m perfectly happy with being taxed for those carbon emissions. But please use that revenue to help offset the bad outcomes caused by the emissions from my purchase. Alcohol is bad, tax me and use that money to boost the health-care system so when my liver falls out I can be taken care of. I want my Carbon tax contributions to go to activities that reduce carbon emissions. You know, like public transit, which is exactly what the Mayors Council proposes and what the Minister of Finance squashed within hours.
Wrapping this up
I’m rambling. Buy me a beer and I’ll talk about this for hours.
I’m really proud of how the Mayors came together and put forward a solid plan. I’m disappointed that they aren’t more aggressively moving municipal revenue from fares to property tax to treat transit as a critical piece of infrastructure that benefits everyone. I think the mayors are fair in asking the BC government to start using Carbon Tax on activities that actually reduce carbon emissions.
We’re heading head-first into a referendum and I’m nervous. I suspect we’ll get into another stale-mate where no new funding sources can be found. The provincial government won’t budge in giving new funding sources, and the mayors will not raise property taxes. In this situation transit deteriorates further and quality of life in the region drops. I hope I’m wrong but unless we dramatically shift public and political opinion on transit, I just don’t see how this is going to get better.
- Translink 2012 Annual Report
- Mayors Council Regional Transport Plan
- BC Government 2012 Fiscal Plan
- BC Government Carbon Tax Cuts