The motion would direct staff to report back on addressing area rating for transit in a way that will "align with the overall city Transit strategy."
By Ryan McGreal
Published February 15, 2019
Ward 4 Councillor Sam Merulla has just circulated a notice of motion in which Council would direct staff to report back on area rating for transit as part of the 2020 budget process.
Councillor Merulla introduced the notice at today's General Issues Committee budget meeting. It will likely be presented at the next budget meeting, scheduled for February 25.
Area rating is the municipal practice under which different parts of the city pay different property tax rates toward transit and receive different levels of transit service as a result. Area rating dates back to the amalgamation of the old city of Hamilton with suburban communities Ancaster, Dundas, Flamborough, Glanbrook and Stoney Creek.
Before amalgamation, the suburbs paid the City of Hamilton to provide some transit service from the HSR, but at a much lower level than the old city received. As part of the amalgamation compromise, that historic discrepancy in tax rate and service level was grandfathered into the new city when it took effect on January 1, 2001.
The main problem with area rating is that it locks in lower transit service to those former suburbs. Any increase in service must be borne entirely by local ratepayers instead of distributed across the entire tax base, which makes service improvements politically difficult.
In addition, the service boundaries are highly arbitrary: people living on opposite sides of the same street can pay vastly different transit tax rates. Not only is this unfair, but also it makes coherent city-wide transit planning impossible.
Hamilton is exceedingly rare among Ontario municipalities in maintaining different tax rates and service levels for transit. (Earlier this month, RTH received an email from Geoff McCausland, Councillor for Ward 4 in the City of Greater Sudbury, who lamented that his city still has area rating for transit and fire service - also as a result of amalgmation.)
Councillor Merulla's motion does not explicitly call for a report on eliminating area rating, but that is implicit in the text, since the preamble notes that Council "supports a system wide approach to public transit which includes enhancing service levels" and the second resolution states that the staff report should "align with the overall City Transit strategy."
In an email response to RTH, Merulla confirmed that the goal is to phase out area rating, a policy Merulla introduced in 2015 and threatened to revisit in 2016 but was stymied by a majority of his colleagues. The issue is controversial among councillors whose constituents currently pay much lower transit rates than residents in the old city and whose rates would go up as area rating is phased out.
The most obvious approach would be to phase area rating out over a period of, say, four years. This is how Council voted to resolve area rating for fire, emergency and recreation services in 2011, but they decided to kick transit area rating out to the 2014-2018 term of Council.
That 2014-2018 Council, in turn, kicked transit area rating down the road yet again. So here we are in 2019, 18 years after amalgamation, and area rating for transit still has not been resolved.
The other issue Council will have to address is how to structure the phase-out in such a way that total transit revenue grows and service can expand to underserved areas.
If Council merely harmonizes rates, the cost of the current system will be distribued across the entire city but the service will still be concentrated in the old city and especially the lower city. That would be unfair to suburban ratepayers, who would rightly expect more service in exchange for contributing more fairly.
One way to solve this is for Council to increase the total HSR budget each year of the area rating phase-out, such that the old city continues to pay the same net rate while the suburban rates are harmonized.
With more funding, Hamilton can finally start to keep its annual promise that it will boost service and grow ridership.
Following is the text of Merulla's notice of motion:
Whereas transportation and public transit continue to be significant and important public policy matters; and
Whereas public transit (known as HSR) in the City of Hamilton remains a priority for Council; and
Whereas public transit is currently apportioned to residents based on geographic area and service levels; and
Whereas Council has stated on numerous occasions, it supports a system wide approach to public transit which includes enhancing service levels;
Therefore let it be resolved:
That City staff report back as part of the 2020 Budget process
That this report align with the overall City Transit strategy.
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