Tuesday evening's Committee of the Whole (COW) meeting included a report from finance manager Joe Rinaldo on area rating [PDF] - the practice of charging different tax levies for certain services to different parts of the city. The subsequent discussion generated two votes on the issue.
Source: City of Hamilton
During the debate, Mayor Fred Eisenberger declared in no uncertain terms that he did not want to have any discussion about area rating until some point in the future (definitely after the 2008 budget process).
Making reference to the transit steering committee work and resolution, Councillor Brian McHattie (Ward 1) moved a motion asking for a staff report on the implications of phasing out just area rating for transit.
It was seconded by Councillor Terry Whitehead (Ward 8), debated and voted on. It passed 7-6 in a strictly city-suburbs split with Eisenberger joining Councillors Robert Pasuta (Ward 14), Maria Pearson (Ward 10), Lloyd Ferguson (Ward 12 - Ancaster), Russ Powers (Ward 13 - Dundas) and Brad Clark (Ward 9) on the losing side.
Councillor Sam Merulla (Ward 4) moved to ask for a similar report on the other area rating categories (culture and recreation, fire services, and slot machine revenue). That passed 8-5 with Councillor Clark joining the winning side. Councillors Bernie Morelli (Ward 3), Dave Mitchell (Ward 11) and Margaret McCarthy (Ward 15) missed the two votes.
Both of these will come back up tonight (Wednesday) at city council and will likely generate another big debate. Assuming that Councillors Mitchell and McCarthy will vote against asking for the staff report and that Councillor Morelli will stick with the urban councillors, the division may be 9-7 or 8-8 depending on Councillor Clark.
An 8-8 vote loses.
I don't know a lot about the area rating arrangements for culture and recreation or for fire services, but I have tried hard to understand the area rating system for the HSR and I believe it needs to be phased out.
Staff investigations did not turn up a single municipality in Ontario which has a system similar to Hamilton's where parts of the urban area pay a different tax rate for transit than other parts of the urban area.
There are examples of municipalities which differentiate between rural and urban areas, but none that differentiate between urban and urban like Hamilton does. Not surprisingly, where there is a rural-urban division, the rural area pays much less and in some cases is not levied at all for the transit system.
I believe our current system is unfair, bad for transit, bad for Hamilton and bad for the planet.
I'm particularly worried because improving the HSR is the single best way that the City of Hamilton can address global climate change. The science of climate change gets scarier by the day, with leading scientists now warning that we are very close to a point of no return beyond which we will be unable to stop a runaway warming process whose consequences are catastrophic and could mean the end of civilization.
The current area rating system charges the average ($179,000) home in old Hamilton $165 a year in HSR levy. This is almost exactly five times the levy imposed on the same value home in Ancaster ($34). The numbers for Dundas are $41, for Stoney Creek $53, and for the tiny part of Glanbrook that pays transit levies, it's $70 per average value household. Flamborough (including Waterdown) pays no HSR levy at all - and has no HSR service.
When the lowest income part of our city pays five times the tax rate of the richest part of the city, that is grossly unfair.
When the urban area of former suburbs pay much lower transit levies, we are locked into inadequate service for those areas.
When an Ancaster resident boards the HSR, she pays the same fare as someone from old Hamilton, and can travel just as far on the bus.
When our urban transit system is crippled by budget restrictions, our local economy pays a steep price, and our local quality of life is diminished.
We need to phase out area rating for transit. It's the fair thing to do, it's the right thing to do, and it's the best thing to do for our city.
I'm sitting in Stoney Creek, paying less than a third the HSR levy of my neighbours in Hamilton, but getting just as much service as them, and more than many of them. This is indefensible.
But there's something worse than not phasing out area rating for transit. That's refusing to even look at the facts before making a decision. The resolution today was not to get rid of area rating or even to modify it. It merely asked for a staff report on the implications.
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