Mayor to Call for Citizens' Jury on Area Rating

By Ryan McGreal
Published November 18, 2009

Mayor Fred Eisenberger is calling for a "Citizens' Jury" to investigate options on how the City of Hamilton should reform the current area rating tax levy system.

Under area rating, residents of different parts of the city pay different rates toward certain municipal services: transit, culture and recreation, and fire protection. Hamilton is the only municipality in Ontario to do this, and it is a throwback to the forced amalgamation of the city with its suburban neighbours in 1999.

As a result, residents of the old city pay nearly three times as much for transit as residents in Glanbrook, three and a half times as much as residents in Stoney Creek, four times as much as residents in Dundas, and nearly five times as much as residents in Ancaster.

In 2008, City Council acknowledged that Hamilton's current area rating system for transit tax levies is unfair and instructed staff to investigate options to fix it before the 2010 municipal election.

Staff will present their report to the November 24, 2009 Committee of the Whole, but Mayor Eisenberger announced in a news release his office issued today that he will put forward a motion to ask staff "to report back on the terms of reference, selection criteria and costs associated with a 'citizens' jury'."

A citizens jury would be an ad hoc committee of Hamilton residents randomly selected to study area rating and provide recommendations to Council and staff.

If the Committee of the Whole approves the motion, this will be the first time that Hamilton has followed this method of public consultation.

RTH has learned from sources at City Hall that staff are currently considering a revenue-neutral approach that would involve increasing the rates paid by suburban wards and decreasing the rate paid by the old city so that all residents pay the same rate and the total levy collected does not change.

In other words, the proposal would further deepen the conflict between urban and suburban ratepayers without generating any new money for transit, and it would effectively force the HSR to redistribute its already inadequate resources across an even larger area.

The city would collect over $7 million in additional transit funds if all wards of the city paid what the lower city pays today.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.


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By markwhittle (registered) - website | Posted November 18, 2009 at 16:24:55

Sounds more like a "hung jury" to me Ryan, another way our elected officials fob off their responsability to the whole. If good transit raises all boats, we should all be paying the same tax rate on assessment. I personally don't mind kicking in my fair share even though I own and drive a car. Renters pay even more. And Hybrid Bus fleets are all the rage everywhere but here. LOL. Voters have to wise up next municipal election.

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By alrathbone (registered) | Posted November 18, 2009 at 17:53:21

Somehow I think the jury is going to play "follow the leader" and go with the staff report.

We need to fix this city's finances and that includes in the short term 1) A fair tax levy for all 2) Better use of tax dollars and 3) Making investments that will save money and spur growth in the long run.

For example: LRT, at least on the East-West corridor is likely to not need operating subsidies (based on the very low subsidies for the routes it is replacing large parts of, increased ridership, and decreased per passenger operating costs). As well it will stimulate development (don't ask me HOW but the data does not lie).

What i'd like to see less of is things like tearing up a road twice in rapid succession when it only should have been done once, and other un-frugal uses of tax dollars.

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By Ryan (registered) - website | Posted November 18, 2009 at 23:54:24

By the way, here's the Mayor's planned motion:



‘Citizens’ Jury’

a) That Report FCS09087 respecting Area Rating Options be received; and referred to a ‘Citizens’ Jury’ process as outlined in Appendix A.

(b) That the “Citizens’ Jury” present a consensus recommendation to Committee of the Whole on November 30, 2010.

(c) That the staff be directed to develop the Terms of Reference, including Selection Criteria for Membership, costs associated with the initiative, reporting mechanisms and report back to Committee of the Whole by mid January 2010.

(d) That the Area Rating Options Report FCS09087 be forwarded to the Citizen’s Jury Panel, once established.

(e) That once individual citizens are selected, the selected names come to Committee of the Whole by February 2010 for final approval.

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By Ryan (registered) - website | Posted November 19, 2009 at 00:50:59

Councillor Terry Whitehead (West Mountain) just responded to the Mayor's proposal in an email to local media:

I will stay open-minded on the consultation process; however, the spirit of the discussions we had on Councillor Duvall's motion was clear that the decision on area rating would be made this term of council. In fact it was a unanimous vote. Anything less would jeopardize the good will in supporting any phase-in period, [and] this will only further divide this council.

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By A Smith (anonymous) | Posted November 19, 2009 at 00:57:22

Ryan >> The city would collect over $7 million in additional transit funds if all wards of the city paid what the lower city pays today.

That assumes that tax rates on property won't influence the underlying value of the properties being taxed. Ryan, I know you are a smart guy, have you ever considered that Hamilton's high tax rates are keeping assessments artificially low?

You have cited both Boston and Portland as examples of how transit can help improve the quality of life and economy of Hamilton, but both of these cities also have spending/revenue caps that limit their politicians ability to spend taxpayer's money. Have you ever asked yourself why this is?

Furthermore, even if LRT is a net positive for this city, it won't help if the politicians simply take the added revenue that it creates and waste it on projects that aren't.

Think of it this way, let's say the LRT will cost $10 million/year to operate and produces $20 million a year in added tax revenue. The politicians can then take that $20 million and spends it on projects that only return $10 million in added tax revenue. Therefore, the net result of the LRT without a cap on taxation is ZERO. All the LRT has done is to allow the politicians to waste money on things that don't produce good returns

In contrast, by capping taxes at the rate of inflation + new growth, politicians will be forced to spend efficiently. Furthermore, since the economy usually grows faster than the rate of inflation, people's incomes will grow faster than their property tax bill and this money will be left to flow into local businesses. This will create new jobs and decrease poverty.

In Boston, through the introduction of Prop 2 1/2, which limits spending, has been robust assessment growth and property tax rates that have fallen from over 2% to around 1%. There is nothing wrong with asking politicians to be more efficient with our money and history has shown that unless citizens make it easy for politicians to restrict their spending they just won't do it. The temptation to spend other people's money is just too strong.

Lastly, if the politicians felt they needed new money for a sure bet investment, there could even be a provision for holding a referendum. If 2/3 of voters felt that a new expenditure was necessary, it could get passed. Otherwise, spending would be limited to the rate of inflation.

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By grassroots are the way forward (registered) | Posted November 19, 2009 at 08:14:42

Cals' Blog:

Ryan writes: Let's be honest: the status quo isn't working. I know change can be scary, but we need to stop reacting in knee-jerk fashion to new ideas and start forming our opinions based on real evidence.

I went to a committee meeting yesterday on another issue but this comment holds so true. Things are not working, yet we seem to keep following the same path.

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By adrian (registered) | Posted November 19, 2009 at 09:51:36

We need to get Gene Hackman up here to engineer the selection of a proper jury.

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By highwater (registered) | Posted November 19, 2009 at 09:57:18

I'm not hopeful about this. Anyone with any real knowledge of the issue will be declared 'biased', representatives will be chosen by ward rather than population density, and we'll end up with a bunch of knuckle-draggers heavily tilted toward the suburbs.

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By Capitalist (anonymous) | Posted November 19, 2009 at 11:53:58

It is time to do away with area rating. Phase in a revenue neutral approach over three years or so.

Ryan, transit doesn't need any more money from Hamilton's already overburdened residential taxpayers.

As for this "citizens jury", what do we have a city council for? or city staff? This is just a way to pass off responsibility of the issue.

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By Ryan (registered) - website | Posted November 19, 2009 at 12:06:52

Capitalist, I'm inclined to agree with you about the Citizens' Jury. Council is the city's executive body, and it needs to make a decision to reform area rating in the manner that best supports the city's planning strategy and stop trying to pass the buck.

However, I strongly disagree with you about funding transit, for reasons I've already articulated in several places.

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By A Smith (anonymous) | Posted November 19, 2009 at 15:10:22

Ryan >> I strongly disagree with you about funding transit, for reasons I've already articulated in several places.

Ryan, if the $30 million that currently goes to propping up the HSR was returned to the taxpayers of Hamilton, how much of this money would find it's way back to the HSR?

In other words, how confident are you in the abilities of the government to create mass transit that doesn't require annual bailouts just to stay in business?

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By jason (registered) | Posted November 19, 2009 at 17:10:41

I have a great idea. What if we capped tax rates at 0.1 percent for the next 10 years and got rid of all public services so that people could just flop over and die on a big pile of garbage on the dirt pathway in front of their home?

It's so logical, how is nobody else seeing this??

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By A Smith (anonymous) | Posted November 19, 2009 at 21:54:21

Jason, why can't the HSR make a profit, yet taxi services can?

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By grassroots are the way forward (registered) | Posted November 19, 2009 at 22:59:45

A Smith: Are taxi services profitable right now? Wages paid are not so great and affects many who work in this industry. Paying wages that do not allow workers to sustainably live is no the answer either, since it puts more presssure on social systems such as food banks.

Also there are many health ans safety issues for the workers who drive. How many have been injuried? Since the change by the Harris regime where health and safety issues are left with the employer, how do we know that these issues are really being addressed? Isn't this one issue, in terms of workers the most important, worker safety?

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By mon capitan (anonymous) | Posted November 19, 2009 at 23:30:41

no to mention the city creates an artificial monopoly by restricting taxi licences. hardly a good example of the free market at work..

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By frank (registered) | Posted November 20, 2009 at 10:50:58

Why Jay, why?!?!?

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By jason (registered) | Posted November 20, 2009 at 11:37:26

Lol. Sorry, I couldn't resist.

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By cal difalco (registered) - website | Posted November 22, 2009 at 12:45:47

At the root of this, there is a good idea in terms of promoting the notion of having citizens more engaged. However, the parallel to a "jury", the method of selection contemplated and the topic to tackle, are just some of the many factors that signal for me, that this is a half baked idea. As I said on my blog, I think the Mayor's intent is good. I don't think this has been well thought out.

Cal DiFalco

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