By Ryan McGreal
Published November 23, 2007
The big agenda item is the staff presentation "Consideration of a Transit Fare Increase" [PDF] from the Public Works Department.
In typical fashion, the report makes all the right noises about "provid[ing] access to the community and GTA municipalities through an affordable and environmentally advantageous public transportation alternative that is safe, reliable, convenient and professionally delivered."
It waxes enthusiastically about public transit as "a potent weapon in our battle against climate change" that "also helps combat other forms of pollution, including smog." It notes approvingly that "92 percent of urban Canadians think public transit makes their community a better, healthier place to live."
Then the report proceeds with a recommendation that directly and absolutely undermines these goals. Public Works is recommending the following fare price changes to achieve an average fare increase of $0.10:
|Product||2007 Fare||2008 Fare||Change||% Change|
|Senior Annual Pass||$205.00||$205.00||$0.00||0.00%|
|University / College||$71.00||$85.00||$14.00||16.47%|
|School Hour Only||$225.00||$230.00||$5.00||2.17%|
After blaming "energy price volatility", fleet insurance and higher-technology buses for transit operating costs that are rising faster than "new revenue generated from new ridership and cost mitigation initiatives" (i.e. the gas tax transfer, which Hamilton keeps using to cover its operating costs instead of improving service), the report notes that the city's transportation master plan recommends service improvements beyond what the remaining gas tax reserve can fund.
Since increasing tax funding for transit is beyond the ken of Council and ending area rating is "too divisive" to consider (according to Mayor Eisenberger), Public Works is recommending the only other way to cover the operating shortfall.
A few things are missing from the staff report, which I hope the Councillors at the COW will ask to see before voting on this steaming pile.
The report notes "the negative impacts that are associated with potential for temporary loss of ridership and further hardship on low-income residents who depend on Transit." In fact it actually complains that this is the main consideration when fare increases are proposed.
However, while the report notes that the fare increases will generate another $1.8 million in new annual HSR revenue, it neglects to quantify the loss of ridership - temporarily or otherwise - and instead recommends a subsidy for qualifying low income riders to offset some of their transit expenses.
Council should ask staff to commit to an projection on lost ridership associated with its recommended fare increase before making a decision on the proposal. In addition, it should report on how this will impact the gas tax money Hamilton receives, since some of it is tied to ridership.
Finally, while Public Works does not recommend this option (perhaps understanding the audience to whom they are making their presentation), it offers as an alternative that Council could "mitigate [the fare increase] entirely though a higher levy allocation to transit than the City guidelines".
It notes that this option would lower the "revenue to cost ratio", meaning tax levies would cover a higher proportion of the total budget, and would reduce the tax levies available for other municipal programs.
There's a serious problem with this analysis: transit is an investment, not a cost. Done properly, transit can act as a catalyst for economic development, attracting new investment and generating new tax revenue for the city.
As long as the city continues to regard transit as a cost to be minimized so other programs (like road building) can get more money, we will continue to have these annual battles over fare increases vs. service reductions.
Related - Citizens at City Hall has published an astute analysis that looks at the proposal in the context of previous fare increase proposals by staff.
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