Modify Area Rating, Increase Transit Revenue by $7.2 million

By Ryan McGreal
Published November 19, 2009

According to a City of Hamilton staff analysis obtained by Raise the Hammer, if the city were to end the current practice of charging variable transit levy rates to different communities in the city, it would generate an additional $7.2 million in transit tax revenue.

Currently, 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.

For 2009, a median-valued ($219,600) house in the old city paid $195 transit levy. That compares with $62 in Stoney Creek, $83 in Glanbrook, $42 in Ancaster, $46 in Dundas, and $44 in Flamborough.

If the city adjusted rates so that the old city continues to pay the same rate but a median-priced house in any suburban community paid $148 transit levy - still lower than the old city but consistent across the suburban communities - the total transit tax revenue for the city would be $7,201,047 higher than it is currently.

Note - this only applies to homes within the defined urban area. Rural homes would pay nothing toward transit.

Table 1: Transit Tax Revenue With Modified Area Rating
Current Value Assessment Current Rates Proposed Change
Transit CVA 2009 Transit Taxes Transit $ (RT=219,600) Hamilton at $195, all other urban at $148 Transit $ (RT=219,600)
Stoney Creek $5,690,788,789 $1,963,606 $62 $4,671,184 $148
Glanbrook $888,501,174 $371,910 $83 $660,909 $148
Ancaster $3,898,597,350 $839,524 $42 $2,951,359 $148
Hamilton $22,368,948,100 $26,424,432 $195 $26,424,432 $195
Dundas $2,268,449,368 $538,315 $46 $1,717,237 $148
Flamborough $1,657,782,694 $387,059 $44 $1,300,771 $148
Total $36,773,067,475 $30,524,846 $37,725,893

Table 2, below, breaks down the tax increase in amount and percent by community, for a median-valued home. Again, note that rural residents will see no increase, as they will pay nothing toward transit.

Table 2: Tax Increase by Community to End Area Rating
2009 Final Total Taxes Transit $ Change in Transit Tax % Change in Total Tax
Urban Rural Current Proposed Urban Rural Urban Rural
Urban Rural Urban Rural
Stoney Creek $3,075 $3,013 $62 - $148 - $86 - 2.80% 0.00%
Glanbrook $2,921 $2,838 $83 - $148 - $65 - 2.20% 0.00%
Ancaster $3,148 $3,102 $42 - $148 - $106 - 3.40% 0.00%
Hamilton $3,486 N/A $195 N/A $195 N/A - N/A 0.00% N/A
Dundas $3,118 $3,071 $46 - $148 - $102 - 3.30% 0.00%
Flamborough $3,033 $2,989 $44 - $148 - $104 - 3.40% 0.00%

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.

However, Mayor Fred Eisenberger announced yesterday that he plans to call for a randomly selected "Citizens' Jury" to study area rating and provide recommendations to Council and staff.

So far, Councillor Terry Whitehead has stated publicly that he is concerned that such a move might delay a Council decision on area rating past the 2010 municipal election, which would violate the unanimous council vote in 2008 to address area rating before the end of the current mandate.

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 wrote a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. His articles have also been published in The Walrus, HuffPost and Behind the Numbers. He maintains a personal website, has been known to share passing thoughts on Twitter and Facebook, and posts the occasional cat photo on Instagram.


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By Capitalist (anonymous) | Posted November 19, 2009 at 11:57:15

Reduce the rates paid in the older sity and raise them in the suburbs to do away with area rating. This should be phased in over three years or so.

Transit in Hamilton doesn't need another $7 million to piss away.

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By alrathbone (registered) | Posted November 19, 2009 at 12:35:40

Capitalist, if it were feasible to do away with the highly subsidized suburban routes I am sure that the high rates wouldn't be needed in the first place.

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By Barney Google (anonymous) | Posted November 19, 2009 at 15:03:42

It's a matter of perception, and perception is reality. What part of municipal taxes in the "old" and "new" city is defined as going towards road construction? Designate more of that account in the old suburbs toward transit in the new order and you can balance the transit account, get millions more for the HSR and, hey presto, not increase anybody's taxes.

Lets not play this tax account shell game and instead recognize that public transit is an important tool for the development of a growing urban community generally. The more efficiently people can move about the more they can access good jobs and shop for goods and services. The lower the costs of public transit, the more discretionary income citizens have to spend on other things. Cars and road systems have reached the limits of their efficiencies in the urban environment of Southern Ontario.

Despite recognizing the importance of rationalizing public transit systems, Toronto has not been able to fully integrate the TTC with GO and transit systems in neighbouring municipalities. Metrolink is still a dream butting against political parochialism. This is political opportunity for Hamilton. As much as expanding service to the old suburbs, the HSR needs to fully integrate transit with Burlington, and develop GO inter-city transit hubs at logical points along our existing expressway systems. Yes the HSR should expand services to Flamborough, Ancaster, Glanbrook and Stoney Creek, but as part of better rail and road links to Guelph, KW, Brantford and Niagara.

Doing so would be a major step toward Hamilton and Burlington realizing our advantage as the geographical (and hence transportation) centre of the Golden Horseshoe and usurping Toronto as the economic centre of urban Southern Ontario. Currently we usually see our future only in terms of the "new" city of Hamilton, seldom in terms of our place in the South Ont metropolis and never in terms of the bay area growing its status relative to other parts of Metro. A shift to the latter is what I'd consider thinking in colour.

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By A Smith (anonymous) | Posted November 19, 2009 at 15:58:22

Ryan >> the proposal would further deepen the conflict between urban and suburban ratepayers without generating any new money for transit

Ryan, why can't the HSR fund it's expansion from it's profits?

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By alrathbone (registered) | Posted November 19, 2009 at 17:30:49

"Ryan >> the proposal would further deepen the conflict between urban and suburban ratepayers without generating any new money for transit

Ryan, why can't the HSR fund it's expansion from it's profits?"

I'm not Ryan, but i'd love to field this one.

1) Because the HSR is forced to maintain an affordable fare structure, when really some of this cost ( or lost revenue) should be carried by the social services budget.

2) Because the HSR has to compete with a heavily subsidized road system.

3) Because the city does its best to force business, even those who don't want to, to try and be car friendly (ie. minimum parking requirements...)

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By seancb (registered) - website | Posted November 19, 2009 at 18:39:42

"Ryan, why can't the HSR fund it's expansion from it's profits?"

Because we don't have road tolls, congestion tax, or other user fees for private automobile drivers.

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By Commonsense (anonymous) | Posted November 19, 2009 at 18:56:52

I'm all for the revenue neutral scenario. The only way this will get passed. It has been a complete exercise in non-sense and nothing more then a tax grab for people in the "sub-urbs" for a service that barely exists. I love the token bus we see once in a while drive by. They call that service???? Anyways, lower what the "old City" pays and increase the "sub-urbs" contribution to the revenue neutral scenario. It shouldn't be a cash cow for the HSR. In the long run the "sub-urbs" will get screwed. Let's face it though, no new arterial roads where buses would run have been built anywhere. It's the same road network for busing that has existed for ever. So this argument on RTH that "sub-urban" road development has shafted the old City holds absolutely 0 water with me.

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By Robert D (anonymous) | Posted November 20, 2009 at 12:12:14

Being Canadian has never been about "paying for what you use" or "getting what you pay for". Healthcare and education are the two biggest indicators of this. Everyone pays their share of taxes to fund healthcare and education, even if they don't use these services in any given year, or they use them little compared to those who are critically ill, or who may have 4-5 children in school.

I don't see why transit should be any different. Transit is a valuable public service. Like healthcare or education it benefits all of society, even the people who don't directly use it. We are all enriched by ensuring that public transit remains available.

That said, there will of course be complaints from places that get less service, like the suburbs, just as there are complaints from people who send their kids to private school that the shouldn't have to fund the public system (I disagree with taht argument too).

People have to realize just because you don't directly use a service doesn't mean it doesn't enrich those around you and the environment in which you live, indirectly.

No man is an island unto himself.

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By seancb (registered) - website | Posted November 20, 2009 at 18:53:13

Commonsense, It's not about the roads that the buses use - it's about the roads that are built for people to access the far-flung housing developments via car. Roads that the entire city pays for, but nobody who lives downtown needs to use.

I'm not saying that those roads should not exist - but if we all pay equally for roads that only some people use, why can't we all pay equally for a transit system that only some of us use?

Public transit, like roads (and schools etc) are financed through taxes because they collectively benefit all of us, whether we are direct users or not.

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By Cityjoe (anonymous) | Posted November 21, 2009 at 12:22:13

Quote: "Capitalist, if it were feasible to do away with the highly subsidized suburban routes I am sure that the high rates wouldn't be needed in the first place."

If suburban routes are so 'highly subsidized', why are they still so Useless!? It's not like you see empty bus's. You simple see no bus's at all. We call the one that actually Connects to a bus.. that will take you to another bus.. that will take you another bus.. that will take you Downtown, The Flying Dutchman. (so rare is a sighting.) By removing public transit from the 'Burbs, you are asking for more vehicle traffic every day. By keeping suburban public transit as a token, unusable, rediculous appendage to actual City service, you are not only ensuring the demise of that service, you are also saying 'Yes' to more pollution, & traffic jams as the 'Burbs grow. (& they are growing by leaps & bounds!)

You really can't ask people to pay more for abysmal service. As long as transit is still treated as the exclusive territory of the former towns, & villages, we probably will never have efficient Useful service for people wishing to go Downtown, to the Go Station, to LRT (if we ever get it!) or even to another former town. Frankly I don't think that's too much to expect, if in fact we are 'A City', as we claim to be, but only whenever it's convenient to do so.

We don't have any kind of consistency in the GHA for most of the services for which we are taxed. Frequently, it would make no sense at all to do so, so diverse is the population of the GHA. (which IMHO, was a sandwich made in Hell) So maybe could City Hall STOP using 'consistency' as an excuse to ladle on more taxes, at least until the day that services like public transit, police, fire, water, sewage, hydro, snow removal, etc. etc. etc. are Actually Consistent across the GHA?

You can't have it both ways. Do we want more & more traffic coming into/going through Hamilton? Do we want unbridled suburban growth? (it seems we do.) Do we want to encourage more & more vehicles on the roads because we have given people no other reasonable option to get to work, school, or recreation? Do we want more & more 6 hour + grind lock situations across the entire GHA, (as we had this Summer) that resulted from 2 distant accidents on the 403? (one accident at Hwy 6 N. & one in Stoney Creek)

What would be the problem with buses that ran every 1/2 hour from stops in the 'Burbs, to Main St., & King St. on the return trip,, & the centrally located Go Stn.? Put in 'Kiss n/ Ride passenger drop offs & some reasonable weather shelters at the suburban stops,..just like every other Sensible place between here & Huntsville has?! If the GHA wants to be thought of as a 'City' maybe it should start acting like one? GROW UP HAMILTON!!

(I am probably going to block RTH updates from my computer as of now. It's Not because I don't like the efforts of the Staff & some contributors here to drag the GHA kicking & screaming into the 12st. century, but because I'm so sick of the GHA doddering around with problems that other major cities across the Planet have been dealing with & solving since the late 1950's.)

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By jason (registered) | Posted November 21, 2009 at 15:45:32

I feel your pain CityJoe. I feel your pain. I love this city, but am so embarrassed by it on a weekly basis.

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By gwc (anonymous) | Posted November 22, 2009 at 09:05:06

People help me out here i live in the Dundas and i am wondering if the transit system needs more money to operate which they will solve with fare increases and tax increases in the suburbs why in Dundas right now are they presently putting in new bus shelters if they have no money.

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