City staffer Bruce Fisher presented council Tuesday with an excellent argument for changing the way the city collects taxes that pay for bus service. In essence, he suggests that the portion of the property tax be based on the proximity of a resident’s house to a bus route. (It’s a bit more complicated than that in reality.) This makes sense because whether we take the bus or not, we all benefit from the existence of transit; the regional plan projects that a decent bus system will save us $165 million in road costs—new and wider roads won’t need to be built, nor plowed—and will reduce congestion on streets and bridges, saving car drivers time and money.
Moreover, once tax is in place, we can start addressing the over-reliance on fare box revenue to fund the bus system (Halifax is one of the worst cities in North America for over-charging bus riders).
Unfortunately, the good tax idea is tied to the regressive “service-based tax” proposal, which, if adopted, will shift the tax burden off high-priced houses and onto middle-class neighbourhoods. After his presentation, Fisher told me that the bus tax could indeed be used in our present assessment-based system, but that the (misnamed) “tax reform committee” insisted on an equal per-property tax, regardless of assessments.
This article appears in Dec 11-17, 2008.
Tim, it’s just another dumbass city hall idea where staff waste time trying to figure out how to apportion costs. Should people who live close to a fire station pay less than people who live further away ?Just stick the costs on the tax rate and be done. Transit is a public utility and it is available to all and therefore all should pay.Do suburban people pay for walking on the sidewalks of Halifax ?Should bus fares increase as the distance increases ? Should we tax motorists who insist on driving onto the peninsula ? Try talking to people who work 12 shifts and ask them how they get to and from work on transit. City Hall has a spending problem not an income problem.
Actually, Colin, it makes a lot os sense to do *something* to the funding formula. Right now, we have three tax districts for buses– urban, suburban and rural (the last pays nothing, as there are no buses in Ecum Secum or whatever). That system worked when HRM was first formed, but now there are transit demands that don’t match up. For example, the people in Musquodoboit want a rural bus. They can form a little tax district to pay for — under current rules it would be paid by everyone who lives within one mile of the bus stop. But most people who use the bus will drive in from farther away… so how do we get something resembling a fair tax? Much the same situation with the LINK buses, although the particulars are different. (Like I said, even the present funding mechanisms are very complicated, and I’m over-simplifying.)But once you get the principles in place, the rationale for who pays for what, it’s just a matter of plugging it into the computer to work out the tax for any one property owner.
The latest city council meeting on Tuesday December 9 has provided the media with much fodder. Among the blunders was a report from city staff that studied increasing transit service to suburban and rural areas and recommended that the cost be paid for more by those residents who live in those areas. The suggestion follows the ongoing effort by the tax-reform committee to introduce a service-based tax system in the city instead of the current system that doesn’t take into consideration the cost of providing certain services in one area or another, and the availability of those services when the tax is paid.City councilors expressed their ‘concerns’ about staff’s recommendation, to say the least of their reaction.What they might not know is that Metro Transit already undertakes a service-based cost/revenue structure with certain parts of their service, but I doubt many people know this.When the U-Pass was implemented to provide Halifax students with unlimited bus usage, I was the executive from Saint Mary’s University (SMU) overseeing the roll-out of the program in its first year in the city. In the negotiation process, the student union and the university administration agreed to impose a flat bus pass fee on all full-time students at SMU, regardless if they use the bus or not. In return, SMU asked Metro Transit to provide better service to the university, and unlimited access for 8 months of the year to students who to use the bus.Ultimately, a deal was reached where SMU students paid for the full cost of the extra servicing, which was collected through the annual UPass fee. This is public information available in articles that appeared in the university student paper in 2003 when the UPass was launched.SMU students ultimately ended up paying for the full (unsubsidized) annual cost of the additional services, regardless of the fact that the buses were used by more than SMU students alone, and were existing buses that are already subsidized as part of the transit money the city gives to metro transit. While seemingly unfair, the overall benefit outweighed the cost. Transit ridership gradually increased as more students adopted the new mode and left their cars at home. Less parking spaces were required in and around the university, allowing for more academic buildings and less street congestions.The precedent has been set for a pay-per-service system. And while the cost of the pass was higher than what it should be, everybody won in the end, and all universities in Halifax launched the UPass in following years under the same fee structure.So, let’s talk about the application of a service-based tax system in relation to transit services.A service-based tax is a good idea, specially for transit. Transit is one of those services that can easily be linked to the elusive goal of good and environmentally-sustainable urban design. And so the question of transit planning is ultimately linked to the question of property taxes and their effect on housing distribution and sustainable service densities.I understand why rural and suburban residents want good public transit options (who doesn’t!). But it must be provided at a higher expense to their tax area (albeit, not without first resolving the question of affordable housing for low-income families, as described further in this comment).Extending bus lines to every nook and cranny in HRM, then loading the cost of that on all residents regardless of their location, is a recipe that awards suburban sprawl. This backward and reactive strategy has no place in planning a city ready for the challenges of the 21st century; A city with an eye for a prosperous future.Our local government should work more at creating tax and service incentives to encourage people to live together more sustainably in higher-density communities. HRM staff knows this, common sense dictates this, and scientific evidence supports this.Yet, people are reluctant to swallow penalties for unsustainable residential choices. They want to live in the quiet country-side large house with a sprawling back yard overlooking a lake, AND they want all the services that a city dweller with smaller quarters and higher rents/taxes gets, AND they want good roads and transportation options to travel back and forth from their oasis to their city work, AND they want to pay less tax than urban dwellers!!The argument that service-based taxation will negatively affect low-income families who can’t afford to live in the urban core is a critique that has been misplaced. This is an issue that relates to the lack of rent-controlled housing for low-income families in the urban core, which is an issue that can be solved with a more equitable tax structure in the urban core along with a commitment by local government to provide affordable housing for low income families throughout the urban districts.Affordable housing can exist in the urban core only with a service-based tax system that allows city hall to redirect its tax revenues into creating housing solutions. It can also use the new structure to provide tax incentives to encourage (or even mandate) developers to include affordable housing within their development projects.The current tax system only helps to encourage the creation of ghettoized districts, where low income families are forced to collect in specific areas due to the financial incentive that the government inadvertently creates with a tax structure based on property value. Just ask France about how well it worked out for them to create suburban pockets in Paris where the cost of living was lower than in the city core!So let’s not say no to a service-based tax system that will benefit everyone in the long run and will bring us closer to an environmentally and fiscally sustainable city. Instead, let’s take this opportunity to inscribe urban solutions to the low-income housing situation as part of the overall effort to move the city into the new tax structure. The structure that rewards dense community living with financial savings that allow the implementation of excellent public transit options and everything else that our city deserves.
Issmat– I was with you, mostly, until the end. Let’s consider two rural properties, say, a half mile away from each other. One is a guy who bought a half-acre, put a trailer on it, uses his property and whatever he can lease out to run a wood lot. He’s making a living, but just barely. Happy enough, life’s good.A half mile away, some dude from the states comes up, buys 20 acres on the ocean front, builds a $3 million mansion, flies in once a month with his family, doesn’t give a shit about his neighbours, probably bitches about his taxes, those damn Nova Scotians taking advantage of the Come From Aways who can’t get up here to appeal their assessments (I’ve heard this argument). Buddy with the trailer and wood lot gets charged the exact same transit tax as the millionaire on the oceanfront.Is that right?
That’s a fair question. But the situation you describe is less an issue about transit tax and more a reflection on the reality of life for low income families regardless of their residential location. That question would equally apply to the man or woman working a low paying job and renting a small hole in the city, barely making a living but getting by nonetheless. Should the low-income city dweller pay for their consumption of power and heat? Should they pay for rent? Their rent includes their property tax contribution to the building they live in, which is an assessment of all the services the building has access to in the urban core.Low-income does not discriminate by location. If we look at the question in the context of ‘how do we deal with low income members of our society’, then the answer is usually to examine their “total” cost of living against their “total” income, then attempt to alleviate that with government programs. The tax rate for the rural area in question should apply across the board: to the mansion and to the woodlot. If there are any appropriate transit services in the area (more likely being used by the woodlot owner), then the formula for the property taxes in that entire area should reflect that cost. On the back side though, if the person’s income level qualifies, there should be (and there are) government programs to alleviate the ‘total’ cost of living for the low-income woodlot owner. This will thereby compensate for their (in)ability to afford the transit tax… among other things. These programs include Income tax exemptions, EI payments, rebates, etc. This is not to mention the lower property tax they are starting with anyway due to their rural location.A service-based tax system can be accountable and equitable, at least no less than the current system based on property-value.
Issmat: The tax rate for the rural area in question should apply across the board: to the mansion and to the woodlot.Then you agree with me.See, the “tax reform” proposal applies the same *dollar* tax– not *rate* tax– to all properties, regardless of assessment. It works in Halifax, too. A young couple pools their hard-earned money to buy a house in the north end, worth maybe $150,000. Under the tax reform proposal, they’ll pay the EXACT SAME TAX as a $10 million house on Young Street.It ain’t right.
Great discussion Tim and Issmat.I hate to wade into this one, as the discussion of taxation relative to income or wealth is about as resolvable as a discussion on religion….but, I’d only say, in considering levies charged specifically for the purpose of funding public transit, the folks in the $10 million mansions are most assuredly not using this service, ever. I get your argument that mass transit benefits all indirectly, but boes your desire to continue “rate based” funding of mass transit, then, make it a welfare program?Sometimes I get the impression that the motivation on the part of activists who would see the wealthy taxed so highly is not to give the little guy a leg up but to punish the wealthy for being wealthy. I have no doubt that there are a million rationalizations against this gut feeling of mine, but I still have it; there’s quite possibly something much darker than principles of equity driving some of this discussion, sometimes. 😉