Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Posts Tagged ‘tax

2c for your thoughts UPDATED

with 61 comments

When the news radio called me about the Mayor’s “decision” to ask for 2c on the gas tax to pay for the region’s share of the Evergreen Line, I did not think I had much to say about it. After all, it was merely a recommendation – and would have to survive the summer and some public consultation. I recognize that the summer is a slow news time, but the amount of coverage this proposal is now getting is surprising me, though not the level of the “debate” so far. Perhaps the least expected contribution came from BC’s answer to Sarah Palin.

“When British Columbians say that they’re not really excited about paying more gas taxes, I get that. Because my focus as Premier is how do we make life more affordable for people rather than less affordable,” she said.

The Mayors were given very little leeway: they have to come up with a payment from this region’s taxpayers since the province and the feds have both already committed at their level. Since the current levels of taxes collected by Translink are only enough to keep on a current levels, the only way to raise $400m had to be an increase in currently permitted taxes. There is no time left in the funding agreement to come up with a new source so it either had to be property taxes or the gas tax, and the Mayors had made clear from the outset the very cogent reasons why property tax was not going to be the way they did it. Indeed, quite why our Premier thinks that the people of this region will like to see their property taxes raised is not exactly clear either. There is a $400m hit to our pockets and the only question is what is the most sensible way to do that. Property tax increases are no more “affordable” than gas tax increases.

As Geoff Meggs points out this also shows some lack of co-ordination inside Christy’s cabinet. Doesn’t she talk to her Ministers? Or is she deliberately trying to weaken Lekstrom?

The Sun gets itself into an interesting position “Transit taxes odious but necessary for growth of our city”. The link says that it is a “story” but there is no by line and it reads like an editorial. They sum up

“In the past, the province has stepped in and vetoed transit fundraising plans, including an earlier vehicle levy and a proposed parking stall tax. We hope that doesn’t happen this time.”

But Christy does seem to be ready to repeat the steps taken by the last caretaker premier, Ujjal Dosanjh – who went down to a stunning defeat in his last provincial election despite his last minute, and probably illegal, rejection of the vehicle levy.

For those of you who are of a mind to stick to the “no new taxes” mantra just take a read of what happened in California when they slashed their car tax. It is becoming very clear that the right wing belief that leaving money in tax payers’ pockets is the right thing to do in any set of circumstances is just that: a belief. Some people believe in Santa Claus too. Faith is holding on to a belief despite all evidence to the contrary. I have always been very much impressed by the American constitution’s requirement of a complete separation between church and state. What I cannot fathom is the right wing’s ignorance of why that is so important.

Added July 13

Blair Lekstrom is now saying that  “he has the full support of Premier Christy Clark in agreeing to Metro Vancouver mayors’ plan for a two-cent gas tax increase for TransLink.”

“I stand behind what I’ve committed to,” Lekstrom said Wednesday, adding he has spoken with the premier and ensured they’re both on the same page.

“Nobody likes new taxes – I would concur with that.”

But he said the mayors can count on the province legislating the fuel tax increase this fall – as he promised – provided mayors formally vote for it in a pending financial supplement after public consultation and review by the TransLink commissioner.

“I will not waver one inch,” Lekstrom said. “This has gone on far longer than I think the public wanted.”

Clark has also penned a letter to mayors pledging her support, he confirmed.

Written by Stephen Rees

July 12, 2011 at 3:15 pm

A transport tax would get us moving

with 4 comments

This is an opinion piece from Rob Williams published by the Guardian. He compares the method of raising funds for public transport (what we call transit) in Britain and France.

In Britain, he notes, public transport funding is now uncertain – partly due to the notable failures of what we call P3s to come up with workable solutions,  and cites the collapse of the privatisation of London Underground.

Leeds, Liverpool and Portsmouth, proposed tram schemes were scrapped by the Labour government, after millions of pounds had been spent developing the plans, in large part because of the uncertainties about costs and funding. If funding was one of the main impediments – even before the credit crunch – to providing a public transport system fit for the 21st century, then maybe we should look across the Channel to see why the French have one of the best local transport networks in the world.

Sounds familiar doesn’t it? The three schemes mentioned here might be compared to the on again off again Evergreen Line. Things do get built in the UK – for instance Nottingham has recently announced it will extend it tram system both south and west – schemes which have been in the planning phase for many years. But the contrast with France shows that there is an alternative that gives regional authorities both significant cash flows for capital schemes and support for running costs. It is based on a payroll tax. Not a big one – just 1% of the payroll for employers with more than nine employees, which can go up  to 1.75% if there is a big project (more in the Paris region). And it can only go on transit projects – not roads or bridges.

Those who gain from a good public transport should pay something towards it. As the International Association of Public Transport (UITP) says, “employers and retailers both gain from the provision of public transport services which give them access to a wider labour market and retail market respectively”. The most important source of funding for local public transport projects in France is the versement transport (transport tax), or VT for short.

Interesting view that – retailers actually benefit from transit spending! And again, note that France lead Europe in the development of hypermarchés, the huge big box stores on the edge of town with vast parking lots that sell nearly everything.

I can hear the howls here already. First from the groups like the DVBIA and the local Chambers of Commerce. The exemption for small businesses will be ignored – it will be decried by both left and right as a “tax on jobs” and will be said to kill enterprises. Moreover both will insists that only massive spending on more roads that allow people to drive everywhere can actually help business. You can bet too that the significant lobby that backs highway expansions will start work immediately to undermine the proposal. It clearly runs counter to the interests of the people who sell gasoline, cars and tires – as well as those who benefit from big contracts to build and repair roads and bridges. These are the people who have dominated the debate in North America for years, with the results we see before us now.

There’s also the argument – recently aired by Paul Landry among others – that many people in this region do not get good transit service now so they should not be expected to pay to make it better.  Which I think is a syllogism.

Perhaps someone who has been part of the recent Translink exercise can tell me if the idea of payroll taxes was ever raised as part of those discussions? I cannot recall it getting mentioned in any of the coverage I have seen – and I am sure it would have attracted a lot of notice if it had.

Studies in France have confirmed that the VT does not have a significant effect on labour costs, nor on company location. It has a very limited taxation impact (less than 1% of the overall French tax burden). It is a powerful tool for financing and developing public transport in France, which is why the VT has been introduced in more than 85% of urban areas. Almost 40% of the costs of public transport in France are financed by the VT.

In North America we have become entrapped in a dogma that says all taxation is bad – and all government  spending is inefficient. That taxes must be cut for both corporations and the wealthy must be reduced – or eliminated – in order to promote economic growth, or rather produce increases in the GDP, which is not a very good indicator of well being in my – and many others – view. The fact that the expected results do not happen – that wealth does not trickle down, that corporations end up paying little or no tax, and that government spending is now prioritized to prop up corporate well being while essential social services are allowed to wither – being largely ignored by the corporate owned and controlled media.

It is also significant that France avoids the trap of the “balanced” policy that is often foisted on English speaking nations. Not that the French do not have autoroutes, or have spent lots of government money on car (Renault, Citroen) and tire makers (Michelin). But that they do so at the same time as spending much more on railways and public transport in general. Here the advocates of “complete systems” are really simply trying to divert as much as they can get away with to road spending. In the early days of Translink it was common to hear the argument that – for instance – you can’t put in a bus lane on a two lane highway. And even the very dubious – well the population has grown much faster than the road network in recent years, so now we have to catch up. And of course the entirely specious case for more road spending to improve freight movement. (Even on the Port Mann Bridge trucks are less than 8% of the traffic flow – and that is the busiest freight road in the region.)

Rob Williams ends by making economic arguments to support the idea, but I am not going to take that line. I actually think that we should embrace the notion that we probably have more than enough now – it just is not distributed very well. And we also know that what we have been doing – are doing now – is not sustainable. Exponential growth cannot happen for very long in a finite system – and we human beings have to recognize that we have severely tested the ability of the environment and ecology on which we depend for the essential things in life  – air, food, water – and one of the reasons for this is our relatively recent adoption of personal motorized transportation for everyone. We have known for a long time that this cannot be made to work in large urban regions – but that has not stopped resistance to public investment in better alternatives. We also now realize (or ought to) that reduction of car use and greater development densities are going to be essential components in a more sustainable future – both regionally and globally. Better transit is an essential part of reducing the size of our footprint – carbon or ecological.

Yes, adopting a payroll tax in one region – or one province – may well encourage some firms to think about relocating. But the ones that stay and see the benefits of better transit will be the long term winners. I think Metro Vancouver could actually start to live up to its reputation for a change. It is significant that not only did Microsoft decide to relocate to Richmond recently, but the first ting it did was to set up an employee transit system. Obviously some companies realize that if you want to recruit and retain employees, a favoured spot in the company parking lot may not count for very much in future.

Written by Stephen Rees

August 16, 2009 at 11:15 am

Posted in transit

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Translink mulls property tax hike

with one comment

Jeff Nagel Black Press

TransLink’s unelected board will deliberate in secret on whether to raise residential property taxes to help businesses shoulder the burden of an expected tax hit.

At issue is how to raise an extra $18 million each year that TransLink no longer gets since the province eliminated its ability to levy a parking stall tax that the business community fiercely opposed.

Kevin Falcon scrapped the parking stall tax as part of his Translink makeover. The question now is how to replace that revenue – and if it comes from property tax does that apply to all property or just businesses. The new board was of course selected because it represents business. And the business groups get to speak to the new board in private. Everyone else has to wait for the limited opeings of that the Board allows for public submissions.

The battle over property tax for transit is a long running saga here – and across BC for that matter. Property tax is the only one that municipalities can access. The province does not decide how high that can be – local voters do – but it mostly makes its contributions to transit conditional upon local contributions. (One long running sidelight argument is about the gas tax: if it is only raised locally but by the provincial government, does that make it a local or a provincial contribution?)

Mayors do not like hitting voters with property tax increases. For a long time that meant they went after businesses since they do not have votes as businesses, though of course business can and does turn out the vote and pays for electioneering. There is also a limit on how high you can jack up property tax before businesses start to relocate. And most councils are controlled by business friendly parties and non-parties.

Of course the first question to be asked is why Translink “needs” this money since it has a substantial cash cushion at present. Secondly, it has to be noted that Kevin Falcon has also tied raising the gas tax to raising property tax. And he is also refusing to look at changing the provincial policy on tolls to permits road user charges on existing roads.

 Any plan by TransLink’s board to increase taxes will still require the approval of the Mayors Council on Regional Transportation.

But is that real or merely a set of words on some legislation? It seems to me that the province has the upper hand, since it can simply put off any of the much needed and desired transit expansions in its so called “plan” by saying, ‘only if you raise property tax’.

Written by Stephen Rees

March 5, 2008 at 11:03 am

Posted in regional government, transit

Tagged with ,

Hide your money before the TransLink Gang turns you into roadkill

with 3 comments

Fazil Mihlar,
Vancouver Sun
Published: Thursday, January 24, 2008

This is actually yet another reaction to the Premier’s transit announcement. Fazil Mihlar only sees it as yet another “cash grab”. And blames it on Translink, which I think is a bit rich as it was made very clear to me last night that this is a provincial initiative – the Ministry of Highways is being made to realise that it is, in fact, the Ministry of Transportation.

So “Yes” to buses and SkyTrains, but not if it means not having enough money to pay the mortgage, buy the kids a pair of shoes, save for their education, pay car insurance or replace a worn-out furnace.

So obviously even if there are lots more buses and skytrains, no-one will actually think twice about how much it costs to insure a car. It is clearly as essential to living in this region as shoeing the off spring. Of course, the fact that many Canadians have given up on the idea of having children, and many Vancouver residents – and others – are discovering that there are real alternatives to owning or leasing a vehicle has not occurred to the Sun editorial board’s graduate of the Fraser Institute.

Most people are sophisticated enough to realize that if we want better public services, we must be willing to pay for them. What we are not willing to pay for are boondoggles and lousy investment decisions. Ask most people if they think we should upgrade our schools to make them earthquake proof, or run more frequent bus services or cut waiting lists for surgeries and they will say “yes”. Of course they are not happy to pay for that, but then that is because they are also paying for the mistakes of the past (the fast ferries, the Millennium Line, residential schools, Mirabel airport) all of which still show up on government balance sheets, as well as the mistakes of the present (widening the Sea to Sky, the Gateway, the Convention Centre extension) . And actually it doesn’t matter which particular level of government has this debt – it’s servicing all comes out of the one pocket. Ours. And most of us were ignored and kept well away from the decision making that resulted in these mistakes – and I am only listing those that are top of my mind – not lacking for shortage of examples.

This is why I advocate tax shifting – but also much better decision making and more public input. Sadly, Fazil and his ilk are part of movement to ensure that there is less democracy, less accountability and a reduction in national sovereignty. Not that you can tell that from this piece, but look at his oeuvre and you can see a supporter of neoliberalism. And better transit does not fit into that mold at all.

This was also the argument that killed photo-radar. Not that it was a well run program, or could not have been made much more effective, but by reacting in knee jerk fashion to the “cash grab” argument, Gordon Campbell ensured that more British Columbian residents and visitors would die in high speed road crashes. Because the evidence is clear that well run photo radar programs reduce crash severities – and if they didn’t ICBC would not have promoted them.

It will be really sad if once again the same transit plans we wanted implemented twenty years ago are killed again by this anti-tax attitude.

Written by Stephen Rees

January 24, 2008 at 2:52 pm

Posted in Economics, transit

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