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Cheap suburban bus rides

Jan 26, 2015

Last week’s bus-only-lane debate included a threat by Sam Merulla to resurrect the sticky issue of area-rated transit taxes that council put off four years ago. Reforming the system that allows suburban residents to pay less than a third of the transit taxes imposed on households in the old city of Hamilton won’t be easy but could offer a potential source of HSR funds that isn’t currently evident in the proposed 2015 city budget.

The average value of a Hamilton house is $275,700 and the city’s 2014 tax calculator shows those in the old city currently contribute $244 for transit. The same valued house in Ancaster pays $68, in Dundas $58, and in Stoney Creek $71. Waterdown and Mt Hope sit at $39 and $38 respectively, while Binbrook and nearly all rural areas contribute nothing to HSR – including the entirety of Robert Pasuta’s Flamborough ward.

Higher tax rates on apartments mean tenants pay much more – $667 in any units in old Hamilton valued at $275,700. Even apartment units valued at only $100,000 contribute $242 a year in HSR taxes (indirectly through their rent since the tax bill goes to the building owner).

The variable rates are a hangover from a time when the suburbs bought service from Hamilton’s Street Railway, and this history continues to result in far fewer buses and less frequency in the suburban areas. The exact tax rate depends on the total hours of bus service in each of the former municipalities. Across the old city, however, the tax rate is uniform despite substantially less service in the northern and southern segments.

As area-rating currently stands, the costs for rapid transit (LRT or BRT) from Eastgate to McMaster would not be added to suburban tax bills because the route is entirely in old Hamilton. Mountain residents, however, would have to share fully in the bills even though most live further away from the route than many in Dundas and Stoney Creek.

The pre-amalgamation taxing arrangement also explains HSR route oddities such as the Barton bus using the former boundary of Stoney Creek near Gray’s Road as its eastern terminus even though Barton Street continues all the way through Winona. Crossing this imaginary boundary means bus frequency goes from every seven minutes to every thirty minutes, inconveniencing Hamilton residents travelling to and from the Stoney Creek Mohawk College campus or the extensive industrial employment zone along Aravin Avenue.

The Rapid Ready transit plan endorsed unanimously by council calls for $156 million in new HSR capital funding during 2013-2017, but none appears in this year’s capital budget. The HSR section of the proposed operating budget is still secret but any portion of the $45 million a year recommended by Rapid Ready will be competing with numerous other requests in a budget that is already forecasting a 4.4 percent tax hike.

Changing area-rating won’t come easily from a council where suburban councillors hold 7 of the 15 seats. The impact on their residents will be substantial, and finance chief Mike Zegarac has already declared that staff “are not making any assumptions as it relates to transit” taxes in this year’s budget.

Last spring area-rating also sank a committee decision to improve service on the cross-mountain Rymal 44 bus. Objections from Ancaster councillor Lloyd Ferguson about the tax impact on his community convinced enough councillors to cut service to once an hour for evenings and weekends.

Hamilton is the only municipality in Ontario that has multiple transit tax rates within its urban area. Others treat bus service like police and fire protection, while a smaller number exempt or impose lower rates on rural areas.

Four years ago council agreed to eliminate other tax variations between former municipalities, and it promised to re-visit transit taxes upon “completion of an approved implementation plan for transit service improvements”. The Rapid Ready plan endorsed unanimously in February 2013 seemed to meet that requirement but so far the there’s no reform proposal on council’s agenda.

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