Hamilton’s decision to use fare hikes rather than taxes to pay for overcoming HSR deficiencies could further reduce ridership and runs counter to policies being followed by rapidly growing transit systems in other Ontario cities. The 2015 budget numbers show seven out of every eight tax dollars devoted to transit are being paid by residents of the old city of Hamilton.
Fairer transportation priorities are the focus of a public meeting next Wednesday evening organized by Environment Hamilton. Lawyer Albert Koehl, the acclaimed author of Road Follies, will speak at the central library on April 29 at 7 pm on how to effectively improve transit, cycling and pedestrian opportunities. The information could be helpful in a city with by far the poorest ridership growth rate among large Ontario municipalities.
HSR fares will climb 15 cents in September of this year and another 15 cents in 2016, followed by 10 cents in each of the two following years. This is expected to initially add about $6 million to the transit budget while avoiding any increased contribution from taxpayers.
Hamilton currently collects 47 percent of the HSR budget from riders and that will rise to at least 48 percent in September when fares go up. Council’s official objective is to have riders pay fully half of the HSR budget.
In contrast, the Grand River Transit system in Waterloo region gets just 37 percent of its operating dollars from fares, and York region stands at 39 percent. Both are enjoying rapid ridership growth – Waterloo achieved a 60 percent increase between 2006 and 2013, and York climbed 33 percent while Hamilton eked out just over 3 percent in the same period.
This year, York region has lowered its target to 45 percent from riders and doesn’t anticipate achieving more than 40 percent in the foreseeable future as it continues to work for ridership growth exceeding one million new rides per year. Information presented to Hamilton councillors this year annual transit tax increases in York are running at 5.4 percent compared to just 1.8 percent in Hamilton. Double-digit annual increases are taking place in Brampton and Durham.
Higher ridership translates into more provincial subsidies which are calculated annually on the basis of 70 percent riders and 30 percent population. Since 2007, Hamilton’s share has fallen from $11.8 million a year to $10.3 million.
Despite the fare hikes, staff predict that HSR ridership will climb at least 500,000 extra riders within two years – an estimate that assumed even with higher fare hikes than those eventually accepted by council. But that forecast contrasts sharply with earlier analysis by transit staff who tied fare hikes to fewer riders.
A 2007 report, for example, said a 15 cent fare hike would cut ridership by 550,000 in the first year and up to one million in the second year. The current HSR management argues such declines will be reversed because this year’s fare hikes will pay for improved service, but even their most optimistic projections anticipate an annual growth rate of less than one percent.
The 2015 city budget allocates $41.3 million in taxes to the HSR with 84 percent being collected from residents of the former city of Hamilton who comprise less than two-thirds of the population. That area-rating formula taxes the average resident of the old city $105 per year and a little less than $35 per resident in the former suburbs. For comparison, an adult bus user pays $1044 a year with that scheduled to rise about $100 in September.
Transit taxation versus population for 2015
|
Area |
Tax share |
% Taxes |
% Population |
Population |
|
Hamilton |
$34,683,265 |
84.2% |
63.6% |
330,481 |
|
Ancaster |
1,774,458 |
4.3% |
6.7% |
34,825 |
|
Dundas |
822,219 |
2.0% |
4.8% |
24,907 |
|
Flamborough |
405,192 |
1.0% |
8.1% |
42,172 |
|
Glanbrook |
980,699 |
2.2% |
6.9% |
36,109 |
|
Stoney Creek |
2,601,158 |
6.3% |
9.9% |
51,455 |
|
$41,266,991 |
100% |
100% |
519,949 |
Sources: Taxes and Population