Next year’s HSR budget requires a string of crucial decisions. It is heading to councillors early in November, months before public input is invited or most other features of the 2018 city spending are scheduled to be finalized. Critical decisions include a fare increase, re-commitment to council’s 10-year strategy, getting ready for LRT, and finding monies to match large federal transit grants.
Ridership has been stagnant or dropping for several years and is projected to be down again in 2017 in contrast to substantial increases in other parts of the country that have occurred every month this year. The most recent figures from Statistics Canada show July ridership in the ten largest transit systems jumped 9 percent over the previous year.
Ironically the repeated failure to add riders has further undermined council’s historical reluctance to provide new funding to the struggling system. Each recent budget has projected more riders, so when that didn’t happen, the HSR budget shortfall has had to be made up from city coffers despite years of council refusing to approve increases during the budgeting process.
The transit budget will be the focus for the general issues committee meeting on Friday, November 10 that could see decisions finalized at the following Wednesday’s full council meeting. In contrast, discussion of the rest of the city’s 2018 operating budget won’t start until the new year and isn’t expected to be finalized until at least March.
Even the capital budget decisions aren’t scheduled until December. The formal public opportunity to make comments on the budget isn’t until late February. However, individuals can request to speak to any item on a committee agenda.
Big fare hikes took place in 2015 and 2016 and appear to have caused a sharp drop in ridership in both years that has gotten worse in 2017. Council’s official policy is to raise fares every September, so a fare hike in 2018 seems likely, but an increase was waived this year because of the ridership crisis.
It also responded to public anger over councillors abandoning their 10-year transit strategic plan last March at the first point when new tax monies were scheduled to be provided to the HSR. All the monies for the first two years came from the fare hikes in 2015-16 which had been justified by the promise to add city monies in 2017. Councillors promised to get the 10-year strategy back on track in 2018, but that will require even more city funding and would almost certainly require tax hikes – something councillors are loathe to do in a re-election year.
The 2017 budget decisions also put off finding monies to match a $36 million grant from the Trudeau government that would pay for new buses, starting a new service and storage garage (bus barn), and other transit capital spending. The grant is dependent on Hamilton matching the federal allocation and can’t be put off again without losing those monies.
LRT commitments are also looming over the HSR budget. Contracts must be finalized next year for the billion dollar light rail line from Eastgate to McMaster, with construction scheduled to start in 2019. So far, the HSR has not revealed whether it will substantially modify the existing transit system to integrate it with the LRT. The B-Line express bus will disappear and there are plans on reroutes to avoid light rail construction sites, but nothing to indicate a belief that a fundamental rethinking of HSR routes could be appropriate.
There are numerous other unanswered transit questions that could be part of the 2018 transit budget recommendations. These include where additional monies will come from for the new HSR bus barn, since only a small portion of the estimated cost is covered by the federal grants and matching ones from the city. There’s also the fate of the controversial area rating tax system that sees residents of the former suburbs pay less than one third the transit tax rate of those who live in the former city of Hamilton.
Will the requirement for more dollars mean that federal gas tax monies will be shifted to transit as is done by most other municipalities, or will that $32 million a year continue to be allocated almost exclusively used by for road building?