News Release
New Transit Tax Structure Considered
(Tuesday, December 16 2008) A recommendation was put forward to Regional Council today for a new tax structure for Metro Transit. The recommendation was approved in principle at Committee of the Whole. Staff are to return with the proposed tax rates and services for additional discussion and possible final approval during the 2009/2010 budget debate.
"Metro Transit's service and ridership has grown substantially over the past several years, with a 40% increase in ridership since 2002 . This growth is the result of an additional investment in transit including 70 additional vehicles, the introduction of the new MetroLink service and the soon to be launched Rural Transit Express, which will expand the traditional boundaries of the urban transit service past its core, serving residents from all over HRM," says Geri Kaiser, Deputy CAO.
A robust public transit system will benefit all residents of HRM; with less traffic on the roads and the environmental benefits derived from that (one bus replaces 40 cars on the road); less road maintenance and upgrades (cost avoidance of $165 million over 25 years) and also the promotion of economic growth, allowing commercial traffic to move more quickly.
The recommendation is to replace the current transit tax structure with two area rates for transit: a Local Transit Area Rate and a Regional Transit Area Rate.
• Local Transit Area Rate: a tax would be on each home that is within walking distance of a local Metro Transit bus stop or Park & Ride lot. All communities would share the same tax rate, with a lower rate for apartment and condo buildings. The MetroLink, Rural Express and Ferry services are excluded from this rate.
• Regional Transit Area Rate: would be cost shared with most everyone across the Municipality to cover the MetroLink, Rural Express and Ferry Services. There would also be a lower rate for multi- unit buildings.
These changes to the tax structure to Transit change how tax revenues will be collected but do not result in any new tax revenue in the current 2008 - 2009 year.
For more information, and to read the recommendation to Council, visit www.halifax.ca/council/agendasc/081209rcAgenda.html
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Contact:
Kim Borgal, HRM Corporate Communications, 490-1539
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BACKGROUNDER - December 2008
Transportation & Municipal Taxation
The Municipal Taxation System & Transit
HRM's current municipal tax system is based on property values. This taxation system has been in place since Amalgamation in 1996. Since that time, many aspects of our municipality have changed.
The current tax system for transit stems from amalgamation, when the transit system was taken over from the Metropolitan Authority.
Since 1997, the tax structure for Transit is funded by taxpayers within the urban core, since most of the conventional service exists in this area. Any service outside the urban area is funded by area rates, based on the cost of individual transit at that time.
Why Change?
The current tax structure for Transit is very different from what exists across Canada. HRM's Metro Transit system has changed dramatically over the last 10 years, as have the demands and expectations of it; and accordingly, so should the tax structure supporting it.
There are increasing demands for HRM to provide a service based tax structure. Currently, the tax structure for Transit is loosely based on who receives the service, and who doesn't but the criteria is weak and inconsistent across HRM. Because our current municipal taxation system is assessment based, there are wide variations in the way individual homes are taxed.
On June 24, 2008, Regional Council directed staff "to return to Council no later than the start of the fiscal 2010/11 with a new taxation strategy for transit."
In addition, on July 8, 2008, Council directed staff to "provide a report with respect to providing bus service to areas of HRM with existing bus service at the urban/ suburban boundary funded through the general rate, with an area rate equivalent to that paid by residents in the urban areas."
Metro Transit services have grown substantially over the year. From a $2.5 m capital budget in 98-99, it is now $36.2 million. The service has changed dramatically - with 70 additional buses, a new MetroLink service and the upcoming introduction of Rural Transit Express which will expand the service past the traditional urban core attracting riders from all over HRM. Transit is no longer about those who ride the bus. The benefits of public transit can be felt all over HRM: less traffic on the roads and the environmental benefits derived from that, (one bus replaces 40 cars on the road), less road maintenance and upgrades (cost avoidance of $165 million over 25 years) and also the promotion of economic growth, allowing commercial traffic to move more quickly. In summary, Metro Transit's services provide a substantial benefit to all citizens of HRM, whether or not they actually use the system. A good public transit system is one of the key components to ensuring a vibrant community. It provides equal access to employment and educational opportunities, health care and community facilities, and the overall freedom that comes from people having more options to choose from.
The Recommended Changes
The recommendation is to replace the current transit taxation with area rates for transit in the form of two rates: a Local Transit area rate, and a Regional Transit area rate.
The Local Transit Area Rate would be a tax on each home that is within walking distance of a local transit stop or park and ride (eg, within 1km). All communities would have the same tax rate, with a lower rate for apartment and condo buildings. The MetroLink, Rural Express Service and Ferries are excluded from this rate.
The Regional Transit Area Rate would be cost shared for everyone across the Municipality to cover the MetroLink, Rural Express, and Ferry Services. The tax rate would be based on commuter trips per four zones (based on the boundaries outlined in the Regional Plan). There would also be a lower rate for multi unit buildings.
The changes to the Transit tax structure change how tax revenues will be collected but do not result in any new tax revenue in the current 2008 - 2009 year.
Staff is asking that Council approve the above recommendations in principle on Tuesday, December 16th 2008, and that the draft 2009 - 2010 budget be developed on this recommendation. They also ask that staff return to Council with the proposed tax rates and service changes.
