Gas prices affect TransLink
Rising fuel prices and the resultant drop in consumption might be good news for the environment but they're bad news for TransLink.
According to TransLink spokesperson Ken Hardie, the total fuel-tax revenue the regional authority received in 2006 was $264.3 million, which Hardie said represented about 30.6 percent of total TransLink revenues for that year.
"In 2007, the budget is actually $260.3 million, so we are expecting slightly lower revenues, and that will be about 29.5 percent," Hardie told the Georgia Straight by phone. "Higher gas prices usually mean people buy less of it."
This puts TransLink in the position of relying on more auto dependency–and greenhouse-gas emissions–for more fuel-tax revenue. But it doesn't have to be this way, according to Todd Litman of the Victoria Transport Policy Institute.
"The smart thing would be for the province to establish a predictable, gradual fuel-tax increase, to say every year that they are going to increase the fuel tax by five percent, or whatever," Litman said. "That would be a very effective way to reduce energy consumption, but it would also ensure that TransLink and other agencies are getting the revenue that they need."
Hardie said Litman's suggestion raises a "policy issue that would rest with the provincial government". On March 9 this year, B.C. transportation minister Kevin Falcon unveiled a 52-page TransLink Governance Review at a downtown-Vancouver media briefing. Aside from endorsing a major restructuring of the regional board, Falcon also pledged to remove the parking-stall tax–which Litman called a "sensible revenue source"–and to allow the region's mayors to pump an additional three cents per litre of fuel tax to add to TransLink coffers. Falcon also claimed that property taxes, fare increases, and property development near rapid-transit stations would boost funding for the authority.
Said Litman: "[Raising property taxes] is very misguided. It is both inefficient and unfair."
Falcon did not respond to a Straight interview request.
Meanwhile, Vancouver city councillor Peter Ladner introduced a detailed motion on the topic at the October 10 TransLink board meeting at Surrey City Hall. The two-term NPA councillor and TransLink director said he wants to see TransLink rely less on property taxes and unpopular fare increases for revenue and more on "fees and taxes that provide measurable transportation demand-management results", such as road-pricing and other "user-pay" measures.
Ladner said homeowners and low-income transit riders are unduly penalized under Falcon's proposed restructuring, and there is not enough incentive to get people out of their cars.
"Without some sort of transportation-demand management, we will not get there," Ladner said.
Langley Township mayor Kurt Alberts responded: "The province has control over this." Alberts moved to defer Ladner's motion, adding that "the devil always ends up being in the details." Alberts was supported by Surrey TransLink directors Barbara Steele and Marvin Hunt, board chair and Richmond mayor Malcolm Brodie, Pitt Meadows mayor Don MacLean, and Maple Ridge mayor Gordon Robson.
Supporting Ladner were the two other Vancouver directors, mayor Sam Sullivan and Coun. Suzanne Anton, New Westminster mayor Wayne Wright, Port Moody mayor Joe Trasolini, and District of North Vancouver mayor Richard Walton. The 6-6 tie meant the deferral was defeated and directors had to vote on Ladner's motion a second time. Brodie then switched to Ladner's side to ensure the motion carried 7-5.
"I think it is a fairly good-natured split, in that I think we all agree that demand should be shaped," Walton told the Straight after the meeting. "There is just a disagreement as to exactly how that should occur politically. We've had these types of discussions before, and I think the way it fell was reasonably predictable."
Anton, who went on record in 2006 in support of road tolls, said Ladner's proposal was an important precedent in the ongoing debate about revenue sources for TransLink.
"It [the 7-5 vote] sets it out as policy for the board," she told the Straight. "I think it is firmer than it has been in terms of outright policy for the board. It [the motion] still has to go forward to the province, and the province still has to agree. Now TransLink takes it from a position of, 'This is what our board wants, and this is what is set out in our policy.'"
Speaking to reporters outside the chambers, Ladner was defiant in the face of opposition from suburban directors.
"I understand where they are coming from, totally, but my question to them is simply: 'If we're not going to do this [revenue shift], what's your proposal?'" Ladner said. "We all want to beat the congestion problem, and this is the only way I know how to do it. And if they've got a better way, let's hear it–other than building more bridges and roads or whatever. That won't do it."
Ladner said he also did not rule out a carbon tax.
"I think we are coming to an era of carbon taxes," he said. "It would influence [automobile] demand right away, and if you think of what the province has to do to reduce its greenhouse-gas-reduction targets, there will have to be these kinds of measures. We can't keep doing the same things we are doing. That is the challenge to the municipalities that are car-dependent: there is a fairness issue but also a practical issue of how do you solve the problem?"
Litman said he approves of Ladner's approach.
"Sure, whatever you want to call it–carbon tax or fuel tax or a road-user fee in the form of a fuel tax–it is a smart thing to do," Litman said. "Most taxes are a percentage of the sale price, so they automatically increase with inflation, but fuel taxes don't. They are a unit tax, so you have to raise them regularly just to keep up with inflation. Generally, we haven't been doing that with fuel taxes. As a result, what motorists pay per mile, when you adjust it for inflation, has declined over the last 30 years or so."
Hardie added that the federal government is in a slightly different situation with its fuel-tax revenues.
"They [the feds] collect the GST on price, so the GST portion of the federal fuel tax insulates them a little bit from the impact of higher prices driving down usage," Hardie said. "In our case, we are getting about 12 cents a litre [from the provincial government], and that's that." -