Local News

Modify Area Rating, Increase Transit Revenue by $7.2 million

If the city were to end area rating for transit, it would generate an additional $7.2 million in transit tax revenue.

By Ryan McGreal, Last Updated Monday, November 23, 2009

Published in Raise the Hammer on November 19, 2009

According to a City of Hamilton staff analysis obtained by Raise the Hammer, if the city were to end the current practice of charging variable transit levy rates to different communities in the city, it would generate an additional $7.2 million in transit tax revenue.

Currently, residents of the old city pay: nearly three times as much for transit as residents in Glanbrook, three and a half times as much as residents in Stoney Creek, four times as much as residents in Dundas, and nearly five times as much as residents in Ancaster.

For 2009, a median-valued ($219,600) house in the old city paid $195 transit levy. That compares with $62 in Stoney Creek, $83 in Glanbrook, $42 in Ancaster, $46 in Dundas, and $44 in Flamborough.

If the city adjusted rates so that the old city continues to pay the same rate but a median-priced house in any suburban community paid $148 transit levy - still lower than the old city but consistent across the suburban communities - the total transit tax revenue for the city would be $7,201,047 higher than it is currently.

Note - this only applies to homes within the defined urban area. Rural homes would pay nothing toward transit.

Table 1: Transit Tax Revenue With Modified Area Rating
Current Value Assessment Current Rates Proposed Change
Transit CVA 2009 Transit Taxes Transit $ (RT=219,600) Hamilton at $195, all other urban at $148 Transit $ (RT=219,600)
Stoney Creek $5,690,788,789 $1,963,606 $62 $4,671,184 $148
Glanbrook $888,501,174 $371,910 $83 $660,909 $148
Ancaster $3,898,597,350 $839,524 $42 $2,951,359 $148
Hamilton $22,368,948,100 $26,424,432 $195 $26,424,432 $195
Dundas $2,268,449,368 $538,315 $46 $1,717,237 $148
Flamborough $1,657,782,694 $387,059 $44 $1,300,771 $148
Total $36,773,067,475 $30,524,846 $37,725,893

Table 2, below, breaks down the tax increase in amount and percent by community, for a median-valued home. Again, note that rural residents will see no increase, as they will pay nothing toward transit.

Table 2: Tax Increase by Community to End Area Rating
2009 Final Total Taxes Transit $ Change in Transit Tax % Change in Total Tax
Urban Rural Current Proposed Urban Rural Urban Rural
Urban Rural Urban Rural
Stoney Creek $3,075 $3,013 $62 - $148 - $86 - 2.80% 0.00%
Glanbrook $2,921 $2,838 $83 - $148 - $65 - 2.20% 0.00%
Ancaster $3,148 $3,102 $42 - $148 - $106 - 3.40% 0.00%
Hamilton $3,486 N/A $195 N/A $195 N/A - N/A 0.00% N/A
Dundas $3,118 $3,071 $46 - $148 - $102 - 3.30% 0.00%
Flamborough $3,033 $2,989 $44 - $148 - $104 - 3.40% 0.00%

RTH has learned from sources at City Hall that staff are currently considering a revenue-neutral approach that would involve increasing the rates paid by suburban wards and decreasing the rate paid by the old city so that all residents pay the same rate and the total levy collected does not change.

In other words, the proposal would further deepen the conflict between urban and suburban ratepayers without generating any new money for transit, and it would effectively force the HSR to redistribute its already inadequate resources across an even larger area.

However, Mayor Fred Eisenberger announced yesterday that he plans to call for a randomly selected "Citizens' Jury" to study area rating and provide recommendations to Council and staff.

So far, Councillor Terry Whitehead has stated publicly that he is concerned that such a move might delay a Council decision on area rating past the 2010 municipal election, which would violate the unanimous council vote in 2007 to address area rating before the end of the current mandate.