From the Globe and Mail:

B.C. Premier Christy Clark says Lower Mainland mayors will have to raise property taxes as a Plan B if voters reject a proposed sales tax to pay for new transit in this year’s plebiscite. …

“If they decide they do want to build transit without a Yes vote in this referendum, mayors will have to fall back, I guess, on the existing funding mechanism they have.

“They have always had the ability to raise money for transit through increasing property taxes and I suppose that would be one of the options available to them if the referendum fails.”

Seriously?

You think a West Vancouver council will vote to raise property taxes on some of the highest-valued homes in Canada to support light rail in Surrey?  Or Maple Ridge to support a subway in Vancouver?  Or any council anywhere to support anything outside their boundaries?

And how do you think the Metro Vancouver board will justify imposing a regional property tax after the results of a No vote on the referendum?

My guess is that Plan B for mayors is to look to the Province to fund the big-buck projects with provincial dollars. And coincidentally, there will be a source that doesn’t require raising taxes; it just means not lowering them.

To quote Vaughan Palmer again:

Before the last election, the Liberals brought in a higher tax bracket for people with taxable incomes greater than $150,000. But the enabling legislation also provided for the automatic phase out of the higher tax bracket after two years, effective Dec. 31.

De Jong confirmed Thursday there are no plans to bring in legislation to extend the rate. Hence it will be gone at the end of the year, delivering a tax reduction worth about $200 million to the highest income-earners.

Let’s cut that in half, even though it’s fair to assume that more than 50 percent of the high-income earners in this province live in Metro.  You could do a lot with $100 million a year to support transit in the place where the most jobs are generated, and still proceed with the Massey Bridge.   Just a question of priorities.

Of course there is another potential source of revenue – and if I was a developer I’d be concerned, if not scared.

What do you think municipalities will do when faced with a choice of (1) charging higher fees on new development to fund transit or (2) raising property taxes on current homeowners?  And if they do neither, then what do you think neighbourhoods will argue when you tell them your proposal is consistent with plans that encourage more transit use or is dependent on its expansion (hello, Jericho), that you don’t need to provide as much expensive parking, that density is essential for a more compact, transit-oriented region?

What’s your Plan B?

Comments

  1. Re the province paying for major capital projects: Well they already pay a significant portion but further, why would anyone in Smithers want to support a light rail system in Surrey?

    1. Check who pays for BC Transit service in the rest of BC, and yet we get to pay for our own area too..By the way, the Expo line and West Coast Express are owned by BC Transit and leased to Translink..with the renewal date on the former this year, and 2018 for the latter. Yet who is paying for the upgrades to Expo line and additional cars for the West Coast Express with our transit taxes? Maybe Plan B is to return the cost and renovations of the Expo line this year to Province? And 2018…see the BC Transit Act.

  2. Given the high level of foreign or new immigrant money into the new gold, namely urban residential real estate this Plan B makes more sense than a PST increase.

    Plus far higher parking fees for cars incl residential parking permits that ought to be well over $1000/year and not merely one tenth of that.

    The current plan A will not reduce congestion as it is too bus centric. It will merely lower the congestion increase a bit.

    In addition taxing income is also not a good form of money raised as they are already excessively high.

    As usual Christy reads the populace well, far better than many of the beggar-thy-neighbor mayors of MetroVan.

    I haven’t even mentioned cost savings by outsourcing more which could find 100’s of millions in a budget of $5B+ annually in MetroVan !

  3. My plan B is very simple:
    Think hong kong. You build subways, and think of how much development it stimulates. The Expo Line has stimulated dozens of billions of dollars in development.
    First, you will get very much higher property taxes.
    Second, you can get a proportion of profits for all businesses (and developments) within 800 metres of Rapid Transit.
    That will pay for transit. But first you must build it.

    1. Exactly. We need far more subways in a dense city – not more buses. No car user of sane mind will use a bus that is as slow or likely slower than a car as a bus is far more inconvenient.

      For example: loop over (a new) Lionsgate bridge through W and N Van back via Second Narrows and Hastings to downtown, and a second loop through UBC along Broadway back via 41st/Kerrisdale to Metrotown.

      The current plan is very weak. Small town thinking.

      With interest rates in the sub 2% range, and not going anywhere for 20+ years (see here why: http://www.prestprop.com/2015/02/04/interest-rates-will-stay-low-long-long-time/) most of the required money can be borrowed & invested. Property tax increases, parking fee increases, road tolls, perhaps even PST are discussion points for a later date.

      1. This is right on…The plan looks to be written by a bus drivers union. This plan is doing nothing to reduce congestion. And this has already been tried a few years ago when Translink introduced gazzilion new bus hours with buses running empty in suburbs. Then they had to curb that back once they whined they are running out of money and province did the audits.

        What province needs to do is move on to auditing city books and stop these insane property tax increases. Every year 3% increase. If there was a 3% increase in income taxes every year there would be riots in the streets.

        1. If the plan was written by a bus driver’s union it probably wouldn’t be replacing buses with an automated Skytrain route.

          1. I’d like to point out that even in dense cities like Hong Kong, the vast majority of the transit trips in the territory still happen on buses. The MTR in Hong Kong is the spine of transportation in the central regions of Hong Kong and reaching into the New Territories via the old KCR lines (now a part of the MTR). However, my experience in dense cities like Hong Kong is that the bus is often the most direct and economical route. It definitely takes longer than the train, but the bus offers more direct destination to destination service that is not feasible for subways to provide.

            The bus is key in areas where it’s not economical to put a subway. Let’s face it. It’s not economical to build SkyTrains into every single corner of Metro Vancouver, nor is it economical to have a SkyTrain serve the suggested B-Line routes. The new B-Line routes will offer a quick and frequent town centre to town centre service that currently doesn’t exist. To do that with SkyTrains, we’d need a lot more than the 0.5% on the table.

            Yes, to SkyTrains and LRTs where we need them, but it’s far from a one size fits all solution.

          2. Henry, unfortunately at our city size it is not economically feasible to even put the buses in most parts of the city (basically outside of Vancouver and Burnaby). Also some of the so called new links between town centres are redundant with SkyTrans (for example Metrotown to Richmond B line which is covered by ExpoLine/Canada line). Third, where we could put some automation (such as SFU gondola) we have backed off and we are not going to do it for some reason (apparently costs escalated from 40 million to 120 million in space of two years even though something like Sea to Sky gondola was put in for 22 million in private funds). Fourth, where we could take advantage of modern trends and technology (such as Uber service) we are protecting ridiculously overpriced and inadequate taxi service. Fifth, at the time of ultra low interest rates instead of building capital projects where we need them (such as Sky Train to UBC) we are adding bus lines in suburbs thus adding to our labor costs and overall operation costs with minimal returns.

            So for that reason this looks like vision-less plan written by status quo protecting bureaucrats. Because, guess what – that’s who wrote the plan.

  4. How disgusting and telling that the premier would resort to idle threats of municipalities raising property taxes if there is a NO vote on the referendum. Clearly, desperation has set in, and she fears the province having to contribute to the costs. I am sure the mayors just love her speaking for them; does Ms. Almighty really think that she controls our mayors and our property taxes? My NO is all the more defiant, now.

    1. Reversed. If you are mad about potential property tax increases you probably shouldn’t vote for an option that leaves that as a path forward. Voting Yes is voting against burdening specific property tax payers for a regional benefit.

      1. With property tax increases at least you also burden foreigners parking their cash here for real estate. Compared to other cities in the world Vancouver’s property taxes per $1M are very very low. They could easily be doubled.

        The core to me is: it is a very weak plan, far too bus centric with zero vision for a dense urban city that needs below ground RAPID transit and less cars on surface.

        The ONLY way to do this I’d to have far more subways incl. a full UBC loop, and one over to the north shore connecting downtown, W Van, N Van and Burnaby .. and far higher costs for cars.

        The current plan fails on both counts.

        Once subways are built increased development will take care of paying for it. More buses are not the answer, regardless of PST or other funding of it. Buses are for the lower class. RAPID transit is used by all, especially those that value their time, ie middle and upper class.

        1. So you are hoping that the provincial government reads between the lines of your No vote and figures out that they need to come back with something even more ambitious?

          1. Exactly. I’d happily pay 10% PST or higher property taxes if I get s.th. of VALUE. Right now all I (and the other 500,000+ car users on a regular basis) get is more slow & wobbly buses I will not use. I will not even get less cars on the road so I can go faster by car as this is NOT a car decongestion plan. Only FAST alternatives AND far higher car use costs will achieve that. This plan is short on both counts.

            Yes, the plan is weak. Only RAPID transit will spur more development. Look around. Developers will not build a highrise because of a faster bus or a more frequent one. ONLY if it is close to a RAPID transit (skytrain, LRT or subway).

            Like any purchase I do not mind paying if it is of value. It is not. As such, I’d say: back to the drawing board.

          2. I’m with Thomas on this: back to the drawing board. I will happily pay the piper for a deserving product, but I am not about to throw money to the wind. I would hope nobody would be that silly.

        2. I don’t understand your focus on property taxes per assessed value. What matters to residents is their property tax, not their mill rate. If all these residents campaigning for a No vote think they are over taxed, why do you think they will vote for a doubling of their property tax? And why would municipal property owners vote for a property tax increase to find a system with a broader benefit? Are you really saying that you just want an amalgamation of all the municipalities into one?

          You also call for a land transfer tax, but that is a provincial issue. Not on the table, so it is a distraction. Write to the provincial government.

          You want to change income tax rules for new residents. Fine. Also not on the table. Federal issue. Not a municipal issue. Not a part of this discussion.

          You refer to a dense urban core, but this is a metro plan, not a City of Vancouver plan. We aren’t voting on amalgamation.

          And you really seem to dislike buses. Maybe that is because there isn’t a plan (now) to put a subway to your home outside of Vancouver. Watch this video and see how hip buses can be:

          https://pricetags.wordpress.com/2015/02/06/epic-bus-commercial-the-sequel/

      2. Jeff,

        By your own admission, a vote of YES or NO is just an estimate of voter “preference” and is “not binding.” You are misleading people to suggest that our property taxes will not go up with a YES vote. The proposed extra tax does not generate enough funding for all of the transportation improvements planned. The risk of a property tax increase is not eliminated with a Yes vote.

        1. It is not an estimate, it is a measure.

          I am not saying property taxes will not go up, I have no basis for such a claim. I am saying that they won’t need to go up incrementally by the $250 million raised by the increased sales tax. Voting no just adds pressure to raise that $250 million by means other than a sales tax. It doesn’t create funding or eliminate the need for transit solutions.

          I did not claim that the sales tax funds will be sufficient for all of the planned improvements in the Mayor’s Council plan. Just the 1/3 portion planned to be charged locally. The province can put income tax up to cover their 1/3, or find it elsewhere in the budget. The feds can do the same. If they don’t, there isn’t a go forward plan. We can start over. But we are only discussing the 1/3 planned local contribution here.

          1. No Jeff,

            It is not a “measure”; it is an “estimate.” A “measure” requires, by definition, the absolutes of definitive beginning and ending points (not approximations) in order to take a measurement. The referendum has no absolutes as only a portion of the populace will vote at all, and it is likely to be a very small portion, as historically has been the case with most votes, especially referendums. Thus, the referendum is only an “estimate” of the public’s preference since there is a huge error margin when only a small number of eligible voters vote. Thus, the results of the referendum may or may not be representative of the preference of the majority of citizens. It provides but an “estimate” of a part, which may or may not be representative of the whole.

            Thank you for acknowledging that the proposed extra tax will not pay for all of the proposed transportation improvements and that there are not any assurances or guarantees that our property taxes will not be raised regardless of the Yes or No vote, and that there are no financial statements to account for where, when, how, if, and/or to whom the extra tax raised would be paid in the event of a Yes vote. In brief, then, the Yes vote would be an estimate of a few who are willing to write a blank cheque for their municipality to maybe pay for only a downpayment on a few transportation improvements, but there are no guarantees of that. With my No vote, am I holding out for a better offer from my government, with more specifics of each project design and total costs, timelines for completion, full accounting of where all the necessary funding will come from, how the project will solve outstanding transit problems and assurances that the money will not be spent as general revenue? You better believe it. It would be foolish to do otherwise.

          2. News for you Susan, in our system only the people that bother to vote get counted. There is a precise measure, the votes for vs the votes against. Thinking otherwise would be, how do you say it, foolish?

            I think the rest of your post was responding to someone else, so I will leave it to them to respond.

          3. Jeff,

            I am well aware of who gets counted; that is not the point. The point is the difference between a measure and an estimate. Without a representative measure of the whole, you have only a vague estimate of a part.

  5. Thomas and Susan,

    You two are being ridiculous. Put yourselves in Christy Clark’s shoes and explain to me how in the world a No vote would ever lead to better transit.

    The reason to vote No is if you want less public transit and more dependence on cars. It’s as simple as that.

    1. Agustin,

      Name-calling of “preposterous” and “ridiculous” is hardly an argument. A No vote may or may not lead to better transit. The same can be said for the Yes vote. The reason to vote No is to send the message that citizens are not going to continue to blindly fund political mismanagment of public systems. We want better alternatives with costs and time frames specified and guaranteed in advance of approving projects. It’s as simple as that. One does not sign a contract to pay potentially escalating and unlimited funds. At the very least, a contingency fee is agreed on in advance to place a cap on any overrun costs, protecting against mismanagement of funds. One does not sign a contract to pay for unknown work and unknown expenses; those details have to be specified in a contract so that there is control and legal ramifications over what is and is not agreed to. A Yes vote approves a blank contract; any lawyer would tell you that doing so is foolhardy.

      1. susan smith wrote: ” A Yes vote approves a blank contract; any lawyer would tell you that doing so is foolhardy.”

        How exactly is this different from any other tax that we pay? At least the proposed tax is being explicitly sold as being for improving transportation – any diversion of funds from that purpose will be done at politician’s peril. That’s far more assurance than we have for any of the other, much larger taxes that we pay into general revenues.

        1. Sean,

          For starters, it is an EXTRA tax. We already pay regularly property taxes, bridge tolls, gas taxes, liquor taxes, sales taxes, mandatory medical insurance premiums, parking fees, etc., etc. into general revenue, which is supposed to pay for all the needs of the CITY, including necessary transit and transportation expenses, as has been the case in the past. However, suddenly, our municipalities are now asking for an extra special levy because they have not managed the general revenue sufficiently to pay for required transportation improvements. Also, they want us to pay the extra tax without providing any description or accounting of what, who, when, where, how, why. And, that extra tax has been acknowledged as not enough to pay for all the improvements required in our transportation services. So, it is an insufficient EXTRA tax roughly ear-marked for transportation, but we have absolutely no guarantee whatsoever that the money will be so spent.

        2. susan smith wrote: “Also, they want us to pay the extra tax without providing any description or accounting of what, who, when, where, how, why. ”

          You keep saying this, but there is actually is a plan that tells us what the money is to be used for.

          1. The fact that a campaign is being run based on the published plan. If the money isn’t spent toward that plan then there will be a pretty steep political price to be paid.

            At the end of the day, that’s the only guarantee that any taxpayer has with any politician. And it’s a better guarantee than we get for how the rest of our tax money is spent.

      2. Susan posted:

        “Name-calling of “preposterous” and “ridiculous” is hardly an argument”

        Please remember that next time you refer to those who disagree with you as foolish, foolhardy, and silly (in this thread alone)

        1. Jeff,

          The recognition of an act as being foolish or foolhardy is merely a suggestion against making rash, unwise decisions. I did not resort to name-calling individuals, unlike Agustin.

          1. I make the same distinction you do. I didn’t call anybody preposterous or ridiculous; only your arguments and your actions. I don’t know you as a person, so I could hardly claim that you are ridiculous. I can only comment on what you write here. Sorry for the confusion and if I caused any offense.

            Now, can you please answer my question: tell me how a No vote would lead to better transit. Walk me through it.

          2. Agustin,

            You wrote “You two are being ridiculous.” That is a directed insult and speaks to your frustration over not having your own way. I am not offended, however, just amused.

  6. Reblogged this on GitanoAfricano and commented:
    This is increasingly looking like a classic case of the tragedy of the commons, where no one wants to assume responsibility for the common good, and everyone wants a free lunch. With the electorate already hyper segmented, it is increasingly easy for incumbents to offer the status quo rather than offer big picture long term solutions. Premier Clark has no incentive to stake her future on supporting the referendum – won or lost, she comes out clean. In the end the biggest loser will be the electorate, as either way they will pay the cost.

  7. It all seems a bit academic. The Feds are not going to cough up $2.5 billion for Vancouver transit for years. Especially after providing funds for the Canada Line to YVR and while YUL in Montreal still does not have a rail service. Also, taking into account the need to control spending and the drop in revenue from the Newfounland, Saskatchewan and Alberta oil fields. Maybe in a few years. Meanwhile, what do the mayors do? Go ahead and take out a loan for a few buses?

    As an aside, it’s worth noting that during the previous bus strike, the congestion was actually reduced. I wondered why. After repeatedly easy commutes I realized that the lack of buses on the main feeder routes meant thre free-flowing lanes of regular traffic, instead of the usual two. So, even with many more drivers and cars on the road the traffic flowed more freely. Maybe Thomas and Susan make some good points.

    The federal Liberals might promise something but they would absolutely and most definitely have to promise Montreal something too. Trudeau desperately wants to win Quebec back from the NDP and therefore, there will be no omissions regarding Quebec when it comes to election promises. We also remember, the Ottawa Liberals made an art out of promising but take years to deliver and there has to be damn good reason.

    Even if the tax is voted in nothing will happen for years. The Pattullo Bridge will obviously be replaced and this will be financed by the province, if necessary.

    The subway will probably have to be financed along the lines described by Kyle Z, above. Which means that Vancouver would have to finance it. I realize that that is unlikely.

  8. If you want finalized bills before the projects have even been put out to tender you’re asking for the impossible. If you want a finalized bill on something the mayors called “LRT”, but which the Provincial government insisted be called “rapid transit” then dream on. We don’t know who is going to get to define “rapid transit”, let alone what form it will take.

    So yes, even though we’ve been shown a detailed list of projects and their estimated costs, the cynics are right that we don’t REALLY know what we’ll get with a Yes result, nor what will or won’t happen with a No result.

    Some here believe that a “no” vote will cause local politicians will take it upon themselves to jack up property taxes and development fees to fund projects they can’t possibly do on their own. I expect to be hit by a cow falling from the sky before that happens.

    Some here believe the provincial government will step up to the plate and build a high profile transit project in a riding dominated by their opposition. Again, death by livestock downpour seems more likely.

    But if voting “no” really does lead to better transit I will happy eat my words.

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