Frances Bula header image 2

Is the sales tax the best way to pay for transit? No, but it’s politically sellable, says LA

December 17th, 2014 · 30 Comments

For those who don’t follow me on Twitter (are there any?), I was in Los Angeles recently. Yes, one of my favourite cities, which I’ll explain another time.

But while I was there, observing the anguish of house monsterization (a real word, it appears), the worry about gentrification brought on by bike lanes (a real debate, it appears), the angst over a developer building fortress-like apartments in downtown LA (a real architectural sin, it appears), I also had a chance to interview one of the architects of the coalition that helped get 67-per-cent approval for a half-per-cent sales tax in LA in 2008 to pay for $36 billion in transit improvements.

Denny Zane is one of those great old-fashioned American leftists, still fighting for the people. In his downtown office building, complete with a giant photo of a young Cesar Chavez, he talked for an hour about how to win the transit fight and why it’s important. Interestingly, there was a lot more focus, when he talked, about how important transit is to working-class people than I hear in debates around Vancouver (where the left and the NIMBY right seem to view it currently as some evil developer plot).

Here’s my story summing up his main points. More to come.

Categories: Uncategorized

  • IanS

    Some interesting stuff there, particularly the comments on the political saleability of the sales tax increase as opposed to other measure of raising money.

    One criticism I’ve read of the .5% change to the sales tax in the relevant area is that it will add a layer of complexity to what is already, by all accounts, a fairly complex tax. I wonder if the sales tax in California is similar to that in BC.

  • jolson

    Yes a sales tax is the best way to pay for transit, but the other question is;
    Since support of the sales tax increase is also support of the MTT Plan, and since the Plan includes a strategy for road network pricing (tolls), isn’t the referendum question also seeking approval for the tolling of roads here, there and everywhere Translink deems appropriate?

  • Richard Campbell

    A good response to the bike lanes gentrification “debate” http://www.peopleforbikes.org/blog/entry/does-better-biking-help-poor-people-denmark-shows-the-slow-huge-payoff?utm_content=buffer41e1c&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

    The best solution is to build protected bike lanes everywhere.

  • Richard Campbell

    As long as the regional sales tax follows the same rules as the PST, it really won’t add much complexity or expense will it?

  • Jeff Leigh

    No, in my opinion. The plan talks about a desire to move to road pricing, but there isn’t an implementation plan, and it can’t be done unilaterally. The provincial government would be involved in any further consideration of road pricing.

  • Jeff Leigh

    It will be important to have the same rules for application, so it isn’t a different tax structure. For businesses operating in one part of the province (under one rate) it will mean just a different rate. For business operating in two zones (with and without the 0.5%) it will mean one level of additional complexity based on whether it applies or not to any specific transaction.

  • IanS

    I appreciate it’s the same structure. However, it is a different rate and it’s not difficult to imagine that it will make things more complex, particularly for companies which operate both in and out of metro Vancouver.

    It would be interesting to hear a comment from someone who actually has experience administering the tax.

  • jolson

    I am in favour of all the transit initiatives found in the plan. But we should not be so blinded by our enthusiasm for transit that we ignore the plan for mobility pricing. Here are some excerpts from the plan;

    “LONGER TERM: Staged introduction of mobility pricing on the road network
    …….. the Mayors’ Council is committed to implementing time-and-distance based mobility pricing on the road network ………… to pay for the transportation system.
    Mobility pricing on the road network would help generate funding to implement the remainder of this Vision and shift taxation away from the fuel sales tax — which is a declining revenue source due to increased vehicle efficiency and leakage to areas outside of the region. By generating $250 million per year from a fair, region-wide approach to mobility pricing on the road network, we will be able to fund the remainder of this Vision and at the same time reduce the price paid at the pump by about $0.06 per litre. We are committed to undertaking the necessary technical, implementation, and consultation work with the Province and our partner agencies to understand how best to make this transition to ……………………mobility pricing on the road network. An important early step is for TransLink to launch a mobility pricing field study in the next ………………….
    A regional introduction of comprehensive time-and-distance based road tolls would lead to a significant reduction or replacement of the existing bridge tolls on the region’s currently tolled crossings, including the Pattullo. In this regard, we are particularly pleased that the Province has indicated a willingness to revise its current tolling policy. We look forward to working together on a new policy that will protect the Province’s own income expectations while also providing a fair and effective system for funding new investments and managing transportation demand in a rapidly growing and congested urban region.”

    IMO this is a referendum about mobility pricing and a sales tax.

  • Lysenko’s Nemesis

    Another reason many will vote NO.

  • Voony

    I was considering the issue to collect PST at
    different rate either in Metro Vancouver or outside was a straw man issue.

    Well it appears, that skeptic people could be right, The Province reworded the referendum: out is the increased PST, in is new whole tax which could be as different to the PST the PST is to the GST:

    “0.5% Metro Vancouver Congestion Improvement Tax would be applied as a sales tax to most of the goods and services that are also subject to the PST

    It is not hard to fathom that the car dealer will escape to the “Congestion Improvement Tax”, the gas station probably too…

    Anyway, it looks to open a whole new can of worm generating more red tape…That is not good!

    The name of the tax: Metro Vancouver Congestion Improvement Tax

    Transit investments “improve” congestion?

    That is a meme repeated ad nauseam: I am not sure people sitting in their cars on Oak bridge share this view.

    Let’s dispel the myth: Transit investments never improved “congestion”, and will not magically do. they improve mobility choice,and increase mobility (allowing the economy to continue to growth ): that is already a lot, but car and truck will still sit in Traffic as they do right now.

    The Tax is certainly misnamed: the only known way to reduce congestion is road pricing.

    LRT vs Skytrain?

    With the referendum, we could have think the very nasty debate on technology choice was behind us: not at all, The Province clearly re opened it:

    I had previously noticed many cautious words from the Province: such as “ the province will contribute on transit project on case by case basis, provided a strong business case exist”.

    In case of you don’t known, when come transit in Surrey, a recent joint study MOTI/Translink reads:

    The BRT and RRT [skytrain]-based alternatives were most cost-effective overall in achieving the project objectives due to greater relative benefits (RRT) or lower costs (BRT). LRT 1 and LRT 4 [chosen by the mayors] performed the worst in this account, due to higher costs and minimal benefits, respectively”

    Today the Province changed not only the tax but the wording of the suggested
    investment:
    -Out is the LRT surrey. In is an unspecified “Rapid Transit” link,

    For good measure, same apply to Vancouver (but here there is a strong business case for a subway)

    …Number of B line become unspecified too..

    Suddenly Lot of clarity on what we gonna pay an what we gonna get for the money, disappear…that doesn’t bold good

    Curiously enough, the referendum is replaced by a Plebiscite: the word could be interchangeable, but they could not be. An apparently acepted definition (pretty much worded by Mc Kenzie in 1942) is:

    “The plebiscite is an expression of opinion by the people on a general course of action proposed by the government. The vote is not legally binding
    on the government, although there may be a political and a moral obligation to
    respect the result.”

    In 1942 Mackenzie King choose the plebisicite as it was sufficient vague.

    Doesn’t matter the viewpoint, you see only vagueness on every aspect of the now “plebiscite”…that is not necessarily the good recipe to get the Yes vote “out” 😉

  • boohoo

    Yes, it’s clear as day the libs will do all they can to prevent this from succeeding. It’s a disgusting abrogation of responsibility and leadership.

    This gov is so single minded in everything they do, it’s short sighted politics at its worst. we’ll all pay for it the end.

  • jenables

    I agree with you, boohoo (did hell just freeze over?) about our horrible provincial govt the masochistic people of BC continue to award. Thank you for the info, voony. I wanted to add the plebiscite bears a remarkable similarity to the ultimate role and authority of the GW citizens advisory council, giving the impression of public consultation but having zero actual influence or power over the issue. Welcome to the new world order.

    If I opened a tapas restaurant called New World Hors d’oeuvre, would you guys eat there? Lol

  • jenables

    I’d like to direct your consideration to this website, before continuing on your roads are for the wealthy campaign:

    http://translinkharassment.wordpress.com/

  • Lysenko’s Nemesis

    Andrew Coyne recently gave a presentation at Simon Fraser University (SFU) as part of their City Studies program and in conjunction with Translink. He explains that transit should be both competitive, for attracting riders, and self financing. Subsidies just create sprawl. He also recommends road pricing. (see link below)

    It seems that the mayors that formulated the plebiscite question only want the road pricing.Andrew Coyne recently gave a presentation at Simon Fraser University (SFU) as part of their City Studies program and in conjunction with Translink. He explains that transit should be both competitive, for attracting riders, and self financing. Subsidies just create sprawl. He also recommends road pricing. (see link below)

    It seems that the mayors that formulated the plebiscite question only want the road pricing.

  • jolson

    The big view, with a big question or two;

    Metro Vancouver was once scattered settlements connected by Provincial roads managed by the Ministry of Transportation. Municipalities are responsible for roads and streets within their boundaries and the MOT is responsible for connections between towns and cities. This is a simple and clear vehicular transportation model matched by funding authority. This model is still with us. Over the years municipalities have extended streets and interconnected them to such an extent that a single metropolitan road network has been developed and is managed and funded by 23 different governance structures plus provincial governance.

    Roads as they have evolved function more or less quite well for car, truck and bus movement. In addition a transit authority has emerged over the years to manage bus operations on this road network. Capital funding for equipment is another discussion.

    Increasing population throughout the region has led to the development of additional transit capacity on an entirely new network of rails. It is the rail network that supports increasing land use densification and offers so much promise in both capacity and speed of mobility while at the same time creating so much civic angst. But why is this? Is it because rail by its’ very nature upsets the old model of municipal boundaries and MOT responsibilities? Is it time for a new frame work for the development of rail and bus services in the metropolis?

  • Lysenko’s Nemesis

    Au contraire, the government asking the mayors to make their own decisions on suggestions for funding, then allowing the citizens to approve is the height of decentralized democracy.

  • Lewis_N_Villegas

    You know, Voony, that C-I-T is really spelled with a SH- not a C- in front.

    Your country men fought a bloody revolution over this issue: No taxation without representation.

    The Mayors need to go back to politics 101.

  • boohoo

    Then make it about all infrastructure. Either lead as you’re elected to do, or let us vote on everything.

  • pwlg

    By “transit investments” you mean urban rail investments and the reason for urban rail investments is for shaping growth according to North American transportation planners.

    The Mayors believe yet again in their own population forecasts. When the previous growth document, “Livable Regional Plan”, was unfolded it estimated 4 million people living in the region by 2020. Under the Regional Growth Strategy that estimate is now 3 million but in 2030!

    Politicians love predicting the future as there is no way of proving the accuracy of the prediction.

    In LA the number of daily boardings on its transit system are mainly on buses, 1.1 million, the rest, 300,000, is on rail, however, many rail passengers also arrived at their train stations on a bus.

    Vote NO!

  • pwlg

    In your Globe and Mail article you state: “…about 1.4-million people
    a day ride the (LA) transit system…”

    If you look again at the stats it does not state that 1.4 million people a day
    ride the LA Metro transit system. The actual number of daily “boardings”
    in LA Metro is 1.4 million but that’s not the same as the number of people.
    Boardings and number of people are entirely different.

    If you have been relying on Translink to educate you on how transit systems
    measure their performance I can understand your confusion. Translink unlike the
    rest of the transit industry calls their boardings “ridership” which
    tends to suggest its the same as people.

    Boardings include all the multiple trips each passenger takes on the system
    each day. Going to and from school and work or shopping would reduce the number
    of people using the system to 700,000 a day, however, there are those who board
    the system more than twice.

    Given the number of people who live in LA Metro, 18 million, the actual number
    of people using the system in LA would be in the order of 4%. I would suggest
    this is hardly a system we should be emulating.

    LA has more than 8 times the number of resident taxpayers and a greater number
    of tourists than Metro Vancouver to pay for their expensive transit plans. For
    the amount of money LA is spending on transit they have yet to make a dent in
    the number of vehicles on the roads.

    The best investment LA has made is in a smart traffic light system which has
    reduce congestion by more than 15% and reduce vehicle emissions by as much as
    30% by keeping traffic moving. For some reason the traffic planners throughout
    BC have decided to engineer congestion and increase tailpipe emissions by
    making vehicles stop at as many traffic lights as possible.

    I timed a recent trip along 41st from its eastern origins at Kingsway to West
    Boulevard on my motorcycle. The trip took 33 minutes, 17 minutes stopped at
    traffic lights and 16 minutes in motion!

    What taxpayers and residents of the Vancouver region should take note of is the
    $7 billion price tag for the wish list is the tip of the iceberg. Imagine putting LRT down King George
    Boulevard, a regional roadway consisting mainly of big box stores, malls large
    and malls small with very little residential density to warrant anything but a
    B-Line type service and priority crossing at all major intersections.

    This whole Mayor’s agenda for transit reminds me of song I heard Pete Seeger
    sing many years ago…the words went something like this…”we were waste
    deep in the big muddy and the big fool said to push on”.

  • pwlg

    By holding a plebiscite, like the Olympic plebiscite in the City of Vancouver more than a decade ago, parties for the YES side or No side are not governed or regulated by the act governing elections so campaign spending et al are not constricted. This means your tax dollars can and will be used to campaign for one side of the question, the YES side, as well there is no restriction on 3rd party advertising under a plebiscite so folks like Rennie and his developer buddies can throw money at this plebiscite because it means the land around future stations will be ripe for more tall out of place towers. If UBC says student population will not grow for the next 2 decades at the Point Grey campus and the poor students who seem to cry because a bus passes them by and have to wait 2-4 minutes for another one why would the region’s taxpayers support the construction of the most expensive way to transport students to their school. And since universities already use satellite campuses to transmit lectures across the province with real time interaction wouldn’t it be cheaper to build a few towers down at the Main and Terminal area to house UBC undergrads where there already exists two rail lines and 6 bus routes within an easy 5-10 minute walk? Has everyone gone nuts?

  • pwlg

    It’s $7 billion dollars for something that will not solve the region’s transportation problems. Can you think of another way to spend $7 billion of taxpayers money for other social needs? And the $7 billion is borrowed money meaning another $4 billion in interest charges will accrue over the loan’s lifespan. $11 billion folks…time to question priorities for spending your hard earned tax dollars!

    If the elderly and disabled have to wait 2 days to access the Handi-Dart system what are students who already receive a deep discount for the U-passes crying about when they wait 2-4 minutes for another bus? Get a grip folks! Or how about Surrey residents who use SkyTrain, nice getting a rather rapid trip along the line but if you have to transfer to a bus after arriving at your station and the bus wait is 30 – 60 minutes what have you actually gained?

    Translink’s budget is now over $1 billion annually, an 80% increase since they took over the transit system on April Fools Day in 1999. Hey, an idea, why not have the plebiscite on April 1st? How appropriate!

  • pwlg

    And what did the public get when it financed the Canada Line, a $2.4 billion subway system with 2 car trains! Underground stations that cannot facilitate additional cars without more expensive underground excavation. In a rush to complete for the Olympics we got a tiny weeny metro system for a big price tag.

    When all the plans for urban rail are completed, governments will have invested more than $22 billion, more than $7 billion already invested on the Expo, Millenium, Canada and Evergreen Lines, and yet the number of vehicles on the road continues to increase or haven’t you noticed?

  • pwlg

    Where’s the democracy when the local governments have already decided and have created a coalition of self interested parties, those standing to make profits from land speculation and development and union building trade jobs during construction, to heavily finance a “communication strategy”, or more apt, propaganda, without any real discourse or discussion taking place. Surrey should rezone King George Boulevard to increase density and serve the growing density with B-Line buses until the buses are running bumper to bumper and Vancouver could route more buses on other East West routes that already meet up with rail stations to decrease volumes on Broadway. If you’re going to build any rail in Vancouver it should be extending the Millenium Line to Cambie so it meets up with the Canada Line. Make sense?

  • pwlg

    The trouble is, if they do institute road pricing the 650,000 vehicle owners who use their regional roads to get to work etc would see to it all of the politicians are replaced come 2018! And that’s why all US cities have sales tax referendums and/or license plate fees to pay for their urban rail projects. Who has instituted road pricing?

  • pwlg

    And will we pay for the bike lanes with lane pricing and bicycle levies?

  • pwlg

    The current source of revenue for Translink relies on more than 1/3 or $300,000 a year coming from motorists who use their vehicles and purchase fuel in the region. Another 1/3 comes from property taxes and the last 1/3 comes from transit users in fares. Those driving their vehicles are already being taxed so that others who do not can have their transit trips subsidized by them and their bicycle lanes built. We’ve had an increase of more than 150,000 more vehicles on the region’s roadways during the rush period since we invested $7 billion on urban rail infrastructure. If spending $7 billion already didn’t solve any problems why would folks think spending another $7 billion will solve the problem when an anticipated but questionable 1 million more people arrive and live in the region? This is why $7 billion is just the tip of the iceberg. If you thought living in the city was expensive now just wait.

  • boohoo

    pwlg,

    You seem quite…keen. What’s your alternative plan? Like Bateman and other ‘no no no’ parrots, it’s very easy to shit on everyone else’s plan but remain silent as to an alternative.

    So, let’s hear it.

  • spartikus

    On the other hand, as an article published today in The Atlantic`s City Lab section points out, gas taxes on motorists don`t even remotely pay the `true cost of driving` ie. the externalities. Using the numbers from that article I calculated Lower Mainlanders would need to pay another 90 cents/litre.

    http://www.citylab.com/commute/2015/01/the-real-reason-us-gas-is-so-cheap-is-americans-dont-pay-the-true-cost-of-driving/384200/

    Motorists are subsidized. Heavily.

  • spartikus

    When the previous growth document, “Livable Regional Plan”, was unfolded it estimated 4 million people living in the region by 2020.

    The actual quote is:

    “In 1999, the population reached two million, and nearly one million more people may live here by the year 2021.”

    http://www.metrovancouver.org/about/publications/Publications/LRSP.pdf

    The current population of Greater Vancouver is 2,451,783. If it increases 1.5% a year (as it has been, approximately) it will easily reach 3 million by 2021.

    As for 4 million, you may be confusing this with a different quote from Liveable Regional Plan”

    In 1960, the Georgia Basin/Puget Sound bioregion was home to 2.6 million people. By 1996, the population had risen to over 6 million. By 2020, there may be an additional 3 to 5 million more people living and working in this area

    In others, Greater Vancouver AND Greater Seattle plus everything in between.