Remember this phrase: funding allocation formula.
Last week, before Dalton McGuinty dropped his bomb, everyone piled into the transit financing debate and I’m told that more blue chip advocacy is on its way. The mayor’s executive committee ordered up a consultation on revenue tools. John Tory’s band of civic white knights came out with a savvy campaign (“Your 32”) designed to get residents to focus on the individual opportunity cost of all that gridlock.
Even Tim Hudak threw in his two cents (although not much more).
But as the executive committee debate illustrated, we’re headed straight into the weeds of this monumentally complicated policy fix. One of the trickier themes that surfaced: how much of this new funding will be spent inside the City? Or less politely, shouldn’t money raised inside the 416 be spent inside the 416?
So let’s have at it:
Everyone, save the brothers Ford, is talking about earmarked regional levies; even Hudak, trawling for seats in the GTA, said in his City Hall scrum on Tuesday that he’s prepared to listen what the public has to say about revenues tools. But as this debate begins to take shape, we will almost certainly back into a political knife fight over who gets what, and the mechanics of deciding how, where and when future funding streams get (re)distributed within this vast urban area.
I’m not a tax expert, but I’d predict this story will vary sharply according to the type of tax measure being considered. For example, if the province imposes an L.A.-style sales tax just for the GTA and Hamilton, the burden will probably be distributed fairly evenly, and it will be closely connected to population distribution. The same, I’d guess, is true for a vehicle registration tax.
But what about tolls and parking levies? It’s entirely likely that one group of residents will end up contributing a larger chunk of change than another. The suburbs have lots of parking and so I’d expect that a parking levy would hit outlying commercial property owners (and thus their patrons or tenants) harder than those downtown. Commuters who work in the 905, or 416ers who do a reverse commute, will likely pay the lion’s share of a toll on the 400-series highways. If there’s a congestion charge for the core, the burden will be mainly felt, I’d guess, in affluent neighbourhoods such as High Park, North Toronto or The Beach.
Now ask yourself this: if you live downtown and don’t drive — or don’t drive much — how much will you contribute each day? Conversely, if you shop at Wal-mart, commute to Newmarket, and operate two cars because your subdivision isn’t close to anything, could you be dinged multiple times every single day? And what about income level: should we worry about whether these tools are regressive?
Equity, surely, should count for something.
Maybe I’m over-analyzing, but it seems to me that at some point, someone (i.e., Metrolinx) has to come forward with models and funding allocation formulas that illustrate to the public where in the region the different tax streams will come from…and where the proceeds will end up. After all, everyone expects to know what they’ll be getting for these extra fees, and that’s not an unreasonable demand.
It will not be sufficient for Metrolinx/CivicAction/Board of Trade to point to the pretty maps in The Big Move and say, “Here, look, there will be something for every corner of the GTHA once we’re finished 30 years hence….” Nor can Torontonians revert to the old argument about how ridership – 90% of all GTA transit trips take place inside the 416 – should determine where the funds are spent.
If 905 residents end up contributing the lion’s share of the new dollars, but most of them flow into tunnels in downtown Toronto, no amount of soothing talk about improving the regional transportation network will halt the political backlash.
Thus the question of how to allocate new funds in an equitable way that produces real improvements for the outlying areas becomes incredibly important. Yes, the [Insert Euphemism Here] Relief Line is crucial. But the revenue tools must be politically sustainable if the goal is to deliver stable, long-term funding.
Therefore, in order for this consultation process to become meaningful and engaging rather than divisive and stupid, Metrolinx must begin thinking about adding layers of detail to the revenue tool proposals it is cooking up for next June.
The agency, ideally, should be able to come forward with some reliable modeling data demonstrating how the tax burden will be distributed, geographically and from a socio-economic perspective. It should address the question of how one type of revenue could balance out another. And, crucially, Metrolinx ought to work up much more detailed project priority lists and construction timelines, as well as case studies illustrating how the new taxes and services would impact people and families living in different parts of the region and in a range of circumstances.
The genius of CivicAction’s Your 32 campaign is that it brings those oft-cited commute times stats home, as it were, and turns that impersonal $6 billion productivity loss estimate into a more specific cost. There’s a good lesson there: As Metrolinx trudges towards next June, and with the advocacy community now fully engaged, the agency would be well advised to start painting a highly detailed picture of what these new “tools” will mean for all of us, both in terms of cost and benefit.
This scheme is going to be a very tough sell. If the city and the province truly want a constructive debate, they’re going to have to be as forthright as possible with a lot of people for whom these “tools” are just another damn tax. If it doesn’t compute at the household level, the revenue plan will never reach the floor of the provincial legislature.