Transportation

Burlington to Recoup Some Driving Costs

By Nicholas Kevlahan
Published April 15, 2010

Interesting article in today's Spectator: it seems that Burlington is finally realizing what a massive subsidy the City provides to drivers, and is trying to recoup a little bit of this "negative externality" cost.

Effective April 12, the [Burlington] fire department started billing residents involved in a motor vehicle accident within city limits.

Under the city's fee structure - approved in the 2010 budget - a $350 flat rate will be divided among the drivers involved in an accident - regardless of who is at fault - in which the fire department responds.

And that's just the start.

The cost of materials used during accident response will also be divided among the drivers involved in the accident.

It's curious, however, that this charge would be reimbursed by the insurance companies, thus creating a new negative externality (although it is at least restricted to drivers).

It would seem to make more sense for these charges to be non-reimbursable by insurance companies, since they are not severe risks that should be spread over all drivers.

As has been pointed out on RTH in the past, the cost of automobile accidents (e.g. police and other emergency services, medical costs, damage to infrastructure, lost wages ...) is enormous and (up until now) has been mostly paid through general taxes rather than by taxes or charges paid directly by drivers.

Given Hamilton's large road network and shortage of funds for important projects, it would be gratifying to see Hamilton follow Burlington's lead. But don't hold your breath!

Nicholas Kevlahan was born and raised in Vancouver, and then spent eight years in England and France before returning to Canada in 1998. He has been a Hamiltonian since then, and is a strong believer in the potential of this city. Although he spends most of his time as a mathematician, he is also a passionate amateur urbanist and a fan of good design. You can often spot him strolling the streets of the downtown, shopping at the Market. Nicholas is the spokesperson for Hamilton Light Rail.

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By Rick (anonymous) | Posted April 15, 2010 at 14:57:13

Hamilton has been charging for services for a number of years to people who do not pay taxes to Hamilton. That includes the province for calls to provincial highways. They have been reluctant to charge citizens of Hamilton. They are afraid that people will not call because they may be charged or there will be a fight from the person who is charged saying that they did not call. In some poorer parts of the city, it becomes a bourdon to people as they may only have minimal insurance that will not cover the bill. In some parts of the city, the emergency services are the only ones who will come and help.

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By bigguy1231 (registered) | Posted April 16, 2010 at 17:59:27

Having been an insurance adjuster many years ago I know that many municipalities have charged non residents for the services of fire departments. Most municipalities however, do not charge residents for services already being paid for through property taxes.

If they are going to start this nonsense then lets make other municipal services pay per use as well. I am sure it could be instituted for many municipal services. We could start with something like public transit, cut the subsidies and make the users pay the whole cost through fares. I am joking of course but you can see where this is going.

We already pay for these services through our taxes so basically what they are going to do is tax us twice for the service being provided and disguise it as a user fee.

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By kevlahan (registered) | Posted April 16, 2010 at 22:33:49

Well, that is exactly what a user fee is: instead of everyone paying for a particular government service through general taxes regardless of whether they use it or not, those actually using the service pay more (or all) of the cost. Obviously residents are not being taxed twice: the tax dollars that would have gone to paying the cost of dealing with the accident can now be spent somewhere else (or even used to lower taxes).

In recent years governments have introduced user fees on all sorts of things that used to be paid out of general taxes (e.g. water is metered, and we pay to visit conservation areas).

In particular, the user fees for public transit are actually quite high in Canada compared to other countries. In Hamilton, users pay about 55% of the total cost (compared to about 30% in most other G8 countries). In comparison, drivers pay nothing directly towards local roads through user fees (gas taxes fund provincial and federal roads; municipal road maintenance and construction is paid from property taxes).

Perhaps asking drivers to pay 100% of the cost of emergency services is too high, but it does seem strange that user fees for drivers (e.g. road tolls or even parking taxes) are anathema, while they are (albeit grudgingly) accepted for other services.

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By alrathbone (registered) | Posted April 17, 2010 at 13:33:50

Does anyone not notice the only BAD part of this whole thing?

It doesn't matter who's at fault. You both get billed.

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By bigguy1231 (registered) | Posted April 17, 2010 at 19:25:36

Kevlahan

If we are going to pay user fees for municipal services then they should do away with property taxes altogether. Don't disguise additional taxes as user fees.

I would be more than willing to pay the cost of the sevices I use on a pay per use basis if they do away with municipal taxes. Let's make people pay for police and fire services on a pay per use basis for all emergency calls then. If you get robbed it's going to cost you to call the police. If your house is burning you will pay for each unit that responds to the call.

A car accident is an emergency just like a robbery or a house fire why should it be financed any differently than either of those.

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By Genius (anonymous) | Posted April 18, 2010 at 00:05:21

If you don't want to pay, don't get in an accident - take the bus

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By kevlahan (registered) | Posted April 18, 2010 at 12:20:47

I'm not sure if I really agree with user fees for government services, but the choice is not between all user fees or all general taxes.

I think the idea is that when only a relatively small proportion of the population uses a particular service (like emergency response for traffic accidents), or if the service is a "luxury" (like public golf courses), or if we want to make more efficient use of a finite resource (like water or road capacity) then user fees make sense.

When almost everyone uses a service, and it is not a finite resource then user fees don't make sense and it is better to fund out of general taxes. For example, in the UK there is a license for TVs (to fund the BBC), but they discontinued the license for radios (since radios are so cheap and radio is cheaper to fund than TV).

Each case needs to be examined (and re-examined periodically) to see if a partial or full user fee is justified. Another example is the attempt in the 1980s to add a relatively small user fee to doctor visits to encourage better use of this (expensive) resource. Quebec has recently revived the idea.

bigguy1231,

The problem with doing away with general taxes altogether is that you still benefit indirectly from some services even if you don't use them yourself, and it would be very hard to bill everything on a per use basis. For example, you benefit from having a police service, from public education, from public libraries even if you don't actually use these services yourself because your standard of living relies on the sort of society that these services provide (an educated workforce, safe streets, an informed and educated public).

Historically, governments took over many social services during the 19th and 20th centuries because relying on piecemeal provision of these services by charities was causing society to break down (and was bad for business). See

http://www.raisethehammer.org/article/54...

for a review of how this process happened in Victorian England.

It's important to remember that we know exactly what an industrial society with minimal regulation and social services would be like: it would be like early industrial era in Europe and North America.

Comment edited by kevlahan on 2010-04-18 11:22:06

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By woody10 (registered) | Posted April 18, 2010 at 18:25:59

Ok, well although $350 isn't that much (fire departments rate out at $350 PER hour) it will no doubt increase our already too high insurance costs. Not a problem you say, just don't get in an accident. But we all know even if you are the best driver somebody can hit you, and you know the insurance boys won't let you get away with it. And Bigguy1231, how do you charge user fees for things like your house being beside a house that is on fire?? They have to protect it so.... Or a car crashes into your house?? or.....????? And lets talk about medical calls. You fall down and bang your head, your neighbour calls 911 and all 3 show up, police/fire/ambulance, pretty costly. You refuse treatment but you will still be charged. Or what if you need an ambulance and you're wife/husband doesn't want to be charged, hmmm, not nice.

Comment edited by woody10 on 2010-04-18 17:31:12

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By frank (registered) | Posted April 19, 2010 at 13:59:00

Genius wrote: "If you don't want to pay, don't get in an accident - take the bus"

Not much a genius...take a look at the definition of "accident". Accidents are accidents. I'd much rather see a modest increase in the emergency services portion of my property taxes than a user fee.

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By frank (registered) | Posted April 19, 2010 at 14:05:40

I know many people (and that would most likely include me) wouldn't pay without fighting... The bill for a lawyer/litigation costs would outweigh the money earned by fining. When you're in an accident, the at fault party most likely gets a ticket and both your insurances go up, now there's an additional user fee? IMO, a user fee should be something I choose to subject myself to (membership to a gym, Blockbuster rewards membership etc) not something I may not have any control over...

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By No Fault (anonymous) | Posted April 19, 2010 at 22:37:02

"Accidents are accidents."

Someone better tell the police and the insurance industry because usually someone is at fault meaning the "accident" could have been prevented.

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By frank (registered) | Posted April 20, 2010 at 08:39:28

"Someone better tell the police and the insurance industry because usually someone is at fault meaning the "accident" could have been prevented."

Exactly, however that doesn't make them any less of an accident especially for the person who wasn't "at fault". If you go out planning to hit someone or be hit by someone, it's not an accident. Otherwise it is...

Here's the relative definition: "An unexpected and undesirable event, especially one resulting in damage or harm". Note the lack of "unpreventable" in the definition there??? Figure it out for yourself and stop trying to play semantic games - I promise you'll lose.

Comment edited by frank on 2010-04-20 07:47:12

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By frank (registered) | Posted April 20, 2010 at 08:55:04

I can't change the comment anymore but edit the second paragraph to:

"Exactly, however that doesn't make them any less of an accident especially for the person who wasn't "at fault". The only time an accident isn't an "accident" is when you PLAN to hit or be hit by someone. Even then it is an accident to the other person and according to this stupid idea you'd both be paying... If you don't plan to hit someone and still do through some unplanned circumstance, it's still by definition an accident."

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By Rex (anonymous) | Posted May 08, 2010 at 10:51:10

So the person not a fault pays also? Ya, makes total sense. So if someone is drinking and driving and accidently hits your car while you were driving with your family and one of your loved ones was killed in the car as the result of the accident, the people who got hit should pay? Hmmm...

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