Comment 60370

By adrian (registered) | Posted February 28, 2011 at 09:30:45 in reply to Comment 60343

Area rating only applies to the tax levy base...it does not raise $$ towards any cause. The article points out that HSR is "starved for funding"; area rating is not going to solve this. If the cost to operate HSR is 'x' dollars today, the formula to offset that cost is our current area rating format. Regardless of what the new area rating will be, the amount of tax levy raised towards HSR will still equal 'x'.

That's only true if we decide to make it that way. We're not talking about a law of physics here, we're talking about political decisions about how best to run our city. If we decide that it should actually equal x + y, where x is what we currently pay the HSR from the levy, and y is what other wards could conceivably contribute if we decided to expand service while instituting taxation fairness, there is no reason we cannot do so.

That's what Ryan recommended when he wrote Area Rating Reform Should Not Be a Zero-Sum Game:

A number of sources at the city have informed me that the staff report is now in circulation. Unfortunately, I'm told the report recommends equalizing transit tax rates by reducing the old city's rate and increasing the other area rates so that: a) they are all equal and b) the change is revenue neutral.

Talk about a recipe for conflict. Instead of increasing suburban transit tax rates to put more operating money into the HSR, we're increasing suburban transit tax rates to ... cut urban transit tax rates? Suburban ratepayers are sure to cry foul.

The main purpose of equalizing tax rates should be to increase the revenue coming into the system so the city can afford to improve service. Making transit tax into a zero sum game simply pits urban and suburban ratepayers against each other yet again with, ultimately, nothing new to show for it.

I agree with Ryan on this point.

Re. "this particular piece contains some misleading statements", what other statements are you referring to? At no point did I set out to "mislead" anyone, but if I inadvertently made any errors, I'd be happy to set the record straight.

Comment edited by administrator adrian on 2011-02-28 09:30:58

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