Vancouver follows other North American sales tax transit referenda

Vancouver is not the first region to use sales tax to fund transit improvements.

We all love to have less congested roads, more frequent public transit services and a better network of roads, but these infrastructures are usually well behind what the society demands.

 

One reason is lack of sufficient funds to implement these projects. Infrastructure and transit projects are complex and often cannot be funded just by governments; therefore, users are occasionally asked to help finance these projects through different measures. Some of the more common methods are congestion charging, vehicle registry pricing, fuel tax and sales tax.

These financing methods are based on the idea that users should help pay for services they use.
Covering Utility Installation

 

 

The sales tax method works like this: By dedicating a certain amount of tax to transit and spreading it among a region’s entire population, all users pay less, and all users benefit from the improvements. Sales taxes are paid continually throughout the year rather than a lump sum amount like vehicle licence fees. It is not just public transit users who benefit from improvements such as more frequent bus services or better rail systems. Car drivers encounter reduced road congestion and save time and fuel due to better transit services. Improvements of bike lanes and pedestrian pathways and sidewalks also enhance the safety and livability of the region as a whole.

Vancouver is not the first city to put a sales tax increase dedicated to transportation projects into referendum.

In late 2014, a similar referendum was approved in Seattle — 59% of voters approved a plan to increase sales taxes by 0.1% to reduce bus crowding and provide more frequent bus service. In addition to the mentioned 0.1%, users will also pay a 60-dollar annual car-tab fee.

The revenue generated will help fund:

  • More service hours
  • Busy cross country buses
  • Cash reserves
  • Aids for low-income riders

Los Angeles County is another successful example of voters strongly (68%) in support of a 0.5% sales tax increase for a period of 30 years to improve their transit system.

The money is expected to be spent as follows:

  • Capital projects like rail new rail and rapid bus transit
  • Highway capital improvements
  • Bus operation improvements
  • Facilities maintenance

In addition to the more recent examples above, 33 U.S. states have authorized local option sales tax use for transportation projects.

The citizens of these areas consider the value of transit and are willing to pay to fix the existing problems and expand their network.

Among the different ways of funding transit projects, local sales tax is considered the most fair method because it is imposed on expenditure rather than income.

Metro Vancouver is also following many other cities which have implemented sales tax increase to finance improvement of transportation systems. Among the projects to be funded by this revenue generation are a new subway line along Broadway in Vancouver, a light rail line in Surrey, a new Pattullo Bridge and improved bus and SeaBus services.

If the referendum fails, the result will be more congestion, pollution and longer commutes in the region. This will negatively impact the economy and growth of the region. Our road and public transit network will bear more pressure due to increasing population and lack of funds to expand.

On the other hand, a yes vote will allow enhancement and expansion of public transit, thereby removing more vehicles from streets leading to less congestion, lower pollution, shorter wait times and a faster commute — all of which translates into a growing economy for Metro Vancouver residents.

 

Author

Mo Askarian is a recent graduate from the University of British Columbia. He holds a Master’s degree in transportation engineering.