Reversal of transit fortunes
Declines in gas tax cash, ad revenues stall city budget
June 23, 2010
Meredith Macleod
The Hamilton Spectator
http://www.thespec.com/News/Local/article/794480
A declining share of the province's gas tax money and a hit to advertising on buses and bus shelters will drive a hole of more than $500,000 through the city's transit budget next year.
"We have pretty significant pressures coming in 2011," said Hamilton's transit director, Don Hull.
In 2010, the province is sharing $316 million in gas tax funding with 93 municipal transit systems. Hamilton got $10.8 million of that. That was down from the $11.1 million the city got the year before.
The city won't know definite numbers until the provincial budget is finalized next April, but it's expected the allocation for 2011 could be down another $300,000.
Along with that, a soft market for advertising is expected to hit the Hamilton Street Railway's ad revenue by about $225,000.
"We're certain the revenue will decline but we're not certain how much," Hull said.
Transit systems nationwide are bracing for the blow but Hamilton is unlucky to also be renewing its 15-year contract for the ads splashed across buses and in shelters next year.
Hull says the province's gas tax allotment formula is also unlucky for Hamilton. The formula weighs population change at 30 per cent and ridership change at 70 per cent in order distribute the two cents a litre of gas tax revenue.
Hull says places such as Toronto, York and Brampton have strong population growth, increasing traffic congestion and have made big investments in transit that immediately boost ridership.
But he argues that if the province looked at returns on investment, Hamilton would rank very well.
"Hamilton's return on investment is as good or better. We're getting new ridership in strong numbers compared to our investment."
In the first quarter of 2010, ridership is up about 1.9 per cent, after a decline in 2009.
Hull says the 2009 gas tax revenue was used to offset a fare increase and to fund $8.1 million in service enhancements -- including more trips on the B-Line and accessible transit and new routes on Rymal, Wentworth and in Waterdown. The remaining $3 million was used to buy buses.
Hull and his staff will present a report to council in August that will outline ways to offset the hits to the HSR's budget for next year.
Councillor Brian McHattie wants to see the $3 million in gas tax money going to capital funnelled into boosting service. He says adding routes and increasing frequency where needed is the best way to grow ridership. "Investments could protect our provincial gas tax money."
He's anxious to see the results of a route rationalization study last year that could point to places to reallocate services.
"There are routes in the Kirkendall neighbourhood that haven't been touched in 30 or 40 years. For instance, you can't go up Dundurn to the Fortinos plaza ... That would drive ridership numbers."
The transit system's overall budget for 201o is $85 million, $43 million of which is paid by Hamilton taxpayers.