A brief history of financial transit choices

First of all, I'll make an announcement for those who don't already know that there are two consultations coming up that are pretty important for transit users and pretty much anyone who leaves their house from time to time. Most of the details are in this Torontoist piece. Basically, they both have to do with transit, and how to fund it.

This transit map is empty, dagnabbit!

Metrolinx (who don't make these consultations very easy to find - or re-find - on Google) is holding a few throughout the GTA and beyond (or GTHA, for the Toronto-is-not-the-centre-of-the-Universe people), including a couple in Toronto proper. If you haven't already played with Metrolinx's neat online tool that shows you how much fun it is to raise taxes, you should. I'd imagine it's the home-game version of the consultations, without as many cranky long-winded people (depending on who else is in the room with you when you go through it at home). Anyway, circle your calendar for Feburary 9 at Metro Hall. A few days later, you can hang out with Toronto's chief planner Jennifer Keesmat and tell her what you think about almost the same thing. I will say the Feeling Congested initiative deserves credit for actually making an effort at getting people involved in a way we rarely see from the Toronto's municipal government, and just about the best website I've seen with a City of Toronto logo on it.

But I'm actually not going to say much about what these consultations and the general movement to generate new "revenue tools" are about. For one, others are doing a decent job of covering and examining it so far. I will say that parking levies are a no-brainer, and I have conflicting feelings about others, but I'm generally supportive of nearly anything that breaks Toronto transit users unprecedented reliance on the farebox,

It's worth being hopeful when the new premier, Kathleen Wynne, lists easing gridlock as a top priority. But it disturbs me when she says, as she did during her interview on Metro Morning earlier this week that "there are going to have to be new revenue tools" to build transit. This seems to be a too-often repeated attitude that we have no other option, and that the powers-that-be somehow stumbled into this situation that no one could have predicted - except that everyone has been complaining about gridlock and a lack of transit in Toronto for years. The truth is that government, especially provincially and federally, has failed to take responsibility for its past mistakes by failing to take advantage of old revenue tools.

So, to recap the basics, we supposed need 50 billion across the region for the Metrolinx "Big Move" over 25 years: that's 2 billion a year.

Edward Keenan makes a good argument in favour of using sales tax as a revenue tool by arguing that we could pay the same sales tax rate as 2006. But hey, some other taxes have changed since 2006. And what raises more taxes in Ontario than sales tax? Income tax.

Gratuitous chart. Curiously no mention of gravy as a major expenditure.

To be fair, income tax is a solution as part of the "Feeling Congested" consultation to an extent. But I don't even need to go back as far as 2006 to get money from income tax in Ontario. I could just go back to 2010 when McGuinty cut income tax by 1% on the first $37,106 of taxable personal income. How much did this take out of Ontario coffers? Nearly 4 billion a year.

A little more math for those who think Toronto shouldn't get all that money...
Population of Ontario: 13,505,900
Population of GTHA: 6,574,140 
Notice that's roughly half. And roughly half of McGuinty's 2010 tax cuts equals... $2 billion per year! Exactly how much the Metrolinx "Big Move" will cost per year. That was way too bloody easy for all this hand wringing and "new revenue tool" talk.

I just figured out how to buy a crapload of these. You're welcome.

Yes, reversing that particular income tax cut would essentially raise taxes on the poor, but so does raising sales taxes to an extent. Our current income tax system overall is actually quite progressive, and an income tax increase can easily be structured to also work towards lessening the increasing gap between rich and poor. This is what the NDP compromise budget with the Liberals did less than a year ago, raising nearly $500 million a year by raising taxes on those making more than $500,000 per year, and that policy is hugely popular. That money all went to reducing the fiscal deficit, but it could have gone towards reducing our transit deficit. Why take a risk on new revenue tools when we know there are old revenue tools with the potential to be popular, and are so effective at raising lots of revenue?

 All this shows how there are lots of ways to use income taxes to raise lots of money quickly, if you have the political courage. This is something the Ontario Liberals, thus far, have had difficulty with.  It's why it's hard to believe that Kathleen Wynne is serious about easing gridlock when her government could have done so much more over the last 8 years. And to say that new revenue tools are the only way shows an alarming myopia about how to raise revenue.

Some of the new revenue tools being discussed certainly have their merits, such as potential environmental and social benefits. But they also have their pitfalls. And sometimes it's hard not to feel like politicians are forcing a bunch of new taxes on us with a different name because they're afraid to raise the old-fashioned taxes that built so much of what once made Toronto an enviable place for public transit.

I haven't even gone into past income tax cuts in the Harris years, or other falling taxes such as corporate taxes. Maybe I'll save that for a future post. In the meantime, go out and support new revenue tools at consultations, with your local representatives, and with your neighbours. But don't let anyone tell you theses "tools" or taxes or whatever are better just because they're "new."