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Dec 11,2008 - Tri City News

A tax on cell phone use in the Lower Mainland is just one of 28 possible new taxes or revenue sources TransLink is eyeing to refinance the transit system.

The cash-generating ideas include a vehicle levy and road tolls as well as various new taxes that could jack up the cost of hotel rooms, business licences and land development not to mention a sure-to-be-contentious "cell phone levy."

Officials say the list of potential taxes and fees is for discussion only and will be pared down to between five and 12 sources to be seriously pursued in the new year.

But Metro Vancouver mayors who got a first look at the list Wednesday said they'll be pilloried if they're asked to approve new levies that will provoke fierce opposition.

"You're talking about starting a war there's going to be lynch mobs coming for us," warned Port Moody Mayor Joe Trasolini at a meeting of the Mayors Council on Regional Transportation.

"A cell phone levy?" he asked. "For transportation? I can't connect the dots."

TransLink needs to find an extra $150 million a year just to sustain the system as it now is and $300 to $500 million to launch an aggressive transit expansion to serve regional growth and fight climate change.

But Trasolini and other mayors said they need the provincial government to indicate what new revenue sources Victoria would consent to TransLink using.

They said it's otherwise pointless to inflame the public by proposing new taxes that might ultimately be shot down by the provincial government as happened in 1990 with TransLink's original $75-a-year vehicle levy and again last year when a reviled parking stall tax was dismantled.

"Give us an inkling," Trasolini said. "We know what galvanizes opposition. And there are so many of them there that would make our lives miserable and not get us anywhere."

The potential new sources listed by TransLink include another parking tax, as well as making developers pay higher charges on new construction, hitting shoppers with a "local sales tax" or charging visitors a hotel tax.

No fewer than eight sources would target motorists, on the basis that discouraging driving can also boost transit use and cut emissions.

Just owning a car could mean higher payments to TransLink through an annual vehicle fee, a vehicle registration surcharge or distance-based insurance (those who drive more pay more).

Drivers might have to pay various bridge or road tolls. A London-style congestion charge is being considered, as is charging a toll for use of HOV lanes by lone drivers (a concept called HOT lanes).

Richmond Mayor Malcolm Brodie called it a "long list" that looks "mostly unacceptable."

He said the province must instead provide money generated outside the Lower Mainland.

Surrey Mayor Dianne Watts said the province shouldn't have scrapped the tolls on the Coquilhalla Highway and could look at reinstating them.

"The tolls could have stayed on and gone into transportation for the whole province," said Watts, who was re-acclaimed chair of the mayors' council.

Others noted the Bill Bennett Bridge was built in Kelowna as a free bridge, in contrast with every major new or rebuilt bridge planned here.

"The partner who has to be at the table with more funding is the provincial government," added Burnaby Mayor Derek Corrigan.

No details were provided on specific sources on the list or how they'd be implemented.

TransLink CEO Tom Prendergast said he wants to end up with five to seven different new funding streams that will be sustainable and diversified.

"We know it's going to be tough but we've got to find a way to get there," he said. "The region's long-term survival is at stake as a place people want to live and work in."

He said provincial government officials have been briefed on the possible funding sources, and he said they're not happy about some of them.

The Property Transfer Tax, levied when real estate changes hands, put $375 million into provincial coffers from Metro Vancouver land sales.

But Victoria has responded cooly to the idea of sharing that with TransLink.

"I'm sure they'd like me to take the Property Transfer Tax off (the list)," Prendergast said.

Metro mayors would have final say next summer on approval of the new taxes and the expansion package they would finance.

If they said no to the tax measures and the expansion, TransLink's board would proceed with a "base case" to run the system with existing resources.

That would mean deep cuts to transit service taking it back to 1974 levels, according to one internal estimate as well as the scrapping of major rapid transit expansions like the Evergreen Line.

TransLink is already starting to outspend its finances as it takes on higher operating costs of new projects like the Canada Line and adds more buses to its fleet.

A $103 million budget shortfall next year is to be drawn from TransLink's reserves, which will be depleted by 2011.

Possible funding sources:

(TransLink plans to winnow this list to five to 12 options in the new year and then seek to implement around six sources.)

Vehicle Fees

- annual vehicle fees

- vehicle registration surcharge

Road User Fees

- congestion pricing

- facility tolls

- distance based

- cordon tolls

- HOT (High Occupancy/Toll) lanes

- distance-based insurance

Revenue from Land Use

- real estate revenue

- development charges

- benefiting area tax

- parking site tax

- land value taxation

- tax increment financing

- Property Transfer Tax

Consumption Taxes

- hotel tax (tax on accommodation sales)

- local sales tax

- utility fees

- cell phone levy

System Revenues

- sponsorship

- new advertising opportunities

- transit fare products

- carbon offsets

Other Sources

- tax-free bonds

- business licence fee

- commuter tax

- payroll tax

- income tax

Source: TransLink

(New revenue options don't include existing ways for TransLink to raise more money. It can boost transit fares and property taxes by about two per cent a year, and it can increase the fuel tax in the region by another three cents per litre.)

jnagel@surreyleader.com

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