User fees on roads, sewers and stormwater facilities are necessary to impress on people that they are dealing with scarce resources says Harry Kitchen. The municipal expert sees user fees as a logical response to the infrastructure deficit that is plaguing cities and advises senior levels of government to require them before bailing out cities.
Kitchen is renowned in some quarters and reviled in others for recommending in 2008 that Ontario slap tolls on its major highways and expressways, including the Linc and the Red Hill Valley Parkway. Notably unrepentant, he spoke to the Transport Futures 2011 Mobility Pricing Conference in Toronto last week.
“You need user fees so that the user realizes that the resource in question is scarce,” he argued. “In that way, it’s not overused.”
As recently reported in CATCH, Hamilton has about $15 billion in infrastructure with roads comprising the biggest portion. The cash-strapped city is currently managing to replace only one per cent of its roads each year, generating squabbles between urban and suburban councillors over whose roads should have priority.
Kitchen noted that there was “a growing tendency” for people to at least think about road-tolling, especially the younger crowd. Older people, long habituated to use of cars, are more resistant, he observed. But road tolling is coming, he and other speakers at the conference agreed. It’s a question of when.
The January 17 issue of Macleans, Canada’s conservative-leaning national magazine, carried a six-page article making the case for road tolling. According to writer Andrew Coyne,“…whether we are talking about cars, or buses, or tennis rackets…people make better decisions when they know what things cost. Right now the true cost of using roads is hidden, leading people to drive more and in different ways than they would if they were better informed.”
Coyne pointed to the success of Highway 407, Ontario’s only tolled highway. He speculated that had Highway 401 been tolled when it was first built, it may not have been necessary to build Highway 407.
In his conference talk, Kitchen was dismayed that about 13 per cent of municipal spending in Canada is for roads, but less than 4 per cent goes to public transit.
Hamilton city council was recently told that transit reductions since 1989 included a loss of almost 770 hours of bus service per week. That was part of a debate that saw councillors again refuse to approve an extra $3 million to improve HSR service.
Kitchen said that if roads were “properly priced,” it would be possible, for example, to also have zone charges for transit – and impose extra charges for journeys along certain high-traffic routes and lesser chargers for low-traffic routes.
He also focused on water and sewer systems as examples of other public services that are irrationally priced. Noting that only about 60 per cent of Canadian homes have water meters, he concluded unfair pricing is often the result.
Kitchen issued a warning about the so-called “infrastructure deficit.” He said senior governments should not rush to give grants to municipalities for infrastructure until they implement ways to recover costs.
The result of not doing so is, for example, is over-built water systems “where municipalities receive $.75 for every dollar spent.”
“Asset recovery costs” need to be built into pricing for infrastructure, Kitchen said. “Until we start to properly price for a service, that service will be overused and oversized assets will be the result.”
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