LARRY'S CORNER- Hamilton's Former Mayor Speaks

Harmony or Fairness: The ‘Area Rating’ debate (Part One)

By Larry Di Ianni
(posted August 8, 2008)

On November 28, my blog essay referenced area rating in the context of paying for public transit. I then said that the topic merited an article of its own. As the city is set to debate this taxation principle which has been in place since amalgamation, now is a very good time to weigh in on this topic.

It is unfortunate that some members of Council have framed the debate as being one of ‘harmony’ for the new city, or ‘fairness’ for the citizens of the former city of Hamilton. Harmony is an excellent objective; fairness is always a necessary outcome. The two need not be mutually exclusive. Framing the debate in a combative way seems to suggest that one can’t achieve both objectives when that is precisely what is needed in order to build a strong city.

Good for Scott Duvall for having realized this and forging a strategy that all sides could agree with.

First a refresher on what Area Rating is. If you look at the city documents it tells you this:

“Area rating is used to assign specific program costs to different areas within the City. For example, if you live in an area where there is no bus (Hamilton Street Railway) service, you will not be charged a fee to support the service. The result of area rating is that tax rates for certain services vary depending on where you live and the level of service offered by the City. All areas within the City have area rated costs. Depending on the levels of service, those costs vary.”

In other words, Area Rating protects the homeowner from paying for services he/she does not receive. This process was put in place at the time of the forced amalgamation in 2000 in order to prevent the larger municipality of Hamilton from imposing its spending costs on the skeptical suburbs. The system has been tweaked, but in place for 8 years now, and should be reviewed. This is the fairness that is demanded. Should it be scrapped? That is another question that I will come to in Part 2 of this essay. First let’s look at the political landscape.

By a narrow 8-7 vote, committee of Council voted not to proceed with debating the Area Rating process for two years, until the next Municipal election. By doing so, Council politicized the process needlessly. It seemed to suggest that Council wasn’t mature enough to examine the system to ensure its fairness and current applicability.

Voting in favour of having the debate now before the next budget and before the 2010 election were Councillors: Bratina, Morelli, Merulla, Collins, Duval, Whitehead, Clark. Voting against the debate and review were: Mayor Eisenberger, Councillors Pearson, Pasuta, Ferguson, Powers, McCarthy, Mitchell and Jackson.

It is interesting to note that, at committee, Councillor Clark was the only suburban Councillor to vote for the debate and Councillor Jackson the only Hamilton Councillor to vote against it. The Mayor sided with the suburbs in voting against the motion. Another column might examine the rationale for these three votes; and whether the Councillor positions signal mayoral interests; or whether the Mayor’s stand signals his concern about retaining the suburban vote in 2010. For now, let’s just say that the votes were interesting!

This is where Councillor Scott Duvall of Ward 7 stepped up to the plate. He understood that the nature of the debate had division with a capital D written all over it. So, he forged a resolution and a timeline that was unanimously palatable to the entire group. That is, to have the debate before the next election, but to wait for any new implementation until after the election. Good for Councillor Duvall. This finesse is almost classic in its thinking. You see, any hurt feelings won’t be felt in the pocketbook until after the 2010 vote so the pain is assuaged in the short term. However, there can be no denying that the topic, and how people voted, will be made into an election issue by everyone concerned. So, in fact, the pressure will be intense to protect each Councillor’s constituents by voting the right way. And what is the right way? It may not be whatever is best for the entire city, it may simply be whichever plan least impacts the taxes of the ward. So, will the suburban Councillors still favour area rating and the former urban Hamilton Councillors vote for a new system? This will be the million dollar question!

Whatever Councillors do, the Mayor’s vote will be extremely important and sensitive. He will be voting with the expectations of urban/suburban residents on his shoulders. And these expectations may be diametrically opposed to each other. What to do? It will be a delicate balancing act for sure.

On the issue of the debate itself, one has to ask whether it will be harmful to Council relations and the feelings of the suburban communities and city residents even to have the discussion. Perhaps; but it is fair to state that relations could not be worse. The Flamborough ‘slots’ debate sealed this Council’s hope for a controversial-free term. The genie is out of the bottle on that score.

Also, if one is to believe the on-line chatter, Hamilton residents aren’t pleased that they might be sacrificed at the altar of fairness in an attempt to recapture harmony with the suburbs. This, as I have said, was a strategic error in framing the discussion.

The only way of avoiding re-igniting the furore of the suburbs, or the anger of the inner city, is to have a debate which is honest, free of parochial interests and truly tests the ‘fairness’ of the current system versus some new proposals. And then, of course, to do the right thing. Then, I believe, that all right minded Hamiltonians -whether they hail from Stoney Creek or Dundas or Hamilton’s mountain- will respect the necessity of examining policies in a timely, constructive way. Can this Council be expected to allow reason to prevail over emotion? Can any political body? Time will tell.

Next week: The Staff report, some analysis that needs to be done and a few predictions.

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