Report: free rides no route to increased gas tax dollars

Greater Sudbury will have a tough time increasing provincial gas tax revenue by offering more free rides to seniors and other groups, according to a report going to the budget committee this week.

Since the city's share is calculated, in part, on ridership, some councillors have talked about the potential of boosting revenue by increasing ridership.

Meeting last month, Greater Sudbury Mayor Brian Bigger said with transit ridership stuck at around five million a year, the city has to look for ways to increase the number to boost the gas tax revenue, which in turn could help pay for improving service.

“What would happen if we offered free rides on transit next year?” said Bigger, who campaigned on a promise to offer free bus rides to seniors during off-peak hours. “There's no other source of funding that's going to improve our situation.”

But the report says increasing ridership by as much as 100,000 trips a year would result in an extra $26,000 in gas tax money, and even that figure is contingent on several factors.

The estimate assumes “that population is constant, the gas tax funds collected by the province remained unchanged and that other communities’ ridership also does not change,” the report says. “It is unlikely that this would occur. For ridership to positively influence the amount of gas tax revenue received, the city would need to grow ridership in excess of the growth in ridership provincially.

“If ridership provincially grows at an equal rate to Greater Sudbury, then the city will not receive any additional gas tax revenue.”

And with the revenue lost to free rides, it's highly unlikely the move would end up making the city money.

When the gas tax program began in 2004, the province dedicated one cent per litre of all gas tax funds to the fund, increasing it to 1.5 cents in 2005 and two cents in 2006. It made the fund permanent in 2013.

Each city's share of the revenue is based 70 per cent on ridership and 30 per cent on population. The money has to be used either to improve or expand the service. The city has received more than $20 million from the fund since the program began.

City budget meetings continue later this week, with meetings scheduled for Wednesday and Thursday. A vote on the 2015 budget is expected by the end of Thursday's meeting.