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Cost of streets could push up rural and commercial rates |
Deciding who should pay to maintain and develop Christchurch's streets is one of the key issues in the Christchurch City Council's revenue study, which will form the basis of the new funding policy next year.
Because Christchurch's roading network takes up such a large slice of the Council budget, when the working party of Councillors decided how these costs should be shared between different sectors of users and ratepayers, their allocations had significant implications for where the overall share of rates would fall.
Direct benefit from roads is received by individuals and businesses who use them. General benefits of roads are economic and social from businesses being able to move goods swiftly about the City and from people moving to employment, recreation, health, education and other activities.
The working party of councillors calculated the general benefit of the service at 31 per cent and the direct benefit at 69 per cent.
After deducting a $10million of Transit New Zealand subsidies, the annual cost of Christchurch roads is around $40 million.
The working party decided that, since most of this $10 million subsidy is raised from petrol tax, this part of the city streets revenue is a form of user charge.
As there are no other practical means to directly charge road users, the working party decided the remaining cost of providing direct benefits from city streets must be recovered from ratepayers.
Costs have been allocated to ratepayer groups on the basis of the average distance travelled by each type of vehicle adjusted, where appropriate, for the weight of vehicles.
The working party findings say 47 percent of the cost of city streets should fall to commercial ratepayers, and one percent should fall to rural ratepayers.
Because established engineers' calculations say that one large truck travelling along a road causes the same amount of damage to the road surface as 13,000 cars, the cost of wear and tear caused by vehicles using the roads is predominantly allocated to heavy vehicles.
You may agree or disagree with this reasoning. Either way, you should obtain a copy of "Rates or User Charges Your City Your Choice" to make a submission and ensure your opinions will help the Council to formulate its funding policy