by Sara MacIntyre JULY 5 taxpayer.com
It’s hard to stomach municipal governments whining about a lack of revenue when they are voting themselves 25 percent salary increases, handing out six figure severance packages or levying double digit property tax hikes. The fact is, most municipalities have too much money. Local governments do not have a revenue problem but rather a spending problem and need to check into a budget rehab program.A cursory look around the country provides countless examples of municipal money mayhem. In Victoria, the municipal government is considering underwriting a quaint yet commercially unviable rail line between Esquimalt and Nanaimo. The Capital region is also contemplating a light rail line from Sydney to Victoria. Meanwhile, Victoria wants to increase the fuel tax by one cent a litre because they don’t have enough revenue to meet existing transit costs!Council needs to address the spending side of the ledger before coming back to taxpayers for more revenue.Another example of municipal budgeting gone awry is the bed and breakfast mecca of Sooke on Vancouver Island. Because council wanted to have its own police force for the 11,000 residents, property owners were hit with a whopping 25 per cent increase in taxes last year. The policing price tag came in at $1.1 million fully 40 per cent over budget. The City of Richmond, meanwhile, hit property owners with a 6.1 per cent tax increase while councilors gave themselves a 25 per cent pay increase! The same is happening all across the country. Edmonton city councilors recently gave themselves a 21 per cent pay increase. And in Halifax, homeowners learned this week that their tax dollars are going to finance a $100,000 rock concert!It’s time to get back to basics. Traditionally, local governments were responsible for policing and emergency services, sewage and water treatment, roadway and bridge maintenance and zoning by-laws. Community parks were provided courtesy of local groups like the Kinsmen, Rotary or Gyro clubs.Now, however, municipalities re-turf soccer fields under the guise of ‘infrastructure improvements’ and use limited tax dollars to host un-profitable cultural events and even use the local budget as a personal piggy-bank for travel. Local councilors complain that provincial downloading has forced them to take up new responsibilities and yet were not handed increased revenues to fulfill these new roles. In fact, total municipal revenue in British Columbia has increased 44 per cent in the past four years. Municipal coffers are flowing with revenue from traffic fines, lotteries, gambling, developer contributions, property taxes, transfers from the provincial and the new federal gas tax sharing agreement.Is there a solution, beyond a taxpayer revolt? The Canadian Taxpayers Federation (CTF) has been advocating a cap on property tax bills to provide certainty to homeowners and stability for municipalities. Essentially, increases in property tax bills would be limited to increases in the cost of living. Any increase beyond that amount would require voter approval.The net effect is to get local governments to develop long term and sustainable budget plans as opposed to the ad hoc and expensive approach currently used. Now, municipalities come up with their wish list and then set a mill rate to pay for it. There is no incentive to be fiscally responsible and it shows. Local governments provide important services but need to demonstrate greater restraint over discretionary spending and get back to basics. The CTF’s proposed cap on property tax bills would go a long way to force municipalities to prioritize spending and to live within their means-like the taxpayers who fund them. Go to our website, www.taxpayer.com and sign our property tax cap petition and urge your local MLA to take the issue up in the legislature this fall.
It’s hard to stomach municipal governments whining about a lack of revenue when they are voting themselves 25 percent salary increases, handing out six figure severance packages or levying double digit property tax hikes. The fact is, most municipalities have too much money. Local governments do not have a revenue problem but rather a spending problem and need to check into a budget rehab program.A cursory look around the country provides countless examples of municipal money mayhem. In Victoria, the municipal government is considering underwriting a quaint yet commercially unviable rail line between Esquimalt and Nanaimo. The Capital region is also contemplating a light rail line from Sydney to Victoria. Meanwhile, Victoria wants to increase the fuel tax by one cent a litre because they don’t have enough revenue to meet existing transit costs!Council needs to address the spending side of the ledger before coming back to taxpayers for more revenue.Another example of municipal budgeting gone awry is the bed and breakfast mecca of Sooke on Vancouver Island. Because council wanted to have its own police force for the 11,000 residents, property owners were hit with a whopping 25 per cent increase in taxes last year. The policing price tag came in at $1.1 million fully 40 per cent over budget. The City of Richmond, meanwhile, hit property owners with a 6.1 per cent tax increase while councilors gave themselves a 25 per cent pay increase! The same is happening all across the country. Edmonton city councilors recently gave themselves a 21 per cent pay increase. And in Halifax, homeowners learned this week that their tax dollars are going to finance a $100,000 rock concert!It’s time to get back to basics. Traditionally, local governments were responsible for policing and emergency services, sewage and water treatment, roadway and bridge maintenance and zoning by-laws. Community parks were provided courtesy of local groups like the Kinsmen, Rotary or Gyro clubs.Now, however, municipalities re-turf soccer fields under the guise of ‘infrastructure improvements’ and use limited tax dollars to host un-profitable cultural events and even use the local budget as a personal piggy-bank for travel. Local councilors complain that provincial downloading has forced them to take up new responsibilities and yet were not handed increased revenues to fulfill these new roles. In fact, total municipal revenue in British Columbia has increased 44 per cent in the past four years. Municipal coffers are flowing with revenue from traffic fines, lotteries, gambling, developer contributions, property taxes, transfers from the provincial and the new federal gas tax sharing agreement.Is there a solution, beyond a taxpayer revolt? The Canadian Taxpayers Federation (CTF) has been advocating a cap on property tax bills to provide certainty to homeowners and stability for municipalities. Essentially, increases in property tax bills would be limited to increases in the cost of living. Any increase beyond that amount would require voter approval.The net effect is to get local governments to develop long term and sustainable budget plans as opposed to the ad hoc and expensive approach currently used. Now, municipalities come up with their wish list and then set a mill rate to pay for it. There is no incentive to be fiscally responsible and it shows. Local governments provide important services but need to demonstrate greater restraint over discretionary spending and get back to basics. The CTF’s proposed cap on property tax bills would go a long way to force municipalities to prioritize spending and to live within their means-like the taxpayers who fund them. Go to our website, www.taxpayer.com and sign our property tax cap petition and urge your local MLA to take the issue up in the legislature this fall.
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