Carolyn Heiman, Times Colonist Published: Friday, Feb16, 2007 Canada.com
Victoria council is on its way to being the first Island council to give up the one-third tax-free benefit in its pay package in an effort to make salaries more transparent. Federal tax laws allow elected officials to get one-third of their salaries untaxed as a way of covering incidental expenses. Victoria council yesterday approved a compensation plan that in 2009 would cancel out the benefit that has already been abolished in Vancouver, Toronto, Ottawa and Hamilton. As well, MLAs in B.C., Ontario, Manitoba and Nova Scotia have nixed the tax dodge, which benefits high-income earners more than those with lower or no income from other sources, and is criticized for hiding the true salaries of politicians.
Mayor Alan Lowe and the eight council members also agreed to have their pay increased a little now -- and much more later if they are re-elected. They voted to bump their salaries to $25,878 for councillors and to $74,458 for the mayor, up from $21,943 and $66,013. The pay increase is identical to the one proposed by city staff in May 2006 but declined pending a review by an independent citizens committee. In 2009, after the next municipal election, councillors will be paid $39,104 while the mayor will get $97,760. All of it will be taxed in the same way other citizens pay income tax.
Under the new city compensation plan -- which will come up for ratification on Feb. 22 -- council members and the mayor will submit expense accounts in the same manner as exempt city staff. Couns. Geoff Young, Chris Coleman and Charlayne Thornton-Joe voted against the plan. Young doesn't like the idea of giving up the tax-free portion of the salary, arguing it is a federal benefit that eases the burden for the local property taxpayers who have to pick up the difference if it is eradicated. Coleman said "it is inappropriate to give ourselves a pay increase. ... Every time we see other levels of government give themselves a pay increase it increases cynicism by the public."
Coleman supported in its entirety the recommendation of the Citizens Committee on Council Remuneration, which said it is inappropriate and a conflict of interest for council to give itself a raise. The committee suggested all raises be made to take effect for incoming councils. However, the majority of councillors supported a motion that endorsed the committee's recommendation while giving a small increase now. The committee, established by council last fall after some councillors were uncomfortable voting themselves a pay raise, also proposed that all-inclusive salaries be increased annually according to the Consumer Price Index. It also suggested expense accounts be transparent and that council report quarterly on compensation. It estimated the changes would cost $132,000 annually.
The committee found that councillors' workload was growing but could be managed. It criticized the current pay system as neither transparent nor accountable. Hidden from the advertised pay scale for elected officials is 11 per cent paid in lieu of holiday, sick leave and benefits, which adds $1,988 for councillors and $6,251 for the mayor, free parking valued at $1,500 and $1,350 to councillors performing acting-mayor duties. Municipal politicians serving on some Capital Regional District boards and commissions also get a pay top-up. Coun. Sonya Chandler voted against the new compensation package, urging council to adopt the pay hike proposed last spring without changes to the tax-free status or provisos that councils set salaries for incoming councils.
Chandler encouraged the council to vote a pay package reflecting that they value the work they do. Coun. Dean Fortin said he values fair remuneration for council because it "allows all members of society to run for council," not just those who could afford to take the time off work. Lowe, whose salary lags behind Saanich Mayor Frank Leonard, predicted the community won't be outraged about the increase. "The people I talk to say council members are underpaid."
Council members received an automatic pay increase in December of two per cent. Irwine Henderson, one of the three citizens on the remuneration committee, applauded council's decision to accept the group's recommendations. The option of a small raise now and a larger raise in 2009 is a good compromise, he said.
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Canada.com article of Friday, May 26, 2006 'Victoria council contemplates salary increase' has some of history of this subject.
Article on Friday, December 15, 2006 Canada.com has more background and history on how the decision was made by the independent citizen's committee.
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