Municipalities caught in a financial squeeze

Penticton Western Editorial November 12, 2009

When the Canadian Federation of Independent Business released its municipal spending report last week, it caused the hair on the backs of many of the province’s mayors to stand up like dobermans guarding a warehouse. And with a certain amount of good reason. For decades, municipalities have been in the unenviable position of having to provide core, front-line services without much opportunity beyond property taxes and service charges to control revenue generation for their budgets, which by law must be balanced. In the ‘90s, this predicament worsened as deficit-reducing senior governments off-loaded responsibilities: dad shared his problems with his son, who turned around and kicked the dog. But the dog fought back and slowly the province began to concede that municipalities, with their localized perspectives, could and should run programs more effectively than the province or feds, and thus needed more money to do so.

And so when a report criticizing municipalities for a province-wide average increase in operating spending 1.78 times higher than population and inflation growth between 2000 and 2007 hit the headlines, mayors got protective of the funding they have fought to get, and arguably continue to need more of. However, the health of a democracy is maintained by checks and balances. CFIB’s report is a check, presenting some valid points, for instance: should B.C.’s municipal workers earn on average 10.4 per cent (34.9 per cent including benefits) more than their private-sector counterparts?

It seems that the mayors who are the most upset with the report are the ones from municipalities who have been shown to have the biggest gap between increased spending and population-inflation growth. Luckily Penticton’s Dan Ashton is not such a mayor. Ashton defended the good work the city does while conceding that efficiencies could and should be found in the city’s operations to lower its budget in a socially responsible manner.Let’s hope the core services review he and council have initiated will do just that.