City councillor wants to keep tax increase at zero

By Richard Rolke - Vernon Morning Star  Published: December 21, 2010 7:00 PM

City of Vernon staff are urging taxes be hiked, but some politicians aren’t willing to comply. Administration has suggested that council’s goal for a zero per cent tax increase in 2011 will lead to program cuts.  “I’m going to try and find a way to have zero,” said Coun. Mary-Jo O’Keefe, adding that the recession continues to create challenges for businesses and residents.  “The community has taken a hit and people are struggling. I have a concern that city staff are insulated. They get their wages and benefits and they don’t see how people are struggling. We can’t just keep spending money.”  O’Keefe must still look at the proposed budget details, including projected revenue, but she admits that there may be a need to reduce programs.  “It never hurts to look at the level of service. Would citizens prefer that service or money in their jeans?” she said.  Coun. Bob Spiers says council makes the final decision and staff only presents recommendations.  “There is always a way of decreasing expenditures if you have the nerve to do it,” he said. In a memo to council, finance manager Kevin Bertles doe not recommend the adoption of the current financial plan.  “While it meets council’s goals of zero per cent, it does so at the expense of several program cuts, and additionally at the expense of provisions for future known expenditures,” he said.  To correct the revenue, funding side, Bertles says there is a requirement for a significant increase in taxation or non-taxation revenue, or a combination of both.  “If the required increase was solely taxation, the increase would be in excess of six per cent,” he said.

Coun. Jack Gilroy admits no tax increase would have implications. “We should look at zero but I don’t want to cut all of the programs,” he said.  “If we go with zero in 2011, I don’t want a double-digit tax increase the next year.”  Gilroy believes a slight tax hike may be needed but he insists the public’s ability to pay must be considered.“We have to help the businesses and people having a tough time,” he said.
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Morning Star Editorial Dec. 21: Council must make the call

The staff recommendation that Vernon council abandon its goal of a zero per cent tax increase makes some sense.  After all, money is needed to provide services that residents either require or demand. Running those services is becoming more expensive as the cost for labour, utilities and supplies climb. And anyone that was around in the 1990s knows that a series of tax freezes left infrastructure ailing. Eventually, double-digit hikes were needed to begin the long road to recovery.  However, Coun. Mary-Jo O’Keefe is correct when she suggests city staff may be out of touch with the conditions facing taxpayers in a recession. Unlike many residents, they continue to get their wages and benefits — and well-paying packages at that.  There is also the reality that while many businesses have had to chop staff, city hall has had a spike in hirings over the last few years. The need to cover those salaries places even more financial pressure on residents and businesses to make ends meet.  Staff warns that a zero per cent wage increase may lead to program cuts.  But that isn’t necessarily a bad thing as long as critical services — those impacting safety — aren’t touched. Cities can’t be all things to all people, and some initiatives may have to be phased out.  One also has to wonder if city staff can look at the financial situation objectively when it may be their jobs or pet projects on the line. Ultimately, it is staff’s responsibility to present options to council, but the onus is on the politicians to make the final decision, and taxpayers must live with the repercussions.