While taxpayers feel the pinch, B.C.’s free-spending municipalities have been expanding their belts.
A report to be published today by the Canadian Federation of Independent Businesses shows that between 2000 and 2007, operating spending rose nearly 44 per cent at B.C. municipalities, while inflation and population growth increased by only 25 per cent.
Fully 129 of B.C.’s 153 municipal governments increased their operational spending at rates that exceeded what would be needed to keep up with inflation and population growth, says the report.
“That kind of spending is disrespectful to taxpayers,” CFIB vice-president Laura Jones said Wednesday. “And it’s really out of touch in this economic climate.” The report found that Prince George’s spending rose at 2.89 times the rate of inflation, the worst among large cities of over 25,000.
Twelve of B.C.’s largest municipalities spent at a rate more than double what could be justified by their growth in population and inflation.
Robertson said it’s important to remember the amount of downloading that has taken place on cities from the federal and provincial governments in recent years.
“But remember that cities manage only eight per cent of the tax base and are saddled with downloading — provincial and federal investment in infrastructure and their key responsibilities haven’t kept pace with the core needs.
“Affordable housing, child care, transportation: All of these are more and more on the backs of municipalities, and current spending reflects that. These are crucial services to the health and well-being of our cities and we can’t simply ignore them.” The report found that only 24 of B.C.’s 153 municipalities representing just 2.8 per cent of B.C. residents kept spending within population growth and inflation.
And it’s not getting much better.
The second annual B.C. Municipal Spending Watch report shows that local governments are not getting the message about fiscal prudence. Between 2006 and 2007, 92 of B.C.’s 153 municipalities widened this spending gap, while 61 narrowed it.
To cover the shortfall, municipalities have increased their revenues by 62 per cent over the seven-year period, to fund growth in operating and capital spending.
Property taxes have risen 62 per cent, user fees increased 95 per cent, and transfer payments from senior government shot up 121 per cent over the same period.
If local spending had been kept in check, the report says, people and businesses would still have $572 million in their pockets in 2007.
And property taxes would have been 14-per-cent lower.
“The conclusion is clear — municipalities have to get a lot more serious about keeping costs under control or our taxes are going to keep rising faster than our ability to pay for it,” Jones said.
Spending on operations just keeps going up, the report shows.
In 2007, spending per municipal resident was $1,142 in cities over 25,000, compared to $1,088 the year before.
The CFIB says 60 per cent of the typical municipal budget goes on salaries, which is the main driver behind higher taxes and fees.
“Given the current economic picture, you would think that municipalities would control their spending,” said Jones. “Unfortunately, that does not seem to be the case.” A survey of its 10,000 members found that most small businesses are demanding limits on municipal spending.
The report calls on B.C. to follow the lead of Ontario and Alberta, and hire a municipal auditor-general for B.C. to make local governments more accountable.
A whopping 85 per cent of small businesses want regular audits of public spending by civic authorities. They also want municipal spending capped to hikes no greater than population and inflation growth.
Some 55 per cent blame property tax as the most harmful tax to their businesses.
“The No. 1 thing they need to do is keep municipal wages in line with the private sector,” said Jones, adding government workers receive 35 per cent more in wages and benefits from similar workers in the private sector.
Two-thirds of businesses said local governments should focus on core services, and not provide services outside their jurisdiction.
The Canadian Taxpayers Federation agreed with the report’s findings.
“This very clearly shows that the provincial government must step in and cap property-tax rates,” said Maureen Bader, the group’s B.C.
“Spending is out of control. And the only way to bring it under control is to stop municipalities from just raising property taxes at will.”
http://www.theprovince.com/health/Municipalities+spending+outpacing+real+growth/2186197/story.html
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