Mayor Sam Katz says he has no plans to raise property taxes until the city has done everything it can to cut costs and reduce waste.
I’m glad he’s reiterating that publicly because we still hear from some quarters that city hall has already cut spending to the bone and has no choice but to increase taxes.
“From the city’s point of view, we still have work to do in-house where I think we can do things better, we can save money in certain areas, we can be more efficient,” Katz said this week during an editorial board meeting with the Winnipeg Sun. “I always said when we have that in order then I will look at property taxes.”
It’s a myth that city hall has cut spending to the bone. The city has made some cuts but spending is still wildly out of control in some areas, including labour costs. City hall’s single biggest expense is labour costs. Salaries and benefits made up 53% of total costs at the city last year, according to the city’s 2008 annual report. Despite claims by some city officials and councillors that city hall is doing everything possible to contain costs, those labour costs have skyrocketed over the past five years.
In 2003, the average number of employees at the city was 8,385, costing taxpayers $465 million in salaries and benefits. In 2004, the year Katz became mayor — albeit halfway through the year — that number jumped to 8,788 employees at a cost of $496 million.
The size of the workforce continued to grow over the next two years and by 2006 there were 8,836 employees at a cost of $531 million. The average number of employees began to fall somewhat after that, but costs didn’t.
By 2008, there was an average of 8,402 employees. But total salaries and benefits soared to a staggering $565 million. That’s where costs are out of control. And that’s where Katz and city council have to get their act together before they can even talk about raising property taxes.
Labour costs have grown by $100 million over five years. That’s a 21% increase, or twice the rate of inflation. It’s completely unacceptable. Most city workers, including middle managers, are represented by one of eight unions. Trouble is, the city refuses to negotiate aggressively during labour talks and agrees to contracts that drive up employee costs at twice the rate of inflation.
“When you look at anytime we renew any agreements, they exceed inflation,” Katz confirmed.
But when is the last time we’ve seen the city really take on the unions during collective bargaining, like the city of Toronto did this year?
We want labour peace, but not at any cost. We certainly can’t have taxpayers shelling out 21% increases over five years for salaries and benefits.
So I agree with Katz, the city still has some work to do before it can say it has no other recourse but to raise property taxes.
Which is why Katz, when asked, says he has no plans to jack up rates next year.
“Are you asking me if I intend to specifically support increasing taxes? No, I haven’t landed on that at this stage in the game,” said Katz.
“Is it a possibility? Yes, but I’m definitely not there at this stage in the game.”
My bet is he won’t be come 2010.
http://www.winnipegsun.com/news/2009/10/28/11551721.html#/news/columnists/tom_brodbeck/2009/10/28/pf-11548351.html
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