Tag Archives: Rate Of Inflation

Prepare to get hosed

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Education Minister Nancy Allan has signalled that property owners should prepare to be hosed by education tax increases this year.

Ms. Allan, of course, did not frame the signal in those words — she said this week that the government will not order school divisions to freeze tax rates — but it cynically amounts to the same thing.

Ms. Allan has not been long on the job. But she has been on the job long enough to know that a perfect storm is gathering around education property taxes, one from which she should be seeking to shield taxpayers. But instead, she declares it’s every school division for itself.

The perfect storm starts with the divisions, which have been agreeing to pay more teachers much more money to teach ever fewer children. Contract settlements have reached several times the rate of inflation, the most recent at 4.8 per cent, which will quickly become the norm for all. Why the settlements are so high is anybody’s guess in the current economic climate. But given the current economic climate — the government, which promised a balanced budget last spring, is already $600 million in deficit — the province is not going to be paying those wage increases, which leaves the hapless property owner, as Ms Allan must know.

To complicate — or is that implicate? — the situation, tax assessments this year have climbed on average 67 per cent under the recent reassessment. That dramatic rise, however, should not lead to a dramatic increase in property taxes. If everyone follows the City of Winnipeg’s policy of cutting mill rates by a 67 per cent equivalent to offset the expanded assessment base, a tax grab by stealth will not occur. That’s a policy, however, that the school divisions have ignored in the past, claiming to have frozen tax (mill) rates knowing that they would raise more lucre anyway. In 2002, for example, Winnipeg division raked in an extra $8 million under the scheme.

And what are taxpayers getting for this? The NDP government in its wisdom refuses to require standardized tests so there is no way of knowing. All we know is that in the absence of data, the province has reduced the school year from 200 days to as low as 193 to placate Labour Day vacationers, and it has guaranteed teachers that 10 of those days will be set aside for professional development.

At the same time, there are 136 more teachers on the job, in part because the government did not want to appear soft on obesity and declared that the reduced time in class should be further reduced by sending students to the gym.

So why is Ms. Allan ignoring all this and refusing to freeze education taxes? Because, while she’s a new minister, she is playing the same cynical game as the old ministers.

The government needs money, now more than ever, to cover the fact that its spending problems are bigger than its revenue problems in these tough times. Giving the green light to school divisions relieves the government of its responsibility to properly fund public education, as opposed to public education tax rebates.

But even more cynical is that, while the government refuses to accept responsibility, it hectors and lectures school trustees for raising property taxes in the absence of sufficient provincial funding.

Which is what Ms. Allan announced — she will not freeze taxes, she instead will pass judgement when taxes are raised.

So prepare to get hosed. But don’t blame the boards. This is the minister’s doing.

http://www.winnipegfreepress.com/opinion/editorials/prepare-to-get-hosed-81060087.html

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Municipalities' spending outpacing real growth

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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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Plan to cap property taxes would break B.C. law, mayor says

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It’s a modest proposal to the Canadian Taxpayers’ Federation. But Saanich’s mayor says the province would have to break its own law if it were to heed the CTF’s call call to cap property tax increases.
The CTF presented a petition last week to minister of community development Bill Bennett asking the province to to cap property taxes at current rates, and limit annual increases to the Consumer Price Index — Statistics Canada’s official measure of the rate of inflation.
“The problem is (municipal governments) start with spending and then decide what the property tax rate is going to be. What we’re advocating for is to turn that around,” said CTF B.C. director Maureen Bader.
The petition has gathered 1,960 signatures since August, with 850 of them coming online and the remainder “the old-fashioned way,” from CTF workers going door-to-door, Bader said.
But Mayor Frank Leonard said the CTF’s stance showed its lack of understanding about how local governments operate.
Unlike the province, where budget deliberations happen behind closed doors, municipalities like Saanich hold open budget meetings where anyone can address council, Leonard said.
“We’re an open and accountable level of government and people can come and attend our budget meetings and can speak there. And the Canadian Taxpayers Federation should do that.”
But having the province impose additional rules on municipalities’ ability to set property taxes would run counter to sections of B.C.’s Community Charter that grant them independence over their areas of jurisdiction, Leonard said.
“It’s right in the front of the Community Charter. So what the Canadian Taxpayers Federation is asking the provincial government to do is to break its own law.”
http://www.bclocalnews.com/vancouver_island_south/saanichnews/news/64222592.html

It’s a modest proposal to the Canadian Taxpayers’ Federation. But Saanich’s mayor says the province would have to break its own law if it were to heed the CTF’s call call to cap property tax increases.

The CTF presented a petition last week to minister of community development Bill Bennett asking the province to to cap property taxes at current rates, and limit annual increases to the Consumer Price Index — Statistics Canada’s official measure of the rate of inflation.

“The problem is (municipal governments) start with spending and then decide what the property tax rate is going to be. What we’re advocating for is to turn that around,” said CTF B.C. director Maureen Bader.

The petition has gathered 1,960 signatures since August, with 850 of them coming online and the remainder “the old-fashioned way,” from CTF workers going door-to-door, Bader said.

But Mayor Frank Leonard said the CTF’s stance showed its lack of understanding about how local governments operate.

Unlike the province, where budget deliberations happen behind closed doors, municipalities like Saanich hold open budget meetings where anyone can address council, Leonard said.

“We’re an open and accountable level of government and people can come and attend our budget meetings and can speak there. And the Canadian Taxpayers Federation should do that.”

But having the province impose additional rules on municipalities’ ability to set property taxes would run counter to sections of B.C.’s Community Charter that grant them independence over their areas of jurisdiction, Leonard said.

“It’s right in the front of the Community Charter. So what the Canadian Taxpayers Federation is asking the provincial government to do is to break its own law.”

http://www.bclocalnews.com/vancouver_island_south/saanichnews/news/64222592.html

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