Winnipeg Free Press - PRINT EDITION

Blind cuts sign of cowardice

Tough to find real efficiencies versus imposing days off for city staff

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We are going to be one slim city.

The city's preliminary operating budget for 2014, unveiled last week, contained some austerity measures and a 2.95 per cent property tax increase. One per cent of the hike is dedicated to infrastructure.

The belt-tightening measures include a 3.5-day unpaid furlough for non-essential civic employees next Christmas. A number of job vacancies will go unfilled, 20 senior-management positions will be cut and councillors' ward allowances will be cut a year after they were increased.

At first blush, this is not a horrible budget. A tax hike was unavoidable given inflation and increasing infrastructure demands. Countervailing spending cuts held the tax increase to a modest level. Homeowners will pay, on average, another $45.

It also deserves to be said that trying to forge a balanced municipal budget in these trying times is no easy matter. Amid lingering economic uncertainty, inflation is reaching worrisome levels, and there is never enough money to fix roads, bridges and sewers.

If there is a problem with this budget, it is that the city is once again cutting without a clear idea about the effects. Consider the proposed cut to senior managers. This is a familiar go-to measure whenever council needs to find savings. However, no one knows how this will affect services. This is a strategy to save a specific sum of money, not to create efficiency.

For those who care not only about how much tax they pay but also about the value they receive for those tax dollars, this is a concern that can translate into millions of dollars in waste.

For example, the city has a well-publicized problem managing its real estate transactions and big capital projects. Tens of millions of dollars in cost overruns have been found in the past year. We'd be fools to think all of the blind cuts to city management haven't played a role in that debacle.

The city is already below complement in many areas. Consider that the city already has a program to allow employees to take unpaid days off. However, almost no one uses it; the city is so understaffed that unions report few are approved for the unpaid days off.

To reduce positions and ask staff to take unpaid days in this context is madness. It's like trying to lose weight by cutting off an appendage.

Basic math tells us this is an approach that can only be used so many times. Ultimately, you will cut so deep there is nothing left but the stump of what you once were.

Still, some on council are interested in seeing how many appendages you can cut off before death ensues.

Coun. Scott Fielding, who has announced his intention to run for mayor next year, has published a plan to freeze taxes and increase investment in infrastructure. He advocates even deeper staffing cuts. Again, Fielding makes no attempt to define the effects of these cuts. He seems to be satisfied the outcome is justifiable as long as we avoid a tax increase.

This is the zero-sum game of the rabid tax cutting/freezing constituency. Start with the premise all taxes are bad, and taxes must come down come hell or high water. Pontificate about how tax cuts are really good for everyone and they grow an economy. Add in the additional idea that it costs way more to run government than it should.

The problem is, at the very least these are all debatable points. And shouldn't anyone advocating a tax cut or freeze have to explain the effect on services that come with less revenue? That is not a question anyone in the anti-tax camp really wants to answer.

Tax cuts are neither inherently good nor bad. A well-executed tax cut can be a great benefit to a great many people. However, a tax cut is only good when we know it has not hurt as many or more people than it has helped.

The city has a tough job to do each year when it brings forward a budget. Unable to carry a deficit, the city can spend only what it collects in revenue. That makes for tough choices.

However, many of the toughest choices in this budget are inherently cowardly. Furloughs, vacancy management and raiding reserve accounts are easy ways to balance a budget; it's tougher to find real efficiencies.

And there is a cumulative consequence of this cowardice. Each time we lean too heavily on short-term fixes to balance a budget, it makes it more difficult to pull off the same trick the following year. Ultimately, that leaves us with the worst of both worlds: We'll still be paying taxes, but we'll be getting almost nothing of value in return.

dan.lett@freepress.mb.ca

Republished from the Winnipeg Free Press print edition December 3, 2013 A4

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