Having grown up in Toronto, and frequently visiting my family who still reside there, I’ve always found it instructive to compare the relative state of my birth city and my adopted city, Winnipeg.
For example, this morning Mayor Sam Katz delivered the 2010 operating budget. It’s an $800-million whopper that features a property tax freeze, the 13th consecutive budget that Winnipeg mayors have brought in with a freeze. There will also be additional business tax exemptions and a few small baubles, like extended hours for some suburban libraries. The city was able to contemplate the tax freeze and cut in large part because it had a $9-million surplus from last year.
The greatest controversy surrounding this year’s budget is the continuing intrigue about whether the city will buy a police helicopter and if it does, which level of government will pay for it. The province, so far, is only willing to provide a core operating grant. No inflationary costs will be covered, and that has the city blaming the province for making Winnipeg streets unsafe. Too bad Katz has shown anybody how a helicopter would make Winnipeg streets safer. But I digress.
Let’s compare Winnipeg’s budget scenario with what’s happening in my old home town. Toronto Mayor David Miller brought down an operating budget for Canada’s largest city on the same day as Winnipeg. The – gulp – $9.1-billion budget features a four-per-cent property tax hike, a 1.3 per cent business tax hike, $13 million in new or increased user fees and more than $170-million in program spending cuts. Over the past few years, Torontonians have seen on average 3-4 per cent annual property tax hikes.
The more alarming aspect of Toronto’s fiscal situation is that it has been running budget deficits for several years now, which has required the city to drain its cash resources. Funding pressure from the Toronto Transit Commission and the city’s unionized workers is blamed by many as the main cause of the deficits. While property taxes have gone up around four percent, spending has increased by close to six per cent.
Now, on the surface, it would seem that Winnipeg is in a much better position than Toronto. And in many respects, we are. Although I have taken Katz to task over the last year for a lack of vision and a disregard for due process, he has maintained Winnipeg’s national reputation for running a tight ship. Winnipeggers love to hate their city, but there has always been evidence to suggest that this city has, for the last 20 years, been a pretty lean operation. In addition to holding the line on residential property taxes, Winnipeg has lowered its capital debt to manageable levels and socked away some extraordinarily large cash reserves. It’s credit rating has never been higher.
That kind of frugality comes with a price, as we all know from watching the roads, sidewalks and bridges crumble around us. Recreational facilities, libraries and other city services that define the city have also taken a hammering. It has been noted in this space before, but this is a city that pinches pennies all over the place to create savings to lower business taxes. Consider that despite running a $9 million surplus last year, the city had to steal $30,00 from the Library Service technology fund to offer free wireless internet at the Millennium Library downtown. No, with only $9 million in surplus funds, we can’t have new computers AND wireless internet. Once again, I digress.
After reducing capital debt, wrestling property taxes into submission and restoring cash reserves, the challenge for Winnipeg (and Toronto for that matter) is to make sure there is value for the taxes we do pay. Living in a city with low property taxes that is both falling apart and not offering the services we hold most dearly is not really living.
We should celebrate the fact that as a small big city, or a big small city, we have our fiscal ducks in a row. With that accomplished, we should also encourage our civic leaders to find a way of enhancing services, repairing or replacing infrastructure, and improving the overall quality of life. In this, an election year, we should demand nothing less.