Winnipeg Free Press - PRINT EDITION

Civic tax hikes ugly new normal

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The City of Winnipeg's proposed operating budget is the most optically challenged civic document in recent memory. It raises taxes, wrongly pads councillors' expense accounts and hires new staff for the mayor and executive policy committee, while cutting grants for worthy organizations such as the Block Parent Program.

Optics, however, don't always tell a fair and complete story, and there is much in this budget that is necessary, including the re-establishment of a policy development office for the mayor and his executive committee. The absence of such a body has hurt the ability of elected officials to effectively analyze policy options.

Mayor Sam Katz supported the elimination of the office five years ago, which he now acknowledges was a mistake.

He says he also realizes -- finally -- that current spending on emergency services is unsustainable. Police, firefighters and paramedics consume 44 per cent of the budget, and it will only get worse with time. The city has added about 200 police officers alone in the last decade without justifying the number and it is only now conducting an operational review in a search for savings.

Most of the 3.8 per cent increase in property taxes is blamed on the rising cost of emergency services and public works. The province is partly responsible, since it was the NDP that decided for political reasons to direct funding for extra officers over the years.

The idea of dedicating a one per cent increase in property taxes to local road improvements is a transparent way of using taxes, and it would ensure reliable and predictable funds for infrastructure if the same levy was applied in future years to an increasingly larger base. Better would have been a share of the province's lucrative consumption taxes rather than raising the levy on property, but the NDP government refuses to help the city reduce its over-reliance on realty taxes to fund services.

This is the second increase in property taxes in as many years, and unless there are fundamental changes, it looks like tax increases will be the new normal.

That's not a good omen, particularly with education taxes also rising relentlessly. The city says it has the lowest taxes of major cities in Canada, but it's a dubious claim. An average house in Calgary, for example pays, only $50 more a year in civic taxes, but the average house in Winnipeg is worth much less, meaning taxes as a percentage of value are still relatively high here.

The mayor and his soon-to-be-hired policy experts need to get a better grip on the problem, rather than making dubious tax comparisons with other cities.

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien, Shannon Sampert, and Paul Samyn.

Republished from the Winnipeg Free Press print edition January 10, 2013 A14

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Updated on Thursday, January 10, 2013 at 9:05 AM CST: adds illustration

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