Budget consultation must offer choices
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Hey there, time traveller!
This article was published 13/11/2015 (2640 days ago), so information in it may no longer be current.
The empty pleadings of city finance chairman Marty Morantz for more money from the provincial government are starting to wear a little thin. “Please sir, we want some more” is a suitable lament for a hungry waif, but it is unlikely to deliver another serving for the cash-starved city.
And could the city please stop talking about its structural deficit, as if the city had the power to run operating shortfalls.
Former mayor Glen Murray (1998-2004) published three-year operating budgets that always projected deficits in future years, but every year the city balanced its budget as required by law.
The problem with the administrations of Murray and former mayors Susan Thompson and Sam Katz is they exaggerated the need for regular tax freezes and tax cuts.
The cumulative effect of some 14 years of cuts and freezes is that the city’s ability to cope with rising costs and needs deteriorated, while investments in infrastructure declined or remained static.
The numbers tell the story: according to a study by city economist Georges Chartier, the city reduced taxes by six per cent from 1999 to 2011, while other western cities raised them. Edmonton’s taxes climbed 59 per cent in that period, Vancouver by 47.7 per cent, Calgary 52 per cent and so on.
The argument for tax cuts and freezes was that Winnipeg needed lower taxes to be competitive, but it has turned out to be a false economy. Now, the city is trying to catch up so it can maintain basic services and keep pace with rising salaries.
The city is facing property-tax increases annually of roughly three per cent, but hikes in frontage levies, utilities and user fees are also adding up.
It’s noteworthy school divisions can raise their taxes by five per cent or more with barely a peep of protest, while the city is pilloried for less, even though homeowners get far more in services from the city than their school board.
Mayor Brian Bowman, like his predecessors, is right in demanding a new revenue model that links the city’s growth and economic activity to revenue.
For its part, the province says it is generous with the city, contributing $322 million this year to support civic infrastructure and critical services. The province’s formula is also growth-based. The city gets one point of the provincial sales tax or 4.15 per cent of estimated personal and corporate tax revenues, whichever is greater, plus a share of gas and diesel taxes.
It’s the same formula (minus the PST option) that has been used for many years, but it barely reflects the economic activity that is generated in Winnipeg.
Different provinces support their cities in different ways, but the mayors of Canada’s big cities have one thing in common: they need more political and economic power to keep up with the rising cost of front-line services, including roads, policing, firefighting, recreation and parks and libraries.
Mr. Morantz is urging Winnipeggers to demand more from political parties during the provincial election, but he and the mayor will have to do better than that.
Former mayor Murray tried the same tactic in 1999 and civic issues were barely mentioned in the election that brought the NDP to power.
The better approach is for Mr. Bowman to put concrete proposals on the table during the upcoming budget consultation process.
Homeowners could be asked if they would support a city tax on vehicle registrations, liquor, cigarettes, real estate fees, road tolls and other services, or if they would prefer a simple increase in municipal property taxes. And should the cost of education be entirely covered by income taxes instead of property levies?
The city has not done a good job of educating ratepayers about the fiscal landscape. The budget process is a good place to start the discussion.