Winnipeg should follow Brandon’s lead

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This article was published 29/01/2016 (3627 days ago), so information in it may no longer be current.

BRANDON — As Winnipeg’s home and business owners brace for another higher-than-inflation increase in property taxes, frontage levies and other fees, they can’t be blamed for wondering why things are so different in Brandon.

Brandon city council unanimously approved a draft 2016 budget that calls for a property tax increase of just 0.59 per cent. For the average homeowner with a property assessed at $251,000, it means the municipal tax bill will increase by $10.54, or less than a loonie per month.

This year’s small increase is not an anomaly. Last year’s hike was even lower: 0.53 per cent.

While such small increases in municipal spending often come at the expense of vital services or infrastructure, that hasn’t happened in Brandon. There have been no layoffs and no cuts in city services or programs under the past two budgets. In fact, contributions for the Keystone Centre, the Brandon Regional Health Centre, downtown revitalization and other important projects have increased.

Brandon’s tax-rate restraint isn’t being supplemented by increases in other areas either. The city does not have a frontage levy, a business tax, an amusement tax nor a garbage fee. City council didn’t raid the water and sewer utility in order to lessen the size of the property tax increase, and the various reserve accounts are adequately funded.

“I feel especially good that we were able to accommodate all of those things and continue to maintain the city — no service cuts, program cuts. In fact, if anything, enhancements in many cases,” Mayor Rick Chrest told the Brandon Sun. “And then still come in with… a very affordable result for the taxpayers of Brandon.”

How has Brandon managed to cover increasing costs of providing various services without the need for large tax hikes? The simple answer is Chrest made a campaign commitment to keep annual tax increases at or below the rate of inflation, and to finance additional spending through the annual growth in the city’s assessment base. He has delivered on that in both of his budgets without impairing core city services.

Winnipeg Mayor Brian Bowman made the same promise during the 2014 election campaign, but the city’s 2015 budget included a 2.3 per cent mill-rate increase and a 16 per cent increase in the frontage levy. Those two items combined to amount to a 3.7 per cent tax increase, which was double the local inflation rate.

The city’s garbage fee was also increased 10 per cent and the water and sewer utility was raided for $30 million. It means Winnipeg’s water bills are increasingly becoming an indirect property tax — despite the fact those dollars are desperately needed to upgrade the provincial capital’s crumbling sewer system.

Some claim larger tax increases are necessary because the challenges facing Winnipeg are much greater and more complex than those faced by Brandon. It could be just as easily argued that Winnipeg should be cheaper to run, based on its comparative size and economies of scale.

It has also been argued Winnipeg has been chronically starved of the revenues it needs to run the city, but, in reality, it has received enormous amounts of funding from senior levels of government over the past several decades — far higher per capita than Brandon.

The more plausible explanation for Winnipeg’s inability to follow Brandon’s lead on taxes is Winnipeg is still paying the price for years of property tax freezes and, unlike Brandon, Winnipeg has a long and expensive history of huge cost overruns on capital projects.

In other words, Winnipeggers are paying now for years of opportunistic political leadership, combined with inept management of city resources — and the tax bills will continue to rise until the political will exists to tackle those problems.

That will have financial consequences for Winnipeg’s home and business owners, and for the city’s ability to compete against places such as Regina, Brandon, Steinbach and Winkler to retain and attract businesses and residents.

If Winnipeg doesn’t get its finances in order — and quickly — it is only a matter of time before business and home owners start considering more affordable alternatives. That is, if they aren’t already.

 

Deveryn Ross is a political commentator living in Brandon.

 

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