Monday, January 24, 2005

"Londoners can no longer afford their local government"

The city council and the London Free Press would like to have us believe that we will be fortunate if property taxes are increased by less than 7.3 per cent. Our expectations that we may keep some of our income are lowered both by the delegation of blame to provincial downloading and by the continuing inability of councillors to abandon any pet projects. Indeed, after an eleven hour budget session,

An exasperated [councillor Ab] Chahbar had argued at the meeting that council had accomplished "absolutely nothing" in that marathon session which saw a proposed 7.8-per-cent tax hike drop to 7.3 per cent.

"But that was only because we got $2 million from London Hydro (in the form of a dividend) and had nothing to do with any hard work by council," Chahbar said.
If we keep electing the same members of council, one could say that we have only ourselves to blame for a council that feels it has a justifiable mandate for the appropriation and disposal of taxpayer money as it wants. However, I think it more likely that Londoners are apathetic in the face of any credible alternatives to the current council, at least as receive mention in the local media. Therefore, special interest groups in London have a relatively free hand to vote in an unrepresentative council.

Londoners should be asking themselves if they are pleased at the prospect of yet another substantial increase in property taxes. Or, would they be pleased at the prospect of paying the same property taxes that they currently pay. I imagine most of us would breathe a sigh of relief at this time if the increase was only, say, 3 per cent … and turn to the entertainment pages. If, however, property taxes are used to fund expenses that have nothing at all to do with the service of property, would it not be reasonable for us to say "Stop!" and demand some of our money back? Or, in other words:
And why are Londoners facing this spiral of spending and taxation?

There is no pressing reason; no justifiable rationale. We are not in any emergency in this city; the country is not at war nor are we facing an apprehended insurrection – except perhaps by dedicated statists – and we are not facing an economic recession. We hear lots about provincial downloading, but these complaints are so much hot air: the province “downloads” 10 times more in revenue than in mandated expenditures. There is also, of course, the “debt hang-over” from council’s panic-driven millennium projects, but even the debt service on this borrowing is easily manageable given the city’s tax base and financial resources. No, we have massive increases in spending and taxation because city hall bureaucrats think they can get away with it, and because city councillors haven’t the backbone to fight demands for irrational state largess, with any kind of consistent discipline.

I have come the conclusion that raising this matter of uncontrolled spending and taxation is in part beside the point. Yes, we need to reduce our spending and taxation, but not by dribs and drabs. It is no longer good enough to think about incremental changes like 3 per cent budget caps or even our long-standing drive to sustain zero per cent budgets. Too many on council think that when we say zero per cent, this means no sustained, long-term cuts to services; it does not. But there is no longer a good reason to fight this small battle. We need to look at the big picture. And the big picture is the prosperity of Londoners.

— Paul Van Meerbergen, Councillor, Ward 7
The words expressed in this proposal constitute more economic sense in one article than the London Free Press has published in the past decade. The London Fog does not typically endorse politicians of any stripe, but if, by the process of having special interests dominate and determine our own interests in municipal elections, an individual like Paul Van Meerbergen occasionally turns up, I think we should express our support. If we had more councillors like Mr. Van Meerbergen, we should have a more competitive and functional city.

Mr. Van Meerbergen proposes not a reduction in the property tax increase, but a reduction of $1000 per household in property tax from current levels by 2006 via
a $104.6 million spending, taxation and borrowing cut to our $834 million 2005 budget. This will mean a 24% property tax reduction in the 2005 budget – assuming a net average property tax load of $2700.00 (without education taxes). These savings come from a reduction of $39.2 million from the current operating budget, $32.3 million dollars from the capital budget, and another $33.1 million from non-obligatory operating and capital reserve funds.

A 24% reduction in property taxes amounts to an average $650.00 in direct household savings in 2005. The remaining $350 in household tax reductions is planned for the 2006 budget.
Paul Van Meerbergen's proposed amendments to the city's capital budget and operating budget can be found here at The London Fog:

Capital Budget Amendments in PDF format

Operating Budget Amendments in PDF format

Paul Van Meerbergen is Councillor for Ward 7. Please email or call him to let him know what you think -- details of how he can be reached can be found here. The people of Ward 7 are fortunate to have this man as a representative, although it must be said that Susan Eagle is also their representative, so I guess no good deed goes unpunished.


Dick said...

You're right. London can no longer afford their local government... and their capital improvement welfare ways. I find it fascinating that the #1 and #2 capital projects proposed (and which the taxpayers are paying for) are both in regard to expanding roadways and services to specific locations which will benefit no one except special interest groups - namely Sam's Club and associated drivle. What would be the cost savings to the average taxpayer if the Fanshawe Road improvements were scrapped? This cushy tax reduction grows even fatter when one considers the $2,457,000 spent on Fanshawe Park/Hyde Park road widenings in 2004.

I note no mention of the elimination of these and other 'welfare' road expansions in the good ward councillor's proposed budget. Where's the outrage?

This Councillor Van Meerbergen of yours seems as hypocritical as the rest. I've called him to let him know what I think.

MapMaster said...

Dick, I feel like you've caught me out! There's a reason why the London Fog doesn't endorse politicians; and I taint my lily-white anarcho-capitalist neo-liberal conservative libertarian right-wing conscience and reputation by doing so. And I did note in a google search of Paul Van Meerbergen that he did receive the second highest contributions from "business entities" of any of the elected councillors (most controllers and the mayor received more). Nor did he receive any contributions from unions.

The problem with our present system of elected representatives is not so much that they are bound to observe the interests of some group or another — that is the nature of representation. If it were possible to represent everyone in a riding or ward, we probably wouldn't even need elections because everybody's interests would be the same. The real problem, I believe, is that various levels of government exceed the authority that is given to them. Is it not reasonable for the taxpayer to know whether it is the municipal, provincial or federal level that is responsible for issues of, say, social housing — never mind the debate about whether that is the proper or desirable function of government in the first place.

In the case of property taxes, I think that the name itself suggests its proper function. If property owners are paying tax on the basis of the value of their property, it is fair and reasonable, and I suspect the original purpose, for these taxes to pay for services to property; ie, sewer and road maintenance, and the like. Funding social housing, grandiose capital projects, cultural services — what amounts to bread and circuses — is far beyond the purview of municipal government, never minding the "economic spin-off" arguments that the pyramid-builders like to use to rationalize their pet schemes.

"Our city government cannot do this kind of collective economic decision-making, efficiently, with any kind of competence, or on the right things. City hall bureaucrats and politicians cannot know the individual intentions and interests of 300,000 plus citizens. So the next time a city councillor, controller, or city bureaucrat says he/she can make these decisions for you, just know they are uttering falsehoods or simply don’t know what they are talking about."
Paul Van MeerbergenIf I read your comment correctly, you are not supporting the frivolous use of taxpayer money either.

If property taxes served only those functions that relate to the service of property, then the special interests served by council would in fact be those of the typical property owner. In fact, if road and sewer maintenance are to be considered the function of local government, it would probably not be a bad idea to divide that responsibility into wards, so that the populations of individual wards could consider the costs and benefits to themselves of local projects — I would certainly not argue that the widening of Fanshawe Park Road benefits all Londoners equally, even if they must all contribute.

So I would not disagree that Paul Van Meerbergen serves special interests. The question I have is whether or not the interests of those supporting him and presumably assisting his agenda are more equitable in terms of the proper function of government. In the case of the widening and service of Fanshawe Park Road near the new retail developments, this could not unreasonably be considered a targeted benefit to a particular special interest — the retail developers. However, it could also be argued that these municipal projects serve the interests of a much larger and representative group of consumers and drivers. I used to live up in the north end of town, and I remember the congestion and hazards of Fanshawe Park Road before it was widened up to the Masonville retail developments. These retail developers have no right to expect that taxpayers will fund the convenience of travel to their locations; however, they are not completely responsible for the demand for such services by the "public" once these developments are in place. Nobody is forcing people to try to shop at their stores. As far as capital projects that the city is funding, I consider this to be one of the least egregious in terms of "public interest" as there is something in the nature of a demand for services that benefit the property of not just the developers but also their consumers.

Nevertheless, as you recall from my previous posts about urban planning, if we would like to end the debate about the political nature of municipal projects funding one special interest or another, perhaps it is not unreasonable to consider that government should get out of the business altogether. Let retail developers buy and service the property on which roads to their developments lead. The costs would be passed on to the leasers of these developments and then on to only the consumers who actually use those services. Much fairer, I think. Back in the nineteenth century, many suburbs and transportation projects were created privately and the costs were not distributed to the population but only to those people who benefited from them. Same should go for things like arenas, theatres, orchestras, convention centres, etc.

So it is probably safe to say the Paul Van Meerbergen is somewhat hypocritical — there are very few among us who do not want something paid for by the government. But as I interpret what Publius said in regard to Adam Beck, I do not trust the motives of people who disavow profit — they are after something far more insidious, the power to dispose of other peoples' profits. I'd rather take my chances with the businessmen. If what Mr. Van Meerbergen proposes is even only a semblance of a return to a more proper function of government, not to mention having more of our disposable income left in our own pockets, then I do support him. There is no quick route to the road to sanity, but if Londoners were compelled to support the institutions and projects of their choice through their own voluntary efforts and finances without recourse to draining the pockets of those who do not enjoy or benefit from these institutions or projects, there would be a lot less "special interest" control over city hall. But that's my opinion.

By the way, thank you for slumming it on the London Fog! I am curious, I must admit — did you get a chance to speak to Mr. Van Meerbergen? What did he say? Cheers, and hope to hear from you soon.