Monday, November 14, 2005

Thanks for the two bucks, now scram



There is no better model for default governance of an apathetic population in Canada than the federal Liberal party, an exemplar of electoral success that London city hall mimics beautifully in miniature. Lessons learned by London politicians and bureaucrats from their federal ideological counterparts include:
  • overtaxing citizens every year to produce a "surplus" that can be marketed as the product of sound fiscal management, although both jurisdictions are responsible for a proportionately massive debt and those "surpluses" were taken from taxpayers in the first place;
  • using that surprise "surplus" for debt reduction, a necessary ruse for practicing fiscal responsibility, an unpopular line item at budget time because it would appear to community activist groups to be "discretionary," and hence available, spending;
  • returning a condescendingly small portion of taxes to voters in election years, the value of which as a sales pitch is enormous compared to the actual effect it has on households' tax outlays.
However, the revenue of London's politicians come singly, directly and unobscurably from property owners. Meanwhile, the federal government's ability to raise revenue from any number of sources, many of which are not noticed by household voters, allows them to deflect interest in other sources of revenue, and large "surpluses" in election years can be used to increase spending for placatory special interest groups at the same time as promising miniscule reductions in income tax (the CP story grabbed by the London Free Press describes the Liberals' mini-budget as offering "something for everyone"). This must make London city hall envious — municipal politicians are however tapped out when it comes to handing out cash to conciliatory special interest groups without raising property taxes. After two years of 5.9 and 6.6 per cent property tax increases, the only play left they haven't called is a propitiating reduction in proposed 2006 increases. So, after two consecutive years of $12 million budget "surpluses," senior administrators at city hall are recommending to council that
[a]bout $600,000 of an estimated $8.7-million budget surplus expected at city hall should go toward cutting property taxes,
according to the London Free Press.
Several other projects that would "improve the financial health" of London should get the lion's share of the surplus, staff said in a report that will be presented at Wednesday's board of control meeting.

But the recommendation to set aside less than 10 per cent of the projected surplus [less than $2 for every Londoner] to lower the 2006 tax increase irks at least one city councillor.

"Here we have an opportunity to give Londoners some relief after years of (property tax) increases," Paul Van Meerbergen said. "That's what we should do. "The bottom line: It belongs to the people of London. Give it back to them."

The city's draft budget proposes a five-per-cent hike in property taxes next year.

[…] This latest recommendation was defended by senior administrators during the weekend who call it the city's most responsible option.

"It's our job to spend the money wisely," said city manager Jeff Fielding.
Coincidentally, Jeff Fielding discovers this platitude may have some meaning to his council masters in an election year. You should have thought of that before — you're fired!
The expected $8.7 million is earmarked for several projects in the staff recommendation to council, including:
  • $2 million to cover potential future costs referred to as London's "unfunded liability."
  • $2 million toward the financing of a $7.6-million expansion of police headquarters.
  • $2 million toward paying down the city's debt.
  • $1.5 million to cover for taxes that were expected but can't be collected.
Some Londoners, however, are adamant they deserve a bigger share of the surplus than $600,000.

"Budget surpluses of $12 million for 2005 and the same for 2004 simply means taxpayers have been overcharged for both years," J.W. Wood wrote in an e-mail in response to a Free Press interactive asking what should be done with the surplus. "It is our money and should be returned."

To Van Meerbergen, that's become a common refrain from taxpayers.

"I've heard loud and clear from my constituents that they are carrying a very heavy tax burden and they are looking for relief," he said. "They can't continue to carry this load."

In an effort to draw citizens into the budget process, more than 40 city councillors and staffers attended a budget open house at the London Convention Centre Saturday morning. The event's goal was to explain and discuss city spending with Londoners, said Deputy Mayor Tom Gosnell.

In the end, however, only a half dozen people showed up.

"I think after this I'll feel frustrated if (Londoners) start complaining because they've been given this opportunity," Coun. Harold Usher said during the event.
Londoners ought to be complaining now and forever, of course, but I admit that I had better things to do on a warm November Sunday afternoon than tell city councillors and staff what they already should know — Harold Usher and his buddies should not feel absolved of their responsibility for the past several years of mismanagement and over-taxation. Londoners may finally be gaining the temerity to show Usher their frustration in the simplest and most effective way, by throwing his butt out!

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