…the next London property tax hike is only ten months away. City staff are forecasting another 4.5 per cent increase in spending next year, requiring another three per cent hike in property taxes to pay for it after an anticipated 1.5 per cent tax assessment growth. Spending and tax increases well above the rate of inflation have become the norm here over the past five years or so, but so too has spending eventually exceeded the preliminary forecasts in that time. Politicians are already sounding the alarm.
If that's what we're paying staff for, there's one expense that can be avoided. The impact on taxpayers would quite simply be yet higher taxes. The cost of paying London's debt, now over $300 million, topped $38 million in 2004 alone, which made up 5.6 per cent of the city’s overall budget. Council instituted the cap on new debt four years ago after the an all-out spree of deficit-financed feel-good capital projects — the John Labatt Centre, the Central Library relocation and expansion, Covent Garden Market and the Convention Centre — caused the debt to spiral out of control. The deferred spending is coming back to haunt London, as ordinary capital investment in road and sewer infrastructure has been curtailed under the debt cap regime to the point that a massive renewal of investment will soon be required, a condition exacerbated by council's continued use of the capital budget to fund unnecessary and frivolous projects. The much-ballyhooed "infrastructure gap" that municipal politicians use to extort tax dollars from senior levels of government is a product of their own financial mismanagement. Capital investment in infrastructure is now unquestionably a priority, but unless council manages to severely rein in its operating spending, total spending and taxes will continue to rise extravagantly in London.
Board of control yesterday asked staff for a review of the $30-million debt cap on spending on hard services and the impact any increase would have on taxpayers.
Among the other things we've come to expect each year, however, are last minute multi-million tax dollar handouts from the federal and provincial governments that allow council to maintain its projected spending while shaving a few decimal points off of the municipal tax hike. Another is the "discovery" of millions of dollars in surplus tax revenue from the previous fiscal year, giving council the green light to to dispense extra token cash favours to various civic groups, thereby exceeding even the spending projected at the beginning of the budget process. These massive budget "surpluses" are becoming an expedient custom at City Hall.
Despite the good game talked up by councillors each year about financial responsibility, these are substantially the same people who have been representing us for the past six years of extravagant spending and tax increases. I'll take the current hand-wringing with a grain of salt… especially considering that board of control has also instructed staff to "explore the issue" of increasing councillors' $5400 travel allowances to permit them to attend more conferences.
Exactly wrong, Mr. Hume. Conferences are boondoggles. Anything councillors want to learn they can learn from conference proceedings or email — actual attendance is just an excuse to junket. Besides, it's the staff in London that make all the analyses and decisions, except to add even more spending.
And it's not about putting money aside for "boon-doggling" said Controller Gord Hume, who raised the issue.