Wednesday, July 16, 2008

Local condition forecast

Facing expected demands for wage parity with police services in upcoming negotiations with the firefighters' union, Mayor Anne Marie DeCicco-Best sounded off to the London Free Press against a provincial arbitration process that routinely awards emergency service settlements based on top wage-and-benefit packages throughout the province rather than on "local conditions."

"They don't consider that as part of the equation because they consider us as having bottomless pockets," DeCicco-Best said. "They say we just have to increase taxes."
The logic behind this artificial and effectively unmediated race-to-the-top is concisely summed up by Jim Holmes, president of the firefighters' association:
"The problem with the city in arbitration is they've never been able to prove their inability to pay. They can cry poor all they want, but it's just not factual."
An irrefutable if irreducible equation to taxpayers as long as they maintain any funds of their own at all, but Holmes is not a man to be confronted with any diminishing of his expectations. And after recent negotiation of a contract giving police employees 9.8 per cent in wage increases over three years — a contract that was cited by some CUPE Local 101 inside workers who voted against their own three-year 8.4 per cent wage increase — a process that will inevitably appease any and all of Holmes' expectations must be a cause for concern to both taxpayers and DeCicco-Best.

Admittedly this is a separate concern for DeCicco-Best who, by virtue of being a senior elected politician, is less in a position to worry about paying increased taxes than about having to be seen as the one responsible for exacting them. Having presided over a 35 per cent increase in property tax rates and an 86 per cent hike in water and sewer charges since 2000 — and having voted in favour of every one of those budgets — this would at first seem to be no compelling burden to DeCicco-Best.

But if her apparent damascene conversion to fiscal responsibility must only extend to those expenses her administration cannot directly control, these are rising at an alarming rate — not the least of which are soaring fuel costs and unfunded pension liabilities. If local politicians are just beginning to make mewling noises about fiscal responsibility it is with the private realization that deteriorating economic conditions and reduced prospects for the assessment growth with which they have always mitigated tax increases are shortly going to impose considerable constraints to funding the obligations incurred during a decade-long spree of empire-building and buying constituencies. Whether politicians are willing to suffer the pain of reducing their own expectations, or whether taxpayers will bear the shocking pain of meeting them, will be the question for next year's budget.

See also:

Prospects for assessment growth and tax increases
Decline in assessment growth may expose London's lack of fiscal discipline
Assessment growth: stealth taxation

1 Comment:

Fenris Badwulf said...

Tax the Peasants till they squeek! If they are not squeeking, then they are not being taxed enough. Squeeze the gold from their fingers.