Thursday, November 13, 2008

Waste diversion program tosses financial prospects down the pit

Deputy Mayor Tom Gosnell's recent warning that local taxes might increase 20% or more next year appears less of an exaggerated caution to a spendthrift City Council than a genuine possibility after London's Environment and Transportation Committee recommended an aggressive launch of a green bin program and expanded recycling at an estimated $8.5 million in capital start-up costs and $6.5 million in annual operating costs.

Despite a 35 per cent increase in property tax rates and an 86 per cent hike in water and sewer charges since 2000, the effects of spending growth on taxpayers have been mitigated until now through expansion of the City's assessment base. But after the lowest rate of property assessment growth since 2004 last year, an already weak development prospect as identified earlier this year by the Real Estate Investment Network appears headed for further decline as regional economic outlooks continue to deteriorate; property valuations may even decrease in London. In the absence of assessment growth, taxpayers will begin to face the full brunt of annual spending increases well above the rate of inflation at a time when many can least afford it. Even as Council frets over spiraling expenditures beyond its direct control, it is not difficult to assess the impact of still further hikes in discretionary spending on an already fragile base in current economic and fiscal conditions.

Concerns expressed for the longevity of existing landfill space are misconceived at best and contrived at worst; benefits of postponing expansion by two years have neither been properly costed nor are supported by any data made available to the public, and in any event rely on optimistic assumptions such as full compliance with a new recycling regime which would inevitably entail further regulatory and policing costs. Given that the landfill will need to be expanded at the current or near-current schedule at any rate of diversion, the speculative benefits are bound to be negligible in contrast to more immediate and material tolls on the local economy. The weak credibility of these concerns and speculations suggest that they are being peddled in support of programs whose appeal to Committee members rests less on financial prospects than on prospects for behaviour modification. Unfortunately for Londoners, nothing in this Council's experience is compelling enough to counter this suggestion.

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