Sunday, December 11, 2005

City hall cannot be trusted with taxes

The London Free Press reports that council will use only $650,000 of last year's $8.7 million budget "surplus" for tax relief as city staff had recommended in a report — in effect, a few dollars per property owner. The 2006 property tax increase is projected to be 3.2 per cent, in addition to average assessment growth of 2.1 per cent and 9.6 and 5 per cent increases in sewer and water rates respectively — after increases of 5.9 and 6.6 per cent in the past two years. The Free Press reports that $5 million of the "surplus" is to be used on debt obligations and $2 million toward an expansion of police headquarters. The Free Press does not report how council intends to spend the other million. I will presume that it will be spent on "service growth initiatives," a special interest welfare wish list* — both the Merrymount Children's Centre and the Boys' and Girls' Club are already slated to receive $200,000 each should the "surplus" exceed $8.7 million.

No councillors supported Coun. Paul Van Meerbergen's proposal to use all $8.7 million to reduce taxes. Coun. Rob Alder suggested that $1 million of the $5 million earmarked for debt reduction be used for tax relief, a move supported by Cont. Tom Gosnell, but city manager Jeff Fielding immediately countered that $1 million would be found "elsewhere" rather than from the $5 million. Fielding's insistence on debt relief would be perplexing, given that neither he nor his staff are unaccountable to taxpayers, except that it is instead disingenuous — the proposed 2006 capital budget includes $30 million in new debt.

As further evidence that neither council nor staff can be trusted with taxpayer money, these fanciful notions were tossed out:

If council had used last year's surplus to cut this year's taxes, next year's rates [rate increases] would now be about seven per cent, rather than a projected three per cent, staff said
…but only if the budget contained the same spending items that staff recommends year after year. Spending on big-ticket capital projects, grants to community associations that should be self-sufficient, and middle-class liberal welfare projects is not an inexorable law of nature — unfortunately, staff has no reason to believe that council sees it any other way:
Paying debt produces stable budgets without major tax hikes, council members said
…as though reducing spending would not have crossed anyone's mind. Paying off debt would be a good thing, of course, if the city were not incurring $30 million in new debt each year above and beyond any debt retirement.
All on council opposed Coun. Paul Van Meerbergen's push to use [the] surplus to reduce taxes, but none more sharply than Controller Gord Hume.

"The motion is only a cheap election stunt. That's an outrageous way to do things… We shouldn't jerk taxpayers around," Hume said.
Council's attempt to keep the property tax hike to around 3 per cent is, if anything, the cheap election stunt — city hall had made no such grandstanding effort to control rate increases in the previous two years. Hume should be reminded that Van Meerbergen has been absolutely consistent — election year or otherwise — in his efforts to reduce property taxes.
Van Meerbergen fired back, saying taxpayers have been hit with tax hikes in recent years because, from 1999 to 2003, council, which included Hume, borrowed $500 million to spend on projects.

"I've heard comments about outrageous treatment of taxpayers — what would you call that?" Van Meerbergen said.

*Proposed Operating Budget Items, Service Growth Initiatives, identified to be funded by assessment growth
  • Fanshawe Pioneer Village — $50,000 (already endorsed by council)
  • Expansion of "Live Healthy/Work Healthy" Program — $25,000
  • Employee Recognition Program — $125,000
  • Implementation of Creative Cities Report Recommendations — $100,000
  • Orchestra London, Grand Theatre — $146,164
  • Non-Profit Arts Organizations — $14,000
  • Arts Bursaries, Arts and Athletic Grants — $14,000
  • Special Needs Resourcing — Enhanced staff and training supports for inclusion of people with disabilities in programs and services — $55,000
  • Canada Day Fireworks Celebration — $50,000
  • London Regional Children's Museum — $110,000
  • LTC Subsidy Program, Blind — $25,000
  • LTC Subsidy Program, Seniors — $10,000
  • LTC Subsidy Program, Low Income Londoners — $100,000
  • Seniors' Freedom Pass — $801,800
  • The Heat and Warmth Program — $35,000
  • Pesticide education and reduction program — $130,000
  • Heritage tax reduction program — $50,000
  • Brownfields incentives — $20,000