Friday, December 2, 2005

London can't afford its local government

This article in the London Free Press is a good snapshot of how Londoners have fared under the recent administration of city staff and our current council:

Londoners in an average home worth $155,689 and earning the city's median income of $59,159 paid 5.7 per cent of that income this year on property taxes and water and sewer charges, according to a study by BMA Consulting Inc. In only 11 of 67 municipalities did taxpayers fare worse, with those in similar cities such as Kitchener and Windsor doing better and those in Hamilton slightly worse. This year's percentage was up from last year, when the average was 5.4 per cent.

[…] The same could be said of city hall, which is saddled with debt far above average. In 2004, the most recent year for which data was available, the cost of paying London's long-term debt topped $38 million. That ate up 5.6 per cent of the city's budget — more than triple the level in Kitchener and 60 per cent more than the provincial median.
In another city, perhaps, recognition of the situation might prompt meaningful action to reduce the property tax burden and the debt. In London, we get a bunch of words that bear no relation to fact designed to keep up the voters' wishful thinking.
The combination of high debt and a high tax burden means the city must continue its fiscal restraint, [said city manager Jeff Fielding]. "We need to stay the course."
Londoners cannot continue to afford "staying the course." By "fiscal restraint," Fielding means no more than whatever might sound reasonable to taxpayers who have had property tax rate increases of 5.9 and 6.6 per cent in the last two years. In practice, fiscal restraint to this administration means capping additional debt at $30 million a year and proposing a 5 per cent hike in property taxes in addition to assessment growth of 2.1 per cent. The current adminstration clearly has no idea what fiscal restraint actually means — Londoners will not have good governance until it removes this adminstration.

For London to reduce its debt and the property tax burden on its citizens, discretionary spending must be curbed or stopped — this is what is properly meant as fiscal restraint. The proposed 2006 capital and operating budgets contains these examples of what the city calls "fiscal restraint" — Londoners can decide for themselves if these items are discretionary spending or not:

Proposed Capital Budget Items
  • Community Development, Forks of the Thames — $1.4 million
  • Community Development, New Affordable Housing — $2 million
  • Community Development, Lambeth Arena Refurbishing — $2.1 million
  • Culture, Various heritage, museum and centennial hall building renewal — $1.4 million
Proposed Operating Budget Items, Regulated Programs
  • Community Programs & Strategies — $56.67 million — +3/5%
  • Environmental Programs — $0.5 million — new funding
  • Social Housing — $12.047 million — +11.1%
Proposed Operating Budget Items, Boards & Commissions
  • London Convention Center — $0.743 million — +11.6%
  • Museum London — $1.458 million — +3.2%
  • Tourism London — $1.558 million — +2.8%
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
Update, Dec. 2, 2005: According to the London Free Press, board of control has approved cuts to the proposed capital and operating budgets to bring the property tax rate increase down to about 3 per cent. It is an election year after all. Nevertheless, with an average assessment increase of 2.1 per cent, a rate increase of 3 per cent still means that property taxes will rise well above the rate of inflation. This is in addition to 9.6 and 5 per cent increases in sewer and water rates respectively. Despite the apparent relief suggested by a lower tax increase than in the past two years, Londoners should not be deceived that the city is able to restrain its own spending.

Highlights of the budgets approved by board of control include:
  • $30 million in new debt as part of the capital budget
  • The Heat and Warmth Program (THAW — subsidizes home heating costs for low income Londoners) — $35,000
  • Implementation of Creative Cities Report Recommendations — $100,000
  • Community gardens programs (people are allotted plots of land to grow vegetables) — $35,000
  • London Art's Council work on Creative Cities
  • $7.6 million for the eventual $34 million expansion of police headquarters