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Taxman: I was thinking of this Beatles’ song, recently, after council received the pre-budget report from the treasurer at last Monday’s council meeting. It’s dated, the song that is, but still eerily appropriate (I will have to learn to play it on my ukulele).
Last election, all of us who got elected ran on a platform of keeping costs and taxes low. Okay, that’s a fairly blithe promise; few candidates run on a platform of raising taxes and expenses, and fewer actually ever win a seat in any level of government.
It doesn’t matter if everyone knows taxes will go up after the election, or if there are seriously pressing needs to raise taxes. You don’t run on that platform. Unless, of course, it’s to tax the rich – that seems a rather popular theme these days. Except, of course, among the rich. The 99% of us kind of like the idea… but I digress
This council has consistently attempted to cut costs, rein in spending and keep taxes low. That’s never easy, and often it’s very challenging, but we’ve managed to do so fairly well. In fact, the most recent auditor’s report (an independent audit) showed we have done it very well, in the past three budgets. The deputy mayor has cracked the whip and staff have pulled the oars. So far, the local ship of state has rowed in unison, avoiding the shoals of debt and taxation.
But it’s difficult to maintain a flat tax line. The world doesn’t work that way. Economies are always on the move.
Prices go up, costs go up, fee go up, old things need maintenance or replacement, new things need to be bought, collective agreements have built-in increases. Keeping a zero-percent increase is like the Red Queen’s race in Alice in Wonderland: you run as fast as you can just to stay in the same place:
Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else — if you run very fast for a long time, as we’ve been doing.”
“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
We don’t have the money or the tax base to run twice as fast. But at some point, we have to have some increases if nothing more than to play catch-up with out expenses.
If you haven’t been reading newspaper or watching TV, and been ignoring the radio, here’s a quick summary of what the news has been saying about the economy the past couple of years:
The province is more than $13 billion in debt (the actual amount fluctuates according to how the government wants you to perceive its situation, shifting from $14.5 billion pre-budget to somewhat less post-budget). The province is passing laws to freeze wages and benefits (not, of course, those of MPPs). And the province wasted $1 billion-plus of your money on a political boondoggle around the politically-motivated gas plant closure that you, dear readers, have to pay for through hydro cost increases. The feds are sending termination letters to thousands of civil servants (while adding another 30 MPs’ snouts to the public trough to drain tax dollars on inflated salaries, perks and benefits that would be much better spent on services and support). Both levels are cutting jobs, closing facilities, shutting down services (but not cutting elected representatives’ benefits and perks). programs have been slashed. Funding cut. And the Senate is sucking away our money on oysters and caviar.
Okay, that last bit is hyperbole. They’re still a massive waste of tax dollars that would be better spent on infrastructure, education and health care. The point is: neither the province nor the feds have any big money to hand out right now.
These levels of government have told us, many times, there is no funding available for many projects we have contemplated.*
But in the preliminary report, Monday, the treasurer noted:
Assuming no change to the County-wide tax ratios, the 2014 municipal budget increase based on the assumptions and unavoidable increases outlined in this report is estimated at 10.93%.
That must have caused at least some arrhythmia among council watchers. Three years of zero percent tax increases (while adding two new recreational facilities and reducing our debt!), followed by a whopping 11% hike! I clutched my chest when I read that…
Not going to happen, though. The political will isn’t there. It would be political suicide in an election year. But more to the point: it would be unnecessary. We have ways…
“That clock was broken! How did you get it to start working again?”
“I chust looked at it and I sait, ‘Ve haf vays of making you tock.'”
If I had run on a platform of raising taxes by 11%, I would not likely have won a seat at the council table. Yet there it was. Ever had that moment when you think, “I shouldn’t have had that last slice of pizza…”? That’s how it felt.
That sort of increase would seriously worry some of our residents – seniors on fixed pensions and those working at minimum wage jobs. Keep in mind that the average household income in Collingwood is under $60,000. Food prices are rising rapidly, gas and utility prices are on the rise. Affordable housing is perilously thin for many residents. And while things go up, wages are frozen, pension benefits are frozen, health care benefits are reduced…
Any tax increase can be a challenge for a large portion of our population.
As a politician, it’s disconcerting to contemplate such a hike, even though the money would be used to upgrade some services and facilities. I think of it like a car: a new one would be really sweet. But at what cost? What do we sacrifice in exchange? Maybe we can stretch another year or two out of the old one. A lot of us are in that position. We make ends meet, we get by, but we don’t have a lot to support a big investment.
Realistically, as councillors we have to watch for the interests of the majority, who want – and in many cases need – low taxes. Or at least taxes not to rise any significant amount.And if we want to get re-elected – I assume most of us so – we must do our best to stick to the platform we ran on. After all, it’s one of the only two sure things in life.
Of course, we have to weigh carefully the balance between need and want, the levels of service and support we offer – what can we afford, what can we reduce, what serves us the best, what is extraneous? What makes the quality of life better, and what doesn’t make any difference?
Which questions and issues we will debate and decide in due time. Soon.
We may decide we need a small increase. That may be inevitable. Until then, no one can say for sure what the 2014 taxes will be – except that they won’t be rising 10.93%. Or anything close to that.
* The proposed $35 million multi-use recreational facility at Central Park included. Since there wasn’t any federal or provincial funding available (we asked), and private financing came at a higher interest rate than we could get from a bank, the net result would have been a $35 million addition to our existing debt (doubling it). And, as the treasurer informed me at the time, that would add a little more than 10% increase in the average tax bill. That would have been in addition to the 10.93% proposed Monday night. Consider the impact of a 20% tax increase over two years…
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