Sunday, April 10, 2011

Ongoing Budget Confusion

Council continues to muddle through the budget process. Perhaps part of the strategy is for members of council to get so sick of the process that we just pass the thing at the next opportunity, so we can get back to talking about less stressful matters. But I would contend that setting the budget is the most important thing that a council does, far more important than any ribbon cutting or welcome speech giving, and it deserves all the time that we've given it, and much more thought and serious discussion.

I think that the flat tax (or base tax) concept is still not clearly understood by some members of council. At last week's executive meeting, it was suggested that the base residential rate be reduced from the proposed $100 to $60, and some members of council thought that sounded like an improvement. They may not have thought through all of the implications of even setting a base tax - once that is in place, our tax system will have fundamentally changed, and there will be nothing stopping future councils from increasing the base from beyond $60, or beyond $100, or whatever magical figure they pull out of the air - because, remember, there was no reasoning provided as to why $100 was a good rate (or $60).

Other members of council keep saying that people should pay their fair share. This seems to be based on the assumption that I mentioned in my last post - that everyone should pay an equal amount for fire and police services (as if that is all that your taxes go towards). One of the gaps here is that the police chief says repeatedly that a good portion of the people that the police deal with aren't from Prince Albert - how are they going to pay their fair share?

I wouldn't mind the fair share argument if we considered extending it to all of the services that all tax payers pay for. How about increasing user fees for such city-subsidized facilities as the golf course, the Art Hauser Centre, the Rawlinson Centre, the arts centre, or the field house? Not one of these services are used by a majority of the tax payers in the city, but they're all supported with everyone's tax dollars. People who use these facilities do not pay the full cost, which means that if your kids are in hockey or soccer or pottery classes at these facilities, the city helps to pay the freight, but if you have them enrolled in dance or piano lessons, you're paying the full amount for those activities to a small business owner. And many of the users of those city-owned facilities don't even live in the city, so they're not even paying the additional levy on your taxes that goes straight to the field house, rather than into a basic infrastructure maintenance fund. Perhaps we should have differential rates for non-residents as a start.

And, of course, we haven't seen any detail on the police budget, which will consume one-third of the budget. And for the remainder, there isn't sufficient detail to be able to compare, for example, how our snow-removal budget compares with other cities, so that we can determine if we're providing a reasonable level of service, or if other cities pay less per capita for such a basic service. I'm not talking about needing to know what is spent on pens and pencils in a year (although, mind you, if that number is in the hundreds of thousands of dollars, we wouldn't have any way of learning that with the current budget), but of knowing where the money is going, and identifying where we could and should be spending less.

We should approach the budget from three directions - where could we spend less (reducing discretionary spending, reviewing where staff cuts could be made, handing over city-owned and maintained buildings that are for specialized groups), where could we recoup some of our costs (increasing user fees, having people pay for parking at city-owned facilities - those lots don't plow themselves, you know), and finally, and the last place we should be looking - increasing taxes based on the assessed values of properties, both residential and business.

This council assumes that we should keep on spending what we've been spending (and more), that staff levels should keep increasing, that more and more staff should be moved to management (and higher salaries), and that asking people who directly use city facilities to pay more for what they've always received for below market value might cause riots in the streets. Instead, council has been offered options for various tax increases, and each of these options will increase taxes at greater proportional rates for those residents on lower incomes. That's lazy and ineffective budgeting, and it just isn't good enough.

"If you want to know what God thinks of money, just look at the people he gave it to." - Dorothy Parker

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