Sunday, May 1, 2016

Another Levy with No Clear Purpose

Last Monday, council approved a new bylaw that will allow the city to charge hotels a Destination Marketing Levy, with the levy varying based on the value of the property.  This is not to be confused with the former voluntary destination marketing fee that had no connection to the city, but which was paid to the Destination Marketing Board, which was intertwined with the Tourism Board and the Borealis Music Festival in ways that were never made completely public - that voluntary fee no longer exists, and of course, the money in that fund is long gone.

This levy is, of course, just a new tax with a different name.  I have a few problems with this new tax.  For one thing, I don't think that adequate consultation was done, either with the businesses affected or with council as a whole.  If we're as transparent as we said we were going to be four years ago, then there should have been much more open discussion about the options before it came to council for a decision.

Another problem that I have is that we have no real plan for the money.  It will just go into a special fund, allegedly for attracting large events.  As if this wasn't vague enough, the actual use will be decided, according to the city manager, by a special committee established for that purpose.  Who will be on that committee, and what its parameters will be, has not been determined, or if it has, it hasn't been shared with council as a whole.  It joins another levy, this one paid for by all residents through their taxes, that started out to pay for the construction of the soccer centre.  That use is done, but the money is still being collected and saved, for no apparent purpose.

My preference would be, when we set up these special funds, that they're identified as being for a specific purpose, and when that purpose is met, we stop collecting the money.  My fear is that, once a significant amount has accumulated in one of these special funds, one or more special interest groups will come to council, crowd the chambers, and we'll end up putting the money towards another facility that in the long run, will cost the city far more in ongoing operating and maintenance costs, whether it be a new arena, swimming pool, golf course improvement, or some other structure that some people think will be the magic bullet that will attract new businesses and residents to the city, but will just be added to the list of facilities that can't pay their own way, and that the city is expected to make up any shortfalls.

You would think that we would learn from past mistakes.  But it seems that every time, we go down the same path, and are surprised when taxpayers are annoyed by our inability to change our ways.  As well they should, since it's their money that we're so fast to find different ways of collecting and spending.

"When a new source of taxation is found, it never means, in practice, that the old source is abandoned.  It merely means that the politicians have two ways of milking the taxpayer where they had one before." - H. L. Mencken

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