As the dog days of summer wane, the hounds begin baying at the harvest moon, howling in anticipation of the bounty to come. The crop they reap is always good because the money tree always yields top dollar and is resistant to a slow economy and/or declining markets, and there is a lucrative tree on every little patch of land within their sharecropping domain. The money trees belong to taxpayers and the sharecroppers are our council, and they will pick how many dollars they want from our trees.
The projected tax increase for 2016 currently sits at 4.35 per cent, up from 2.9 per cent in May, and 3.89 per cent in June — and there are still several months before the final tally is done. But City administration has done its due diligence and needs this increase to fuel the machine. (Wasn’t there a council goal of increases equivalent to the Municipal Price Index?)
Where is the money being spent? Well, increases in payroll expenses are up by $9.4 million, presumably for wage hikes and new hires needed to keep the City running in stellar fashion. After all, talented people are needed to decide how to spend our money when faced with declining revenue.
Saskatoon transit is expected to have a shortfall of $900,000. Add to that the $209,000 cost of increasing transit services to the Evergreen area. And then there is the still unknown expense of settling contract with the transit workers and compensation due and owing to that employee group as a result of the illegal lockout. That outstanding sum will make the above $1.109 million look paltry.
On the upside, administration is projecting a revenue increase of $300,000 from recreational facility use, thanks to the lowering of monthly passes for users. But is that $300,000 net after taking into account any increase in maintenance and employee costs as a result of the higher volume usage?
The administration claims part of the projected shortfall is due to $2.6 million less in provincial revenue sharing from the provincial sales tax pool. Because the municipalities get a percentage of the sales tax revenue, coupled with the fact that the province has indicated over the last year that provincial revenue is down, why wouldn’t the City expect to receive less than in years past? When times are good, you get more, and when times are not so good you get less. Makes sense to me. Prudent budgeting always works with a lesser number and, if it turns out to more than was anticipated, that is a bonus.
The true irritant is the “pat on the back” expenditure of $4.1 million to be spent on roadway rehabilitation and sound attenuation walls. Let’s recap where that money is supposedly coming from. In 2014, we received a property tax increase of 7.43 per cent and, out of that unprecedented increase, three per cent was to be spent on roadway rehabilitation in each of 2014, 2015 and 2016.
Rather than doing a special tax levy of three per cent for each of those years that would have restricted spending to roadway rehabilitation only and then would have been removed from our tax bills, council rolled the three-per-cent roadway tax into the overall 7.43 per cent number and called it a dedicated tax, which means it will be on our tax bills for all eternity.
Then, for the 2015 proposed budget, when administration wanted yet another whopping hike — after a public outcry and in order to reduce the increase to 5.34 per cent for 2015 — the three-year roadway program was expanded to four years, which in essence thinned out the amount to be spent in 2015 and 2016. In short, we prepaid the three per cent to be spent on roadway rehabilitation through the 7.43 per cent increase in 2014. There should be no new tax needed for roadway rehabilitation.
Proposed strategies to buffer a large mill-rate increase for 2016 include increasing permit fees and transferring an additional $3 million from the City’s water and waste water utility to supplement the 2016 operating budget. And, I was shocked to learn, about the tens of millions the City strips from all its utility accounts. With respect to the water utility, if this money wasn’t needed for repair and replacement of decaying water and sewer lines, why did the City’s utility collect it from us in the first place? It is nothing short of indirect taxation.
And hasn’t there been concern expressed about our aging underground infrastructure over the last several years and the pending need of another water and/or waste management treatment plant? This is simply a practice of robbing Peter to pay Paul, and when the time comes when we need money for the utility’s purposes, it will necessarily come from a massive tax hike — but that will be after the next election.
The one thing that we could always count on is a low tax increase in an election year, which used to be every three years. In 2006, our increase was 1.86 per cent, in 2009, the hike was 2.87 per cent, and in 2012, it was an incredible four per cent, but by then the boom was in full force and no one cared — we were rolling in dough. In 2012, four-year terms were introduced, and now it is every fourth year that local politicians actually care about tax increases.
After much ballyhoo over the next few months, I suspect we will have a tax increase shy of four per cent and a lot of deferred spending to the 2017 budget. Kind of makes you wonder what tax hikes would be if we had an annual election for our city government.