Year after year, in the summer months, we hear a budget shortfall is projected for year’s end. Then, inevitably, the year-end brings a surplus of $12 million to $16 million. So why the tax raise?
I’m delighted to be a contributing writer to Lifestyles 55 and have been asked to provide my views on various city topics. This column will focus on the City of Winnipeg budget, which is actually the key to how everything happens throughout our city.
Our city continues to enjoy a time of growth and prosperity. Year after year, we see many new housing starts, renovations and revitalization of more established neighbourhoods and more growth in the business sector. We know this because we can see it and all indicators are up: permits issued, beautification programs and new neighbourhoods.
Budget raises questions
Since being elected to city council in 2010, I have learned much about the city’s processes. In my speech on the floor of council in 2012, I said I would not support another tax increase. In 2013, I did not support a budget that adopted a 3.87 per cent increase in property taxes, saw a nearly 50 per cent increase in councillors’ budgets, cut funding to arts and not-for-profit groups and made modest improvements to city services, all the while reducing the opportunity for the public to be consulted. I believe we need to make principled decisions.
Winnipeggers are hard-working people and expect the taxes that they pay to be spent appropriately. We are stewards of the public purse and when citizens go to the polls they put their trust in us. Year after year, I see problems with the budget process.
For example, in summer months we hear that a shortfall is projected for the end of the current year. Inevitably, there is always a surplus of anywhere from $12 million to $16 million – so why a tax raise that matches almost to a penny that surplus amount? People have had to take money out of their disposable income – for things like music or sporting activities for kids, cut family vacations or eat out less, all to pay their taxes. Many tell me they really don’t feel they’re getting much more for the extra money they give the city.
The concern about this pattern and the tax increase is twofold. First, this may be a double tax in some scenarios. Unlike other cities in Canada that see significant fluctuations in property values, most Winnipeggers enjoy a steady growth. That year over year growth in property values sometimes results in the city collecting a higher tax. Your property taxes are based on assessed value. When the assessed value increases by more than 10 per cent, citizens pay more taxes. And when the four per cent rise in the tax rate is added, it becomes in part a tax on a tax.
Money isn’t spent
Secondly, why would the city collect a tax and then not use it? That’s precisely what’s happening. The one per cent dedicated infrastructure tax was left largely unused because as bids came in for street work, they were at 2009 prices. By early July, the city had a surplus of $7.2 million in the sum budgeted for the streets that were to be constructed. The city collected more money and has it sitting on the books versus fixing more of our crumbling streets, back lanes and/or sidewalks in 2013.
Winnipeggers were hit hard this year by property tax increases, school tax increases and the increase in the PST. It all adds up. I believe as elected officials we need to do better in managing spending in order to restore trust and confidence at city hall.
Paula Havixbeck is Winnipeg city councillor representing Charleswood-Tuxedo.