Thursday, December 14, 2006

Richter Report - Dec 14, 2006 - The Mad Hatter's Tax Party

"I guess I’m selfish. I’m here because taxpayers think I’m acting in the best interests of me.” - Old Boy's Club Councillor Quoted!

Council had another “tête-à-tête” on the budget again yesterday. All members were present except for Councillor Kositsky.

After the last budget meeting (December 4, 2006), Council had referred the budget back to staff to come up with ways to reduce the proposed 6.5% tax increase next year to 4.95% (which was the rate that the majority of Council (not me) had agreed to last year).

Staff presented options to Council to consider which would reduce the overall tax rate to 4.99%. They did a masterful job. Their reduction options included cutting $1.4M out of Engineering’s budget for highway pedestrian improvements and road works while leaving in (as Councillor Fox pointed out) such priority items as an $875,000 roof on the Lacrosse Box.

Doom and gloom predictions prevailed about how hard pressed the Township would be to maintain and enhance services if they were forced to live with a 4.99% increase. (Most of us would be ecstatic to have a 4.99% increase in our annual income!).

There was some discussion around the tax burden to the taxpayer and the need to be sensitive to those on fixed incomes. Staff pointed out that there is some relief available for seniors. Apparently, the disabled and widows can defer taxes until they sell their homes. Isn’t that a comforting thought?

It was also clear from the discussion that new growth in the community was only contributing a 4.55% revenue increase when a 9.72% increase was actually needed just to keep up. Obviously, we’re spending more than double what we’re bringing in and that is why we need such a substantial tax increase. So, once again I have to ask: “If new development is not paying for itself, then why are we developing?” (Given the tax burden that development is placing on seniors and long time residents of the Township, I think this is a critical question).

Yesterday’s meeting was an open meeting but no members of the media or the public were present which is too bad. Some of the highlights from the discussion included these gems from my colleagues on council:

Councillor U: “It’s wishful thinking to knock spending back. The papers have already announced a 6.6% increase. Let’s take advantage of it. We’re playing a fools game here (to cut spending).”

Councillor X: “A 6.5% increase is not out of line with surrounding communities. It might not be politically correct but it is correct.”
Councillor Y: “If there was ever a time to look at higher over lower taxes, this is the year because fulltime firefighting is being brought online. Now is the time to get our taxes up so they can compound yearly.”
Councillor Z: “Where I’m coming from, I guess I’m selfish. I’m here because taxpayers think I’m acting in the best interests of me.”
The upshot of the meeting was that the motion (by Mayor Alberts and Councillor Bateman) to limit the tax increase in 2007 to 4.99% was defeated. A second motion (by Councillors Long and Ferguson) to look at a tax increase somewhere between 4.99% and 6.5% (likely at the median of 5.74%) was passed.

I voted against both these motions as I still believe that the tax increase should be no higher than 2% (the cost of a fulltime firehall) and the Township should bring in an efficiency expert to review its programs and spending.

Budget discussions will continue in the New Year.

From my perspective, I’m beginning to feel like Alice in Wonderland at the Mad Hatter’s Tax Party. There is something drastically wrong here. Staff has told us that the cost of living increase in the Lower Mainland is about 1.7%. We know from the last Township survey done (October 2006) that the #1 issue in the Township (by a long shot) is transportation and traffic. We know that new development is providing less than half of the revenues needed just to keep pace. We know that construction costs are ridiculously high because of the Olympics.

So if we know all this, why are we spending the way that we’re spending? Why are we building an $875,000 Lacrosse Box cover when we need more roads? Why are we allowing new development to keep putting us deeper and deeper into the hole? Why are we kidding ourselves that there’s no ‘fat’ in this budget? Why are we supporting tax increases triple what the cost of living increase is?

It’s time to start looking at the equation a lot differently. Maintaining the status quo is just not economically viable anymore. The Township is living way beyond its means – ten more years of annual 6.5% compounded tax increases is neither affordable nor sustainable. We have to find out what the root of the problem is and fix it. Simply throwing more tax money at it is not the answer.

Something has to change – maybe it should be this council.
(Kim Richter is in her 3rd term as Langley Township Councillor and also is a Professor of Business at Kwantlen University College. She holds a masters degree in health administration and was a health care management consultant.) ...

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