It's Time to Reinvest
Nov 07, 2008
The Canadian Centre for Policy Alternatives (Manitoba) has released its annual Alternative Municipal Budget. It states that, according to the City’s own projections, it will be facing a $38-million operating budget shortfall in 2009.
It’s apparent that the majority of this shortfall can be attributed to the City’s decade-long tax freeze and it’s more recent decision to reduce the business tax to the tune of approximately $60 million per year.
The Alternative Budget proposes ending the property tax freeze, raising business taxes and indexing property taxes to inflation. Although property taxes in Winnipeg have remained static for a decade, user fees and other charges continue to increase. Real per capita spending has declined during the decade in question, and it’s those least able to afford City amenities that are most affected by new and increasing user fees.
With Winnipeg’s revenues shrinking relative to its population, the CCPA has suggested some other means of raising revenues in the Alternative Budget. One would see a $4 a day fee for those who commute to Winnipeg from outlying communities. Since they utilize municipal services but don’t pay for them through taxes, there is some logic to this proposal.
Other options include a tax on the use of plastic bags and a fee to encourage Winnipeggers to conserve water.
It appears that others have noted the decline in the quality of City services as well. A recent column by Dan Lett in the Winnipeg Free Press entitled “Unfreeze tax, fix sidewalks” outlined the City’s practice of replacing streets without replacing sidewalks and curbs. He attributes this to the City’s efforts to save money and to do more with less.
Lett references the CCPA report and agrees that Mayor Katz needs to raise City taxes in order to “protect key services and infrastructure renewal. “ He adds that Winnipeg “is already in a deep hold and further spending cuts will only deepen it.”
Some responsibility does, however, lie with other levels of government. Mayors of major Canadian cities continually make the case for funding increases to help offset the huge infrastructure deficit facing most municipalities. And the provincial government continues to place the burden of funding education on taxpayers.
Tax-cut advocates like Mayor Katz are now in a tough spot. It was pretty easy to cut or freeze taxes when revenues were healthy. But now that they are drying up, this becomes much more difficult. The only options are to increase taxes or slash spending.
It seems the only option is for a modest and reasonable property tax increase. Deep cuts to government spending, purely to avoid tax increases, will only deepen the hole we are falling into. It’s time for some strong leadership that is prepared to make tough decisions regarding the problems that now confront us.
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