Monday, Whitehorse Mayor Bev Buckway will open the floor to public comments on her tax-and-spend budget.
Hopefully this will work out better for Her Worship than it did for President George Bush after he challenged Iraqi insurgents to “Bring it on!”
To help out, we have some suggestions on where to trim the fat — perhaps by delaying fancy new digs for city workers. More on that in a minute.
First the math.
This year’s proposed budget sees operational spending rising to $50.8 million from $41.4 million in 2007, a 23 per cent increase.
Capital spending is up to 26.4 million from $16.3 million last year, a 62 per cent boost.
She’s paying for the hikes through increased property taxes, grants from Ottawa and the Yukon government and higher user fees.
Buckway proposes a 7.5 per cent increase in the property tax rate in 2008, with four per cent in 2009 and another four per cent in 2009.
But that’s only part of the story.
If you’re dazed by the city’s 7.5 per cent left jab, wait till you get smacked by the Yukon government’s 16 per cent right hook.
Yukon officials have told the media the average Whitehorse residential assessment is going up 16 per cent.
Since you have to multiply the two together, average property tax increase will settle out in the 25 per cent range.
Then add the two, four per cent increases slated for implementation in 2009 and 2010.
In Buckway’s defence, she correctly notes Whitehorse has low property taxes; the lowest on her list of 25 cities, if you include school taxes.
And our utility charges are only 10th highest on the same list.
As well, now that city officials know how much the Yukon government assessments are going up they will probably tone down their tax increase.
Which brings us to Monday.
What can you tell Buckway at the public forum?
Let’s try to put this in a long-term perspective.
The accompanying chart shows spending and property tax trends since 2005 compared to inflation plus population growth, a rough indicator of how the cost of providing services is going up.
The figures for 2008-2010 are pulled from Buckway’s proposed budget.
Note operations spending rises rapidly in the new budget — by around 12 per cent per year from 2007-10.
That’s high, and is probably not sustainable past 2010.
But, on the other hand, growth was relatively slow under former mayor Ernie Bourassa, so over the whole 2005-2010 period, operations spending is roughly tracking population and inflation.
Now look at the rapid rise in residential property taxes.
Buckway believes residents want increased spending and are willing to pay for it.
Since residential property taxes are rising so sharply, this implies that other revenue sources are growing more slowly.
Finally, look at the capital line.
Thanks to federal gas tax money and other funding sources, the city plans a large wave of capital spending in the next few years.
Such spending comes with risks.
Even if other governments pay to build these new facilities, will we face further tax increases to pay for their operation later on?
The fact the Canada Games Centre has a $2.9-million deficit on a $4.7-million operating budget is not reassuring.
So, a question for Buckway is whether it is wise to use property tax capacity now when it might be needed to operate new roads, a fire hall, an expanded reservoir and other things.
So what should we do?
We all heard a lot of complaining about city spending over the holidays, notably about the pet first aid kits and the now infamous proposed full-time parts person.
(I was once a part-time parts gopher for a car dealership in Whitehorse and I believe I added enormous value. Mind you, I didn’t cost $63,000 per year.)
But all this misses the point.
Even if the parts person is hired and succeeds in lobbying for an assistant and a fancy new parts barcode computer before going on fully paid stress leave, we’re still looking at only a drop in the bucket.
We need to look at the big-ticket items and ask some tough questions.
That’s what council and Buckway should do next Monday.
Which is why you should attend the meeting and help out.
Your columnist has suffered through and inflicted a number of cost-cutting exercises.
It always involves some tough conversations.
Here are some suggestions on where to start.
1. Focus on the big items.
Who cares about the $10,000 for sister city exchanges when there are items like $16 million for a new administration building or $8 million in new graders and garbage trucks?
Since one of the single biggest increases is labour costs at $3 million, some tough conversations will have to happen here.
Is this from automatic wage increases to existing staff or from new employees providing new services to citizens?
What is the plan to manage this increase in future years, including looking at the mix of frontline staff versus costly senior managers?
2. Quantify the benefits.
Ask about the $4 million for computer infrastructure. The budget says this will improve efficiency. Well, which line item is being reduced once it is in place?
Or will the same number of staff still be paid to do their jobs, plus the expenses of a new computer system?
Presumably the savings will be greater than $4 million or the project could be delayed or reduced.
3. Watch out for items that don’t benefit the customer (in this case, you!).
The $16-million admin building comes to mind. Will citizens really be $16 million happier being served in a new building?
4. Avoid false dilemmas and watch out when people say things like, “Agree to the whole package, or the new bus route gets it!”
The budget has several nice, new program changes, such as a downtown loop, off-peak service and 24/7 fire emergency dispatch.
These are clearly set up as the first to go if we don’t agree to the tax increases.
Maybe we should keep these, and instead ask city officials for other options to slow spending.
Ask them to explain why they can’t delay other projects for a year without causing a crisis.
Perhaps the cemetery expansion, trail development or some of the $500,000 in various studies and organizational reviews.
Surely somewhere in the $16.9-million “general government services” there might be a few opportunities.
5. Reverse the onus.
You don’t know the city’s operations well enough to know where to squeeze with the least pain.
That’s the administration’s job.
Keep asking them to explain the benefits that justify growing taxes faster than inflation plus population growth.
Ask them to offer other options to contain spending.
If you don’t think all the options have really been identified, suggest capping property tax revenue growth at inflation plus population and have them figure out the solutions later.
A tax increase may be the right answer for Whitehorse right now.
But judging from the number of new projects and activities in the budget, it looks like we need to have more tough conversations before we should agree to it.
You can participate in the city council budget meeting on Monday at 7:30 p.m. at city hall.
Keith Halliday is a Yukon economist and children’s author.