City council goes for the tax and spend trifecta

Whitehorse's mayor and city council are going for the tax-and-spend trifecta. They are looking fit and relaxed, and in excellent mid-season form. In Year 1 of their three-year term, they raised taxes.

Whitehorse’s mayor and city council are going for the tax-and-spend trifecta.

They are looking fit and relaxed, and in excellent mid-season form.

In Year 1 of their three-year term, they raised taxes. As page 10 of their 2013 annual report shows, they achieved record tax revenues, record user fees, record net financial assets and record reserves.

This early move marked them out among the field as real tax-and-spend contenders.

In 2014 they raised taxes again. We don’t have the final figures for 2014 yet, but it looks highly likely they will break more records for both taxing and spending.

Hiring eight consulting firms to work on the giant new megaplex civic building project showed confidence. It’s like the “in your face” celebration NBA stars do after a slam-dunk.

Now the mayor has announced another tax hike for 2015, plus a sizeable increase in water and sewer rates.

If their Year 3 tax increase passes to complete the trifecta, then 2015 ought to set another record for city tax revenues and spending.

You have to remember that mayor and council are doing this in the face of some stiff headwinds, or “handicapping” in the language of turf aficionados.

First, it comes after a series of tax hikes by the previous council. Successfully raising taxing and spending after your predecessor already annoyed taxpayers is a political accomplishment of no small order.

Secondly, mayor and council are raising taxes in a recessionary environment. Statistics Canada recently reported that the Yukon economy actually shrank in 2013, the worst economic performance in Canada. And 2014 is not looking like a year to write the Guinness Book of Economic Records about.

Any politician can raise taxes in a booming economy. It takes something special to raise taxes on families and small businesses struggling in a flat economy.

Thirdly, mayor and council are way ahead of the competition with no cover. The federal government has been cutting taxes lately. The Yukon government has left taxes more or less stable for years, with a couple of minor reductions such as a small cut in small business taxes in the last Yukon budget.

It’s a slick move for the city to swoop in and vacuum up those Yukon small business tax savings.

There are a couple of things that highlight how quickly mayor and council have picked up the skills needed for the tax-and-spend trifecta.

I don’t recall any of them saying during the election that they were going to enter the trifecta contest. People voted for them without somehow realizing they would go on a three-year tax-and-spend adventure. This is something every politician dreams of achieving.

On top of that is the huge new $55 million (plus extras) city megaplex project that the mayor announced last month. This has drawn all eyes to the city’s finances, scrutiny that would make lesser politicians blanch as they rushed to the finish line to grab the trifecta trophy.

Also, you have to admire some of the small things. For example, the mayor was pointing out that the Year 3 tax increase was the smallest in years. It’s true, but doesn’t tell the whole story of course.

He’s counting on voters having forgotten the Commutative Principle they learned in Grade 3. Remember, this is the one that says that it doesn’t matter which order you multiply numbers in. For example, 5 x 2 x 1 works out to exactly the same as 1 x 2 x 5.

Making a large percentage tax increase in Year 1 and multiplying it by a smaller percentage increases in Years 2 and 3 results in the same tax take in Year 3 as doing it the other way around.

The mayor did strain credulity by telling the Yukon News last week that the megaplex project doesn’t affect property taxes. How you can hire eight consulting firms, spend $55 million on new buildings, dip into reserves created by previous tax revenues and borrow $29 million and still say it doesn’t affect taxes is a mystery to me.

Perhaps it is just a minor stumble on the way to the trifecta finish line. We’ll know if they make it in the new year.

The good news is that they get to vote on their own property tax increase, so it is quite likely to pass. Unlike Alaska, there’s no requirement here for big projects like the megaplex to get voted on by taxpayers.

The only thing they have to remember is that you have to give the tax-and-spend trifecta trophy back if you get booted out of office in the next election.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Channel 9’s Yukonomist show or Twitter @hallidaykeith

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Dr. Brendan Hanley, Yukon’s chief medical officer of health, speaks to media at a press conference about COVID-19 in Whitehorse on March 30. The Yukon government announced three new cases of COVID-19 in Watson Lake on Oct. 23. (Crystal Schick/Yukon News file)
Three new COVID-19 cases identified in Watson Lake

The Yukon government has identified three locations in town where public exposure may have occurred

Teagan Wiebe, left, and Amie Wiebe pose for a photo with props during The Guild’s haunted house dress rehearsal on Oct. 23. The Heart of Riverdale Community Centre will be hosting its second annual Halloween haunted house on Oct. 30 and 31, with this year’s theme being a plague. (Crystal Schick/Yukon News file)
Plague-themed haunted house to take over Heart of Riverdale for Halloween

A plague will be descending upon the Heart of Riverdale Community Centre… Continue reading

Indigenous lobster boats head from the harbour in Saulnierville, N.S. on Oct. 21. Elected officials in the Yukon, including all 19 members of the legislature, are backing the right of Mi’kmaq fishers on the East Coast to launch a moderate livelihood fishery. (Andrew Vaughan/CP)
Yukon legislature passes motion to support Mi’kmaw fishery

“It’s not easy, but it’s also necessary for us to have these very difficult conversations”

A pedestrian passes by an offsales sandwich board along Fourth Avenue in Whitehorse on Oct. 22. NDP MLA Liz Hanson raised concerns Oct. 21 in the legislature about increased hospitalizations due to alcohol consumption that correlate with an extension in the hours alcohol can be sold in the territory. (Crystal Schick/Yukon News)
Alcohol-related hospitalizations rise after off-sales hours extended

Reduced hours for off-sale liquor establishments likely part of Liquor Act spring reforms

Tourism and Culture Minister Jeanie McLean (formerly Dendys) speaks during legislative assembly in Whitehorse on Nov. 27, 2017. The Yukon government has announced $2.8 million in tourism relief funding aimed at businesses in the accommodation sector that have already maxed out existing funds. (Crystal Schick/Yukon News file)
Tourism relief funding offers $2.8 million to hotels and overnight accommodations

$15 million in relief funding is planned for the tourism sector over the next three years

The Yukon government is asking for all claims in a lawsuit over the Takhini elk herd be struck by the court. (Mike Thomas/Yukon News file)
Yukon government asks for Takhini elk lawsuit to be struck

The Yukon government is asking for all claims in a lawsuit over… Continue reading

The Yukon government has filed a reply to an outfitter’s petition challenging the reduction of its caribou quota to zero. (Yukon News file)
YG replies to outfitter’s legal challenge over caribou quota

The Yukon government has filed a reply to an outfitter’s petition challenging… Continue reading

The Yukon government is encouraging people to get the flu vaccine this year, saying that with COVID-19, it’s “more important than ever.” (Black Press file)
Get flu vaccine, Yukon government urges

The Yukon government is encouraging people to get the flu vaccine this… Continue reading

Benjamin Munn, 12, watches the HPV vaccine in 2013. Beginning Jan. 1, 2021, the Human Papillomavirus (HPV) vaccine will be available to all Yukoners up to, and including, age 26. Currently the program is only available to girls ages nine to 18 and boys ages nine to 14. (Dan Bates/Black Press file)
HPV vaccine will be available to Yukoners up to, including, age 26

Beginning Jan. 1, 2021, the Human Papillomavirus (HPV) vaccine will be available… Continue reading

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

asdf
COMMENTARY: Me and systemic racism

The view from a place of privilege

asdf
Today’s mailbox: Electricity and air travel

Letters to the editor published Oct. 23, 2020

Yukonomist Keith Halliday
Yukonomist: Irony versus Climate

Lately it seems like Irony has taken over as Editor-in-Chief at media… Continue reading

Most Read