Taxes

I hear from a lot of people that they are concerned about taxes. I am too- I have a young family and I own a house, so taxes certainly affect me. I’ve also spent my entire career learning the responsibility that comes with being trusted to administer others’ resources. If elected, making sure that taxes are reasonable and return good value would be one of my top priorities.

Throughout this post I will explain the thought processes I would use when considering spending decisions. I hope I will be one of the people you decide to trust with your tax dollars.

Holding the Line on Taxes

There is a real opportunity for our next Council to do something rare: lower taxes. Some changes are coming to how we work with other municipalities (details at www.voteBressey.ca/icfs). If these changes go well, the City of Grande Prairie will realize some major savings. If we do, they clearly need to go to tax cuts rather than spending increases.

Whether these changes pan out or not, it has been made quite clear to me by many citizens that controlling taxes is a priority to them. I also get concerned when I see development taking place just outside of City limits, and taxes are a factor in this happening.

I’d love to see property taxes lowered, although the pessimist in me doubts this would be feasible without increased regional funding. But right now we are in a time where many families are struggling. Even if we cannot lower taxes, we need to try to keep increases at 0% so that inflation lowers the burden on taxpayers. At the very least, we cannot let this burden increase. Council needs to have a goal of 0% increase and it absolutely cannot allow tax increases to outpace inflation in our current economic environment.

It looks like we are about to go through a time of economic growth. I hope that happens, and if it does we might need to spend more to keep up. But if elected in our current economy, I will work hard to help Council find a budget that lowers or holds the line on taxes. If Council will not do this, I will vigorously oppose any budget decisions that increase taxes beyond the rate of inflation. Now is not an appropriate time for us to be raising tax burdens on our citizens.

My Experience and Promises

Most of my career has been spent in the non-profit sector. As an Area Director in a charity, I administer a budget which I also fundraise. My organisation does not receive much in the way of government grants. Most of our funding comes from myself and a team of volunteers approaching private donors. I regularly sit down with these donors to give an accounting of what we have accomplished with their money. Rightly so, they often ask me rigorous questions about our spending. I have been well trained to understand the great responsibility that comes with using other’s hard-earned resources.

If elected, I will approach budget decisions with the same sense of responsibility. I will work hard to make sure that taxpayers and ratepayers are getting a good return of value. I will work hard to learn about and suggest more efficient solutions to Council. I will also work hard to help you know what budget questions we are considering and to give you input.

You might notice that I didn’t make any specific spending commitments. That is because budgets are complex. There are a lot of practical factors that go into how much programs and projects cost. There are also a lot of political factors that go into which programs and projects get supported by Council. Lots of this information is changing, and lots of it isn’t currently available to me. Budgets are also best considered holistically - individual lines should not be considered in isolation (for example, a lot of projects are great when part of a 0% increase budget but should not be considered when part of a 5% increase budget).

For these reasons, I am not going to talk about individual parts of the City budget here. What I will do is walk you through how I will approach spending decisions. I hope this will give you a clear idea of what to expect from me come budget time if I am on Council.

Assumptions for Budgeting

If elected, here are some assumptions I plan to approach spending decisions with. If there are specific cases where these assumptions should be set aside, I will need very strong evidence to persuade me to do so.

• Regional revenue needs to go to tax savings, not increased spending. There is a possibility that we will see increased revenue and/or program cost savings due to regional partnerships (see www.voteBressey.ca/icfs). If this happens, we need to use it to cut the burden on tax payers rather than increasing spending.
• Natural revenue increases are needed, tax hikes are not. I suspect that Grande Prairie is going to see growth over the next Council term. As we have more people and businesses, we will need to spend more money to service them. This kind of spending increase is important. But future spending increases need to come from an expanded tax base, not from adding more taxes to existing payers.
• Departments don’t typically need budget increases year-over-year. One reason some governments get into trouble: they default to giving across-the-board increases to departments year after year. This is dangerous. Come budget times, the assumption needs to be that no departments need an increased budget. Any increases need to be justified using clear reasoning (expanded service delivery, service to a larger population, replacement of aging equipment, etc…). And when Council increases the budget in one area, by default it should assume it will need to decrease the budget in another area.
• We don’t need to pick up spending from other levels of government. There are many areas where our municipality shares costs with the Federal and Provincial governments. When funding from these other levels decreases, the temptation for municipal government is to compensate by raising its spending. There are also responsibilities of provincial and federal governments that seem underfunded. When this happens, it is tempting to compensate with municipal programs, services, or funding. We need to be very careful when doing this. In general, we should not take on the responsibility of compensating for the shortcomings of other levels of government.
• The time isn’t right for Big Shiny Projects. These are community enhancement projects which are exciting and cost millions or tens of millions. They absolutely play a role in any community, and we will likely need to build some in the future. However, right now I think Grande Prairie needs to focus on more basic projects. Unless they have seen large population growth, tax decreases, and strong commitments from other municipalities part way into their term, the time isn’t right for our next Council to be starting a Big Shiny Project. Read more at www.voteBressey.ca/bsps.

Some Ideas for Savings

Saving money should always be a priority when we are talking about tax dollars. Following are some specific savings methodologies Council should consider. There might be better savings methods for us to use. It would also likely be unwise to use these simultaneously. But each of these ideas should get consideration. Council needs to make a concrete plan to find potential savings within the City.

• Look for efficiency. Any $190,000,000 corporation has room for efficiency, and we should always strive to use tax dollars wisely. However, sometimes it makes sense to formally look for efficiency through service reviews and department audits. Of course, it is a waste of resources to collect information without using it. Council needs to be ready to act on the potential efficiencies found.
• Zero Based Budgeting. This is a method of setting budgets which starts at $0 budgeted- it requires every expense to be justified. This is different than other budgeting methods which start with the previous year’s spending and modify it. Zero Based Budgeting takes a lot of work, so it is an expensive way to do budgets. However, it can reveal savings opportunities. I do not think it should be used on an annual basis. However, we should consider putting in the time and expense of Zero Based Budgeting occasionally. We could do it across the corporation in a single year, or do portions of the corporation every year, getting to every department in the course of a 4 year budget cycle.
• Examine user fees. My understanding is that, when compared to other municipalities, Grande Prairie has low user fees for many services. This has been an intentional decision to stimulate growth (for fees like development applications) and to ensure quality of life for all income levels (for fees like recreation programs). The cost of low fees is that property taxes are higher to subsidize them. I especially get concerned when the City is subsidizing the activities of residents in other municipalities. I am not saying I want to raise fees across the entire corporation. But it might be worth re-evaluating all of them.

Questions to Consider

It is important that Councilors do not just go on their intuition of what is best when making spending decisions. They need to have some sort of methodology for evaluation of each line in the budget. Following are questions I would ask myself when making spending decisions.

For necessary capital projects (roads, buildings, essential equipment, etc…):

• Is due diligence complete? Is the project properly costed, do we have engineering studies, etc…?
• Will this look like a good decision 10, 15, 30 years from now? Is it taking future growth into account? How will the debt effect future taxpayers?
• Have we consulted with other regional municipalities?
• Have we accessed all potential provincial and federal spending?
• Does this address a major safety concern, significantly increase citizen quality of life, or attract industrial development?
• How will the construction phase effect businesses and residents? How are we addressing the hardships construction creates?

For “need to have” programs (maintenance, basic social services, emergency services, etc…):

• Is it actually needed?
• Are other levels of government fulfilling their obligations to the project?
• Can we find savings or better program delivery through intermunicipal collaboration?
• Are we doing this efficiently? Are there cost savings possible?
• Are there partnerships with other governments, agencies, businesses, or non-profits we can leverage to make this better or cheaper?

For “nice to have” programs (parks, recreation facilities, non-profit funding, etc…):

• Where is the budget overall? Are we currently looking at a tax increase or decrease?
• Will this significantly increase the citizen’s economic or social life?
• Will this be accessible to a wide cross-section of citizens?
• Is this part of intermunicipal collaboration- are other municipalities helping us pay for it?
• Is this duplicating service already available in our community?
• Is there a demand for the program?
• Does the program have community support from volunteers and donors?
• Is there a sustainable business plan in place?

I’d love to hear your thoughts. What is a realistic percentage for tax decreases or increases? What assumptions should Council have going into budgets? What are some ideas that could save us money? What other questions does a Councilor need to consider when voting on spending?

Let me know what you think. Find me on facebook. Send me an email. Or stop me on the street when you see me around.

-Dylan