Claughton Guest Post: Timing Is Everything - Especially In An Election Year
November 21, 2016, was the day that started the deliberations of Calgary's budget for 2017, which is actually year three of a four-year plan. It is an annual time allocation that gives Council the opportunity to review and revise the operating and capital budget plan for the coming year. To grasp the enormity of what it takes to keep the "big machine" and its needs addressed, the annual Capital Budget for 2014 - 2018 is set at $5.8 billion. According to the City of Calgary website, 48 percent of this spending is derived from taxes.
There is now a proposal being brought forward to cushion taxpayers from an unmanageable increase. This proposal advocates a freezing of taxes by utilizing reserve funds, cost savings as well as a rebate. The reality is that the tax rate increase is 1.5 percent which after they hand back some of our own loot, becomes a 0 percent net tax. Again, dependant on a variety of factors as we may in fact get an increase. Wow… sounds like a commercial jingle by Lucky Charms, “it’s magically delicious." It’s not magic, it is a sleight of hand and it takes advantage of the tough times we have been going through and perhaps, I suggest, what will look good and palatable to the voting public.
Giving back tax dollars already collected does not necessarily mean that this is the best solution. It begs the question, "Is this the best use of our tax dollars?" With reported reserve funds of $544 million at the end of 2015, common sense suggests that either too much money is being collected in the form of taxes or, spending on projects that are considered unfunded could be. All too often we listen to Council's use of the phrases, “unfunded projects” and “infrastructure deficits.” Waiting for matching funding from other levels of Government to move may not be prudent as even they are uncertain of the funding that they will have available.
As we travel the City, we encounter many examples of broken sidewalks, eroded pathways, deteriorating buildings, neglected green spaces and programs including needed funding for the greater good. The City included these in the 2014-2018 budget. What's more, what about the Airport Trail Phase Two Interchange? The estimated costs were more than $78 million in 2014 and this is a much needed component to complete the Airport Trail corridor between 36 Street and Metis Trail N.E.. These issues were debated when the airport tunnel project was being considered. What about the much needed flood mitigation projects yet to be completed? What about the various pedestrian safety and overpass projects throughout the City that again get denied funding? The list goes on and on, but the point is this… last year there were projects that were in need of completion and funding. So why do they continually get kicked down the road and into the future? Or do they?
The City operates as a corporation and as a business. However, a private business operates in a completely different environment than Government. Private business must make prudent cuts and changes as dictated by the economy, in order to survive. The City on the other hand, continues to spend as usual. It borrows money because it can. Sometimes borrowing makes common sense as it benefits citizens down the road. This was illustrated in Council by the multitude of highly dedicated directors overseeing the city operations departments.
Here’s the catch however, private enterprise does not have the ability to control all of the conditions around it. The City sets those conditions related to property and business taxes. If businesses are required to pay for all of the decisions of Council in a disproportionate amount, will this cause a climate for failure? Alternatively, there may be an exodus to other municipalities like Airdrie, that surround the city and that have no business tax (and many other favourable considerations). It is ironic how the bedroom communities are often blamed for many of Calgary's traffic woes as their residents migrate in and out with the morning and evening traffic rushes.
Let’s face it, the annual budget to operate the City of Calgary is massive. At the beginning of the week and “in record time,” the budget was passed with minimal debate. Part of the solution to reduce the tax rate increase was the finding of “a couple hundred million dollars” in cost savings and efficiencies. The budget analysis by our Council is done for the most part, at a very high level. Business units and departments are well-prepared to answer questions and offer some highlights of future plans and commitments. They do excellent work and they are commended of this by City Councillors. This is their profession and they are duly charged to complete these on behalf of all the citizens, businesses, institutions and industries of Calgary.
As committed professionals to the overall process, it is somewhat disappointing that while raising spending at a record pace, they were not able to find more areas in which to save and become more efficient on a day-to-day basis. Every department should be able to find another 1-2 percent in savings on average. This should be possible without sacrificing quality or service considering the overall increase in user fees and fines of late. Consolidation and sharing of resources and personnel combined with better procurement policies, may well be a place to start.
The City allocates operating funds to a multitude of non-profit organizations. Perhaps they should collaborate and share resources and funding to do more with less and deliver those much needed programs and services in a more sustainable manner. Council never asked the tough questions or brought their own ideas to address further savings to this budget. Every bit counts. Limiting travel to all departments for a time makes complete sense. The Mayor questioned the wisdom of a transportation delegation heading off on an upcoming three city fact-finding junket. The purpose, to decide on how the City might be able to implement an electronic pay system… and that is another whole story, isn’t it? The Mayor stated, “please, please, please tell me you are going to these cities for some other reason, I thought this was dead.” My opinion is, if this project is deemed a priority, send the most qualified person to investigate and report back to the committee working on the project. Video-conferencing and FaceTime are accessible if face-to-face contact is really needed, I say, "be innovative for crying out loud!"
The City needs to constantly find ways to best utilize all the funding options and find ways to reduce spending. When funds are taken from the 2018 budget and are being spent in 2017, Council should not only wonder, but ask; “What then?" "Will there be a shortfall that a new Council will need to contend with later?” I say, "there is no later, we are here now, address it now."
Calgarians are happy to have taxation relief during the continued downturn, but they should certainly look at the timing. With October 2017 bringing us to the Municipal Election, the timing of the effort and motivations to finally reverse the trend of significant and impacting tax increases, becomes questionable. This notion of providing relief at this particular time may not be what is the best use of the money collected and essentially not spent. Why not complete projects now while there is a need for infrastructure projects to be completed and a ready and willing construction industry? With a climate of lower costs to complete much needed infrastructure projects now, common sense would suggest to "get the shovels in the ground” and "put away the carrots" and make the best of what is a "trying time" for our great City.
Tim Claughton is a volunteer with Common Sense Calgary, a citizens advocacy organization www.commonsensecalgary.com