OP-ED: Fairer Taxes and Modest Cuts

Neil MoncktonLast week, a parade of special interest groups, community leaders, big business representatives and union presidents told Mayor Gregor Robertson's council to sharpen their pencils and revise the City of Vancouver's 2011 budget.

Council heard that taxes are either too high or too low. Service cuts are too deep or not deep enough.

But lost in the shuffle were the priorities of citizens.

Over $13 million in cuts are being proposed to balance the 2011 books. City council is also bringing forward a four-per-cent tax hike for homeowners and a minor decrease in commercial taxes in 2011.

What do citizens think of the draft budget? Do they like city hall's recipe for service cuts and tax increases? Based on two recent citizen opinion surveys, the answer is both yes and no.

According to a city-commissioned poll of 509 residents, 51 per cent of citizens favoured a mix of service cuts and limited tax increases, while 24 per cent want taxes raised to ensure there are no cuts. Think City found a similar trend in its annual Citizen Budget survey of 1,758 citizens, with 41 per cent supporting a mix of cuts and taxes and 40 per cent calling for a tax increase to stave off further cuts.

Based on these results, city council has a mandate from voters to keep civic spending in check. But when citizens are asked what to cut and what to keep, the draft 2011 budget appears out of step with public priorities.

At the top of the city's cuts list is corporate services. With a 7.6-per-cent budget cut, this department is responsible for city hall activities that most citizens do not directly use or benefit from, such as the city manager's office, human resources, information technology services and other internal functions.

The next tier of service cuts will affect community services, parks and recreation, and libraries -these three departments will see a 2.6-per-cent to 2.8-per-cent budget cut. The last tier of cuts are to fire, police, engineering and utilities. These cuts range from 0.5 per cent for fire to 0.8 per cent for engineering and utilities.

Except for the police department, both the city poll and the Think City survey found similar levels of public support for libraries, parks and recreation, the fire department, engineering and utilities, and community services. Libraries received the highest level of support in both studies.

Corporate services had the lowest level of public support of all city departments in Think City's survey, with 44 per cent calling for a budget reduction. The city's survey did not gauge support for corporate services.

From the two surveys, it's clear citizens do not support making deep cuts to some high-priority departments while leaving others relatively unscathed.

On taxation issues, there is even less agreement on the direction the 2011 city budget should take.

The majority of citizens are opposed to shifting the tax burden from commercial property owners to homeowners. In Think City's survey, 58 per cent were opposed to shifting two per cent of commercial property taxes to residential property owners, while only 16 per cent favoured the shift. Citizens were not asked their opinion on the tax shift in the city's survey.

What should the city do to address citizen concerns about tax fairness and service cuts?

Think City offered city council two options at the Dec. 2 final public hearing on the city budget:

  • Minimize Cuts Through Fairer Taxation: Council should defer the $5-million commercial property tax break and raise taxes by the rate of inflation to three per cent across the board for all taxpayers.
  • Balanced and Fair Cuts: If the first option is rejected, council should spread the proposed $13.4-million in cuts more equally across all city departments. Reductions should be made by comparing departmental reductions for 2009, 2010 and 2011 to ensure that the overall impact on citizens is minimized.

Think City favours the first option. Tax fairness is restored and only modest cuts of $3 million will be required to the city's 2011 budget.

If council adopts the second option, cuts in service will be spread more evenly across city departments. As well, the mayor's election promise to shift $30 million in taxes from commercial property owners to homeowners will have been fulfilled.

Either way, citizens' priorities will have been better heard in this year's budget consultation.

The results of the Think City 2011 Citizen Budget survey can be found here.

Neil Monckton is the chair of Think City. This article was first published in the Vancouver Sun on Dec. 14, 2010.

Post new comment

The content of this field is kept private and will not be shown publicly.