City councillor concerned taxes are outpacing population growth
Adrian Bell says council should set caps on departmental budgets to prevent increases
Cody Punter
Northern News Services
Published Wednesday, December 18, 2013
SOMBA K'E/YELLOWKNIFE
One city councillor is concerned that the city's budget has grown at a much faster rate than Yellowknife's population over the past decade.
Coun. Adrian Bell reviews some documents during a round of late night budget deliberations last week. During deliberations, Bell suggested that the city should tie increases in its property taxes to the rate of inflation. - Cody Punter/NNSL photo |
While council debated its ninth tax increase in the past 10 years, Adrian Bell expressed worry because property taxes have increased by 29 per cent since 1999.
"Some departments have grown by 10 per cent," said Bell who was one of three councillors to vote against the budget.
In comparison, Yellowknife's population has grown by 11.15 per cent since 2001 and just 1.02 per cent since 2003.
Bell also pointed out that the city's budgets have substantially outpaced increases in the municipal price index (MPI),
The MPI is a locally generated index that is meant to provide a guide to ensure city taxes keep pace with inflation. It calculates inflationary pressures by accounting for staffing and service costs, as well as consumer and construction price indices.
Bell was particularly concerned about this year's increase in the general fund, which will go up by 4.16 per cent in 2014.
In comparison, the MPI for Yellowknife this year was 2.66 per cent.
"Simply saying that it's OK for us to outpace the MPI and population growth every year is not, in my opinion, acceptable," said Bell.
During budget deliberations, Mayor Mark Heyck cautioned against using population growth as a way to measure tax increases.
He said that while Yellowknife's population has only grown by a little more than one per cent in the last 10 years, personal income in the city grew by 52.7 per cent between 2001 and 2010.
"As a share of actual personal income growth in our community, our tax increases have been relatively less," said Heyck during deliberations.
Despite the relative growth in personal wealth, Bell said he believes the city should impose tighter restrictions on tax increases by tying departmental budgets to the rate of inflation.
He said this method of capping tax increases is becoming increasingly common throughout municipalities across Canada.
"In other levels of government, when they are faced with a position like this where money can't be saved effectively without negatively affecting programs and services they provide direction to administration to reduce the departmental budget," he said.
Bell made the point that while council can examine the capital budget in depth, the operational budgets of departments are often too specialized for councillors to delve into.
"When we look at the general fund and departmental budgets, it is difficult to have any impact on spending because we can't wade in the micro, at least not effectively," said Bell.
As a result, it is difficult for council to provide direction to administration when reviewing the general fund.
"A lot of this operational side of stuff is rubber stamping because we really have no way to be involved in the process and to determine where efficiencies can be found," said Bell.
Heyck said the MPI is already used to calculate departmental budgets. However, he said it does not take into account either the costs of hiring additional staff or increases in services.
"It assumes that we're only maintaining service levels," said Heyck. "So it's fine for maintaining what we're already doing, but if councillors are identifying priorities and putting forward things they think the city should be doing that we're not doing now, then that's going to skew the result at the end of the day."
Although council made significant cuts to this year's budget, it also voted in favour of allocating additional funding for several costly items, including $106,000 for increased bus service and $750,000 to repave a stretch of 50 Street.
Nonetheless, when Bell raised the issue during deliberations, several councillors said they were interested in exploring the possibility of providing greater strategic direction to administration for next year's budget.
"If we can get on to that path where council is setting that direction but in a realistic fashion, and administration carries that out, it will hopefully simplify the budgeting process quite a bit," said Heyck.
