Oh What Tangled Webs We Weave….

…when first we practice to  deceive (or  raise the frontage levy)

When not raising property taxes becomes a dogma,  common sense tends to become a rare commodity and politics take over.

If property taxes alone don’t yield enough revenue to pay the bills, but you doggedly stick to the idea of not raising property taxes – something has to give.  What are the options?  The options include raising existing levies (such as the frontage levy), raising or adding  user fees (at libraries,  or swimming pools), or reducing services (arenas).

Picture this:  let’s say the owner of a sports franchise  (for the sake of argument, the Goldeyes) doesn’t want to raise  ticket prices but  still wants to increase revenues.

How can you increase revenue without raising ticket prices?  The answer seems to lie in adding surcharges for the little things that patrons rely on in order to enjoy the experience.   You could charge for vehicle parking.  When patrons walk in the door you raise the price of printed event  programs.  Raise the price of the food and drinks at concessions. Patrons will need to use the washroom, so add a user fee.  You see where this is going.  There are all kinds of things that can be done to raise additional revenue without raising ticket prices.

In other words there are many ways that patrons can be ‘Sammed’.

This is what seems to be happening at city hall.  Councillor Russ Wyatt has brought forward several more examples of how we are being Sammed. According to Wyatt:

In 2007, after much public criticism, the Mayor ended the practice of ‘transfers’ from the water and waste utility of the city into the General Revenue Fund (in other words sewer and water rates were being used to balance the budget).  The Mayor at that time agreed, and likened the practice to the Province raiding Hydro revenues to balance their budget. So he ended the policy.

Now he is attempting to unearth and resurrect the same policy, except he is calling it a ‘dividend’ and not a ‘transfer’.  Don’t be fooled, as it means the same, and confirms that Winnipeger’s are obviously paying too much for their sewer and water rates, now the highest in Canada!

Today this tax/rate grab is equal to $17 million.  The wonders of an 8% dividend policy is that as the water and sewer rates continue to rise (as they are projected to do so), so does the tax/rate grab.

What is even more interesting is that this would never be allowed outside the City of Winnipeg.  Outside the city, municipalities are subject to a little thing called the Public Utilities Board. The PUB would never allow such a rate grab, indeed, they would demand such revenues to be returned to the customer.

At the time of the new Water and Sewer Utility debate, there was great internal discussion of making the utility subject to the PUB.  The issue of loss of control killed this idea.  We now see the benefits to balancing the budget at the expense of w and s rate payers.

Councillor Wyatt then goes on to summarize the impact in terms of the additional revenue flowing into the city and the impact on taxpayers.  He puts it this way:

What does all this mean to the bottom line for tax payers.  The Frontage Levy increase brings in $14 million (and no new money to roads), the dramatic increase in Rec fees hauls in $1 million more (which helps the city ‘market’ out their arenas, now that the Chair of Finance has said Parks and Recreation are NOT a core municipal service–Giving Wpg a monopoly on wisdom compared to every other city in North America), and $17 million more from the Water and Sewer Dividend.

The total is $32 million, or the equivalent of an 8 % Property Tax Increase. Now, I have been the strong advocate over the last few years of a modest tax increase in our budgets.  However eight percent is actually eight times higher than the latest Consumer Price Index for Winnipeg which was projected recently at 0.8%.

I believe these latest developments vindicates my position, as now Winnipeger’s are facing this massive rate/tax/levy increase all at once.  And why?  Last year the Mayor included tens of millions of ‘one time’ money just so he could balance his budget and get past the Civic General Election. Furthermore he continues, without any sense of reason or rational debate, to perpetuate the property tax freeze, now in its 14th year.

I think the Councillor from Transcona has a point!

2 comments on “Oh What Tangled Webs We Weave….

  1. Sel Burrows says:

    Great analysis and very clear explanation of issues.
    it also has a crime relationship.
    The user pay system was what killed inner city teams. As recreation fees go up more inner city kids are excluded from recreation, making them more vulnerable to crime involvement.


  2. Bob Bidurski says:

    So what your saying is the difference between a Property Tax increase and a Frontage Levy increase is only SAMantic?


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