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July 21 -August 3
VOL.14 ISSUE. 24

Tax Facts

Lisa Johnson
Published Thursday December 13, 10:46 am
What does a 4.99 percent increase get Saskatoon?

When the City announced that property taxes in Saskatoon will be going up by 4.99 per cent next year — meaning the owner of a $400,000 home will pay an extra $6.50 per month (or about $80 per year) — some cynical residents couldn’t help but ask: what for?

Well, the estimated $7.26-million in extra revenue for the City will be utilized for a long list of amenities. (Don’t worry — we’ll get to those soon.) Most importantly, the extra cash represents Council’s decision to stick to a long-term plan for the City that goes beyond simply fixing the roads.

That isn’t to say that throughout the ten-hour, two-day budget deliberations, there wasn’t a spirited push for an increase to the road maintenance budget. Most councillors spoke up for slashing capital funding and focusing on money for roads, including new councillors Zach Jeffries, Eric Olauson, and Troy Davies. Was the attempted prioritization over other capital projects another example of politically driven decision-making trumping good, strategic planning?

“It’s fair to say that anyone who participated in the last election got some pretty clear instructions from the electorate that roads are important. It’s not that newcomers to council don’t agree with the Strategic Plan, it’s just that we all felt the need to follow the mandate we were given, without raising taxes too much. That’s the perpetual challenge. There are a lot of people in my ward on fixed incomes for whom this will be a struggle,” said Ward 7 councillor Mairin Loewen.

Regardless, the 2013 tax increase was almost inevitable.

“There’s been an underfunding of public infrastructure in this country,” said City Manager Murray Totland on day one of budget deliberations, and he’s right: the major reduction in funding from other levels of government is undoubtedly a national issue. We’ve also watched the cost of services delivered by municipal governments balloon.

But has City Council been too reluctant to raise taxes and properly invest in infrastructure for too long?

“It’s not as though there was a decision made that infrastructure wasn’t a priority, but over the last several years, the expenses related to infrastructure — I’m thinking specifically of roads — have exponentially increased, [while] at the same time, funding allocations have increased in a minor way. There’s been an increase in the price of fuels and asphalts, which has caused the price of some of our road treatments to go up 200 to 300 per cent in the last decade,” says Loewen.

“So, [even] if we increase our road budget two to three per cent annually, we’re looking at a huge deficit in spending, so Council has been aware of the fact that funding isn’t meeting our needs. Also, it was made very clear from the civic election, and from the administration, that this couldn’t wait any longer. We need to start making significant investments fairly quickly.”

On top of that, we’re facing what some euphemistically call “the challenges of growth.”

“We’ve added about 12 per cent to our road network in the last six years,” Loewen notes.

As Council plowed through budget proposals last week, numerous attempts to slash capital spending were defeated. Proposals for better and more residential snow removal, and for cash to sweep bike lanes provided some lively debate, but were also defeated. However, additional cash was approved for snow removal on main roads and in school zones, and Council did give $16,000 to pour some more water into paddling pools.

So intense was the desire to put more money into roads that at one point, Councillor Tiffany Paulsenproposed splitting provincial revenue equally between roads and bridges — shifting half a million dollars from bridge upkeep to roads. Totland, however, pointed out that without adequate bridge maintenance, we could see a Traffic Bridge scenario all over again.

“As tempting as it was, I would argue that it’s a more significant problem when a bridge fails than when a road fails. So we need to be sure that our decisions are balanced,” said Loewen. Paulsen’s motion didn’t pass.

Things also got spicy when Pat Lorje called for a cut to the $220,000 earmarked for professional support to the mayor and councillors, calling it “totally inappropriate” for councillors to be asked to vote on their own compensation. Totland clarified that the money was “in no way, shape or form additional compensation for councillors.” It would be used only “for professional support to the mayor and City councillors,” including for services such as communicating, addressing complaints, and coordinating public engagements, according to the proposed budget. Lorje’s motion was defeated, and the extra money approved.

So, what else got the go-ahead? $600,000 ($1.2 million over two years) for the City’s new website, oft-criticized as far too expensive; an extra $3.5 million to police (even as critics point out recent decreases in crime rates); more money for fire and protective services; and $7.6 million to plan for the north commuter bridge. Councillor Charlie Clark’s proposal for a dedicated active transportation fund also passed, to be included in next year’s budget.

The $11.5 million dedicated solely to roads is an all-time high for Saskatoon, but it nevertheless falls far short of the ambitious $25 million per year some say we need to properly maintain Saskatoon’s roadways.

And, despite the best efforts of our elected officials, it was Totland’s last-minute tinkering that freed up $750,000 so that the City did not have to raise taxes by the originally proposed 5.17 per cent and could still devote an extra 1.25 per cent next year to roads. Totland’s department cleverly adjusted estimates for fuel, software licensing, taxes from growth, grants in lieu of taxes from other governments, and fines. (If I hadn’t been enjoying the meeting in my underwear from the comfort of my own home, with a glass of wine and a lapful of cracker crumbs, everybody in council chambers would have heard a loud, slow clap.)

So: what’s it all mean?

Yes, your taxes are going up. But, the services and initiatives Saskatoon will provide next year are progressive and in some cases vital — especially in the long term. Take, for example, the decision made earlier this year that will see homeowners paying $4.60 per month for curbside recycling starting in January 2013. It couldn’t be put off any longer.

“I think it’s important not to be myopic about the city’s needs. While we acknowledge that there is a major need to invest in infrastructure, a city that only funnels cash into roads is a boring city, and not a well-balanced city, and I don’t think people would like the result that we would get,” says Loewen.

Good point.

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