A Tax Contest from I.M. PERTINENT

[keoadmin]

In honour of Kingston's pending annual tax hike, I’d like to propose a contest. There’s no prize of course because this is a non-profit site but I would like to know – and I’m sure others would like to know – who can remember a time that a municipal council in the City of Kingston actually cut back spending before it hiked taxes? The winner will be the person who can come up with the greatest number of occasions on which a municipal council reduced spending in its annual budget Surely we can find some post-Confederation instances where this happened. Cutbacks have been talked about, of course. Much time and energy has been invested in the last couple of years in something called a service review, but there doesn’t appear to have been much in the way of meaningful savings found. One of the big decisions made during the service review was that the city should get out of the landlord business and sell off some old buildings, one of which was condemned. But this caused such uproar among the not-for-profit groups using one of the buildings that the sale was stopped, or at very least, deferred, with the result that a handful of not-for-profits continue to benefit from city subsidized space while hundreds of other not-for-profits do not.

But I digress. To get back to the contest: I’ll start because I do remember a cutback. Isabel Turner’s council cut funding to arts and community groups from about $1 million a year to around $100,000. At the same time, the city adopted a "competitive bid" system of funding where organizations from the Kingston Symphony to kids sports teams to community service groups have to apply annually for grants to run specific programs. Meaning they can’t ask for money for office space or telephone expenses.

Result for the city: $900,000 in savings.

Result for the community groups: Instead of concentrating on the delivery of services, efforts are focused on dreaming up new funding-eligible programs.

Anyone else?

[Frontenac]

I wonder if we are looking in the wrong places for 'savings'.

The City of Kingston under invested in both capital and service areas for many years. Most of the service reduction suggestions from city hall seemed to be highly selective and narrow in their scope. Costly areas such as KEDCO, the expanding number of senior bureaucrats and vanity projects such as the LVEC have not been on the table.

[DickTindal]

The choice isn't that simple

The choice facing municipal councils is not one simply of increasing taxes OR cutting expenditures. I would suggest that most years councils do cut planned expenditures, whether or not these cuts are sufficient to avoid a tax increase. I would go further and argue that often councils - in a misguided effort to avoid tax increases – cut expenditures excessively and unwisely, creating future problems and also greater costs in the long run.

A good example is provided by the budget experience of Kingston in 1995. When council adopted its budget that year, the daily paper responded with a large headline in bold: Tax Hike Disappoints Critics and Retailers. An accompanying sidebar quoted one councillor expressing disappointment that council hadn’t been serious about making the necessary cuts – rather like the implied criticism of I. M. Pertinent’s Tax Contest. The local Chamber of Commerce denounced the increase as totally unacceptable, and there were calls for council to reopen the budget exercise. Over the next several days there were critical editorials in the newspaper. At least some of the anger appeared to stem from the fact that a number of councillors had pledged (foolishly) during the municipal election campaign the previous fall that they would not increase taxes. The mayor of Kingston issued an apology for the tax increase – an unusual and unnecessary step. The newspaper promptly editorialized that this apology wasn’t good enough. The Chamber of Commerce convened a public meeting at which there was a good deal of wailing and gnashing of teeth about the terrible thing council had done. Eventually, the “dust settled,” the tax increase stayed, and municipal life continued. Lost in all of the verbiage and diatribe was the fact that the city’s tax increase amounted to $26 over a full year for an average residential taxpayer in Kingston. Fifty cents a week was the intolerable tax increase that caused all the ruckus. Also lost in all of the fuss and fury about the tax increase was the fact that council had laboured long and hard to make extensive cuts in expenditures before adopting the budget. Indeed, it was subsequently disclosed that these cuts had extended to such matters as training and development, equipment maintenance, and protective clothing – items that such not have been cut at all, but for the city’s (excessive) determination to avoid any tax increase.

The flurry of road construction activity that snarled most main city thoroughfares this summer reflected a belated effort to make up some of the backlog of infrastructure investment that had been neglected over earlier decades by councils preoccupied with holding the line on taxes. While hiking taxes for no good reason isn’t acceptable, neither is cutting expenditures without careful consideration of the consequences. We need to stop looking at city budgets only in terms of what they take away from us in taxes and recognize that these budgets also represent what the city provides to us by way of facilities, programs, and services that contribute to the quality of life that we enjoy.

[macphail]

"The quality of life we enjoy."

More people would enjoy the fruits of their labour if governments at all levels were able to limit increases to inflation/cost-of-living. Why is it that tax increases are outpacing incomes?

Cheers, Derek

[Lydia]

We need to stop looking at city budgets only in terms of what they take away from us in taxes and recognize that these budgets also represent what the city provides to us by way of facilities, programs, and services that contribute to the quality of life that we enjoy

I agree fully!!! I have yet to meet someone who says ' I LOVE PAYING TAXES". So let's get real. We should look at what we want. get rid of what we DON'T WANT. There is only one thing wrong. How do we are citizens of this city decided what we want BEFORE ELECTIONS, BEFORE BUDGETS GET SET UP. Where do we go to let our politicians what we decided.

Hopefully this will be what would happen with the newly formed Kingston Taxpayer's Association's. Also we should also be able to tell our politicians what we want or don't want on OUR website. Good work asking for this.

I have another question. Derek and I do not agree on one thing. I can understand his position and I LIKE MINE BETTER. lol lol lol.

Can anyone tell me what the difference is between USER PAY AND TAXES?? I have being asking my wallet but so far???? lol lol lol

It keeps telling me there is nothing in it to be able to tell the difference. lol lol lol.

[macphail]

A "user fee" differs from regular taxation in that the user of the service is the one who pays for the benefit they receive. For example, if garbage costs $2/bag to throw out, a fair user fee would be $2/bag. The reason for user fees is to dissuade people from participating in undesirable behaviours (or encourage appropriate) and to charge only those persons who are using the service.

For example, the amount of taxes I pay for garbage (which is built into my tax bill) may be $190. I throw out 1 bag of garbage every 2 weeks while another household, who may pay the same amount, throws out 2 bags of garbage every week. Over the course of the year, I have paid more per bag of garbage (I thow out 26 bags compared to their 104 for the same amount of tax) and in effect, subsidized their consumption of garbage collection services. Hardly fair. A better remedy for this situation is to charge a user fee for the collection and disposal of garbage.

User fees can be priced to reflect the full cost of the service (such as garbage) or a partial cost (like a subsidy...the consumer pays a small user fee and the rest is subsided by the general tax base).

User fees are a form of taxation, but one that is for an identifiable purpose and paid for by the consumer, unlike general taxation that goes into a big bank account and divied up amongst a smorgasborg of services.

Hope that helps Lydia. ;)

Cheers, Derek

[Lydia]

Okay sounds good Users only pays for what they use. Let's take it all the way now. Shouldn't we have USER FEES for everything then. Example, Garbage collections. Transit systems, Highways, Schools, Health Care, Utilities, Police Services, Ambulance Services,

If not why not because you have a good point that it isn't fair when you pay more for a service than anyone else does simply because you don't use it :confused:

That is okay Derek, I understand, Im just asking ???? :D :D :D :D

By the way, Since I blew it on the talk show tonight, My mind and my mouth didn't cooperate with each other. :D :D :D All i could here was crackle crackle dead silence, crackle and crackle while you were trying to collect me to the Host. lol lol