In approving a four-per-cent tax hike (plus another two for recreation capital projects), Woolwich councillors maintained they kept the budget as tight as possible: they could go no further.
Then came the familiar refrain that the increase will only amount to about $30 a year on the average tax bill. Well, on the municipal portion, which represents 20 per cent of the total. Waterloo Region council has already decided you’ll pay an extra 3.15 per cent, or $43, on its share of ever-climbing property taxes.
You’ll also be paying significantly higher prices for water and wastewater processing again this year.
As usual, none of these rate hikes comes with a commensurate increase in services. We pay more for more of the same, at best.
This is the heart of the conundrum that must eventually be addressed: public sector spending is outstripping the productive sector’s ability to pay. As the former depends entirely on the latter, the gap must inevitably cause upheaval as we question the value-for-money scenario: what are we getting for the cash we pour into the system? And how often can governments keep going to the well before it runs dry?
At some point, local politicians will have hard decisions to make. Not just how to keep increases to four per cent, but how to cut by many times that amount. In the long run, the system we’ve developed is untenable, but the crisis will come long before that. The federal government’s current orgy of spending will have consequences in a few years’ time when we have to eliminate massive deficits.
Recall the ill-considered policies of the Mulroney government, and the remedies that followed under finance minister Paul Martin. The scenario we can expect to see repeated goes like this: the federal government cuts transfer payments to the provinces as it brings its own spending under control; the provinces make cuts to cope with decreased revenues, necessitating cuts to the municipalities; municipalities find far fewer grants and supports coming from Queen’s Park, so they’re forced to find savings in their budgets – perhaps by trimming the fat they’ve accumulated over the last few years as the economy boomed.
As described earlier, a series of hikes that drove property taxes and fees to egregious levels leaves no room for hitting the beleaguered residents with still more taxes to make up the shortfall. The only recourse will be to begin cutting staff and programs, sustaining only those services where taxpayers see actual value for their money.
Before the crunch comes, politicians would be well advised to begin scaling back now. The first step is to learn the word “no.”
Staff and community groups pitch all kinds of ideas to councillors: there is a rationale for every spending request. Taken in isolation, each may make sense, but it’s the role of elected officials to see the big picture, and to nip in the bud empire-building and incremental growth.
“No” also applies to the widening gap between public sector wages and the incomes of those who pay the freight. An extended hiring and wage freeze is a practical first step, allowing the productive sector to close the gap, and eventually resume the higher position before governments of all levels re-examine the situation.
As with addicts of another kind, politicians must learn to just say “no.”
