Time for city to make cuts that actually matter

In the pre-Christmas bustle, you may have missed this telling comment from Mayor Naheed Nenshi in late November: “There will be no more ice skating at Prince’s Island.”

The reference was to next winter, not this one, and it came after 2018 budget deliberations were complete — a process in which city council voted for a 3.8-per-cent increase in property taxes.

The remark was part of the mayor’s musings on civic budget cuts planned for the coming year. They include mowing city boulevards four times annually instead of five, and an end to winter skating at Prince’s Island, a $90,000 savings.

The mayor offered this lecture to potential objectors: “If citizens find that to be unacceptable, then they need to come back to councillors and say, ‘ We want those things back.’”

The skating rink example is handy for politicians such as the mayor, who are reflexively reluctant to reform and reduce spending, and thus moderate the tax burden. (Tax and fee increases under Nenshi have, on average, been nearly double that of his predecessor, Dave Bronconnier.)

To rebut taxpayers who may complain of their tax burden, the winter skating rink cancellation allows the mayor or some councillor to offer a counter-point, as in: “Don’t want higher taxes? Then forget about having your kids skate in that park next winter.”

Actually, ice skating at Prince’s Island serves as an example of the unseriousness with which too many politicians approach budget deliberations.

It is a perfect illustration of how, when they cut any government spending at all — an action as rare as spotting Halley’s Comet — they cut the wrong, minor stuff that makes city life pleasant, while ignoring big-ticket budget items.

In any government budget, there are the significant costs that reoccur every year, most notably in pay, pensions and benefits for civil servants.

Of course, some government employees are a neces- sary part of any functioning society, as are the taxes to pay for their compensation.

However, that doesn’t mean such pay packets should remain forever unreformed. If city council wishes to get serious about making local government affordable for small businesses and homeowners hit by higher property taxes, then council cannot avoid that elephant-in-the-room expense forever.

There is ample justification for bringing pay, pensions and benefits into line with what taxpayers can afford. That’s because compensation and benefit levels are far above the private sector — 18.7-per-cent higher in Calgary than comparable private-sector positions, according to the Canadian Federation of Independent Business.

Does getting a grip on such public-sector premiums over the private sector matter? Indeed it does.

As a percentage of City of Calgary spending, salaries, wages and benefits grew to 53.5 per cent of expenditures in 2016; that was up from 52.2 per cent of spending in 2012. The ratio is even more telling once contract positions are added into the mix.

Together, salaries, wages, benefits and contract positions accounted for 66.8 per cent of the almost $3.7 billion in city spending in 2016.

That was up from 62.9 per cent (of just over $3 billion) in 2012.

If the tax burden for homeowners and businesses is to be moderated in coming years, then the two-thirds portion of the budget that touches on pay, benefits, pension payouts and contract positions must be reformed. Moderate that chunk of the budget and the mayor and councillors will find it easier to find $90,000 annually for a skating rink at Prince’s Island.

That noted, there are relatively minor expenditures over the years that city hall could have avoided, that also would have allowed skating to continue next year.

My favourite example: The $340,000 city contract given to the Pembina Institute in 2013, this for a group that has artfully practised anti-oil and gas advocacy for years. That taxpayer-funded $340,000 could have paid for almost four years’ worth of skating at Prince’s Island.