Economics professor to examine the challenge of revenue
Craig Pollett, executive director for Municipalities Newfoundland and Labrador (MNL), says the struggle for towns to find revenue “ has been an issue ever since the day I walked in the door 10 years ago.
“A lot of towns and cities feel they can’t raise enough money to do the things that residents want them to do,” he said.
So MNL hired an economics expert to examine the financial outlook for municipalities.
Memorial University economics professor Dr. Wade Locke will examine the budgets of towns that choose to participate in the study, and use the information to prepare a report on municipal revenue options and their potential impact on municipal operations.
Pollett said while the provincial and federal governments have “done a fairly good job” of paying for infrastructure, some towns are challenged to cover the cost of operating their systems.
“ Towns might get enough money to build a water system, but in some towns the chlorinator is not running simply because they can’t afford to pay for someone to run it, or even buy the chlorine,” explained Pollett.
Pollett said they contacted Locke because, “ We wanted someone with economic credibility to look at how the system works right now, some of the challenges and some of the options.”
In its December newsletter, MNL put out a call to towns across the province to send copies of their 2009 and 2010 budgets to Dr. Locke.
Pollett said Locke will also take a look at the situations in other municipalities in other parts of Canada, and will examine municipal assessment information and provincial data to get a handle on the demographic picture for municipalities to understand who’s paying taxes.
“ We’re hoping he can forecast out how we can raise money,” says Pollett, noting demographics is one of the big challenges for some towns, particularly for those that depend mainly on residential taxes and where many citizens are living on fixed incomes.
In addition to examining revenue challenges, Locke’s report will also examine what towns can do to use their revenue more efficiently, or find more cost-effective ways to deliver services.
The answer may lie in sharing costs with neighbouring towns, says Pollett.
Locke is expected to have his report completed by the end of February. The MNL board of directors will then review the document.
“It may end up just being a pile of analysis that we get and turn into a readable report for our members and municipal affairs,” said Pollett.
“But if nothing else, it becomes the basis for our lobbying efforts. Hopefully we will get a plan out of it for where municipal taxation has to go.”
Pollett added that to his knowledge, this is the first time MNL has commissioned this kind of report.