Count­ing change

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.

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