MUNICIPALITIES HEAR ONLY WHAT THEY WANT TO

RAMPING UP FOR THE 2017 budget season, municipalities are looking for your input. The process is typically nothing but window dressing, however.

In essence, the budgets are dictated by government desire to spend more by bureaucratic bloat. What the public says is only acknowledged when it suits what staff and politicians want, which is why we see more (often useless) spending, and never cuts or attempts at cost reductions.

In setting tax rates, fees and charges, local governments are always keen to talk about “maintaining service levels” while comparing their increases to other municipalities. It’s a favourite trick in the public sector, used regularly to justify wage hikes in particular. As is always the case, the findings – often cherry-picked – are never used to put downward pressure on salaries and prices, though one could just as easily point out the data show it’s possible to do the job with less.

It’s a self-serving closed circuit. Woolwich or the region raises fees this year, citing its neighbours’ prices. Next year, another municipality can point to us in justifying its desire to take more from taxpayers. And so on and so on in an upward spiral that, unchecked, has no bounds.

Well, of course there is a endpoint: an increasingly disgruntled public’s ability to pay. Or, more pressingly, its willingness to pay for an unaccountable system that does not appear to be in its interests.

With the now well-documented decrease in our incomes and standards of living, governments too have to make do with less, scaling back to focus on the essentials. Hard choices will have to be made. That does not involve comparators.

In the end, staffing is going to be a key issue. Labour costs make up more than 50 per cent of the budget – significant savings will come only with cuts here. There’s no need to be draconian, but wage and hiring freezes as well as attrition are likely to be required to get spending back in line.

Governments of all stripes have been guilty of unnecessary bloating, taking on more and more functions without thought for the long-term implications. There is also a tendency to forego reviews of programs and spending to see if each item is still needed – once instituted, they become entrenched and part of each year’s baseline.

The argument is made that the public has come to expect the level of service now offered, plus, of course, whatever new addition is contemplated, which will become next year’s status quo. Certainly the public can sometimes be unrealistic: we can’t have both more program spending and lower taxes.

More and more, however, we’re seeing higher costs – i.e. taxes – without any commensurate increases in the level or quality of service. At best, we’re paying more for more of the same, though there are growing cases of getting less for more, as with waste collection or water and sewers (suffering the same affliction as the mismanaged electricity system).

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. In the long run, the system we’ve developed is untenable, but the crisis will come long before that. A series of hikes that have driven property taxes and fees to egregious levels leaves no room for hitting the beleaguered residents with still more taxes to make up the shortfall. It’s crunch time.