CFIB critique flawed, politicians say
Spending alone a poor measure of performance
Spending alone is a poor measure of a municipality’s performance, according to local politicians, who add the Canadian Federation of Independent Business’s Municipal Spending Report fails to see the difference between spending and taxation.
CFIB found large variations in operational spending per capita by similar-sized municipalities and singled out municipalities such as Langford, Sooke and Colwood for what it called “excessive spending growth” between 2000 and 2006.
“What they haven’t done is shown that job creation is up 51 per cent,” said Langford Mayor Stew Young, who said the report fails to note that over the past 15 years residential property taxes have gone up .08 per cent and that they will actually drop this year.
“I didn’t use tax money for that spending. What we used was the revenue we got from development. I spent that money on improving Langford and I’ve done that all along for 15 years.”
Saanich Mayor Frank Leonard agreed.
“Spending is not the measure for most small businesses. In my 27 years in small business it wasn’t how much is the city spending; it was how much are they taxing,” said Leonard, a former Union of B.C. Municipalities president and current Federation of Canadian Municipalities director.
The CFIB report, in what it calls “the first comprehensive review of B.C.’s municipal finances,” says local government spending has consistently exceeded population and inflation growth in those municipalities. The CFIB calls spending growth exceeding the population and inflation growth the “fiscal responsibility gap.”
Between 2000 and 2006 Langford increased spending by 193.6 per cent, leading to excess spending of $12.5 million in 2006, the report says. Colwood also experienced spending growth that was significantly higher than population and inflation growth, the report says.
“Among municipalities between 7,500 and 15,000 in population, the worst performing municipality was Sooke, which had a fiscal responsibility gap of 7.12. This is based on a population and inflation growth of 29.1 per cent compared to an increase in operational spending of 207.1 per cent,” the report says.
Leonard agreed the report seemed to be looking at spending without bringing revenue into the picture.
“One of the most glaring examples is when they trash Langford,” Leonard said. “No one has contributed more to economic development in this region than Langford.
“Their benchmarks are all wrong. Their benchmarks should be: What are you contributing to economic development, jobs, and how are you not passing on a deficit to the next generation?”
The report says it is measuring municipal operating expenditures and not capital costs, but Leonard notes debt financing is an operational expense.
And by looking at spending in isolation of revenue, the report fails to recognize municipalities that are doing a good job in attracting funding from senior levels of government, he added.
“For those of us have been good at getting senior government grants and that’s one of the reasons our spending has grown faster than per capita, we should be patted on the back,” Leonard said.
“If we don’t fix up our communities, the first thing that will suffer is the economy — which should be of significant interest to these folks.”
Footnotes in the CFIB report note spending in Colwood, Langford and Highlands was impacted significantly in 2002 when they took over responsibility for the Juan de Fuca Recreation complex. It also notes that spending increases in Sooke have been primarily driven by costs of protective services, which it had to assume five years after becoming a municipality in 1999.
“That is huge — the RCMP contract and our volunteer fire department,” said Sooke Mayor Janet Evans.
Evans acknowledged her municipality has endured double-digit tax increases last year and nearly the same this year, but said hers is also the youngest municipality in the province and has been starting from the ground up. An overheated economy has seen the young municipality’s resources stretched to the limit.
The municipality was successful in attracting senior government grants to build sewers in the core area, but has had to finance its $8.8-million share.
Among the CFIB report’s recommendations is a call for taxation and expenditure limits on municipalities, zerobased budgeting and for a call for municipal leaders to focus on core services and to “ gradually eliminate spending on all items that fall outside their jurisdiction.”
Zero-based budgeting is something most municipalities have been doing for years, and focusing on core services is something both Leonard and Evans said most municipal politicians would love to do.
“The local crisis centre is always asking for money. There’s homeless. You can’t turn those people away when there’s actual people that they’ve got to be supporting,” Evans said. “So local municipalities are stepping up to the plate more and more where this money should be coming from the province but it’s not.
“When it’s in your face, you have to deal with it.”