The Thunder Bay City Council budget situation grows more and
more curious. A media report
yesterday contained what can only be termed contradictory information. On the one hand, the story in the
Chronicle-Journal stated that: “The proposed budget includes a 2.67 per-cent
property tax increase on top of a 1.5 percent hike for the enhanced
infrastructure renewal program.”
This means that the combined property tax increase for this budget year
is actually 4.2 percent. Yet, a little
later in the story, Councilor Linda Rydholm is quoted as saying she was willing
to support the budget because: “At ward meetings and other places, it seems
like people are expecting the 2.67 per cent increase, particularly knowing that
1.5 percent is for infrastructure, roads and buildings.” In other words, the tax increase is
2.67 percent but the 1.5 percent is included.
It would appear that we are still sorting out the size of
the actual increase in Thunder Bay’s 2012 municipal taxes. Moreover, it would appear that even
city councilors are confused as to whether the total increase is 2.67 percent
or 4.2 percent. Add to this the
fact that seven million dollars was inadvertently left out of this year’s
municipal budget and now will be funded out of the reserve fund, one has to
wonder what exactly is going on?
Is there some confusion on the part of the media in understanding council's message? Are city councilors unable to grasp the details and complexity of the
budget process? Are city administrators
and councilors engaged in a strategy of sowing confusion to obscure the true size
of the increase? Or is this simply some giant comedy of errors at taxpayer
expense?
If the total municipal tax increase is indeed 4.2 percent,
it means that total payments to the city by municipal ratepayers will rise nearly
5 percent this year once the rise in water rates of 6.7 percent is
included. In 2011, the water
bill for the average household was 714 dollars while the average property tax bill was
2,501 dollars. Using these figures
to compute a weighted average results in an increase of 4.8 percent in total payments
by ratepayers to the city in 2012 (4.8=0.22*6.7+0.78*4.2). Breaking up a 4.8 percent increase into
three separate numbers may fool some of the taxpayers some of the time but it
cannot fool all of them. If City
Council wants to remain at all credible, it will need to come clean and address
this confusion and very quickly.
This credibility is all the more important given the cost overruns for
operating the new waterfront park and the desire to build a new multiplex that
will also require a large public operating subsidy.
