My last
post on policing resources in the major northern Ontario cities noted that
all five cities saw an increase in policing resources. In 2000, the largest
number of police offers adjusted for population was in Thunder Bay at 171.6
(per 100,000 of population), followed by Sault Ste Marie at 156, Timmins at
153.1, North Bay at 147.6 and finally Greater Sudbury at 143.1.By 2016, Thunder Bay was still first at 199.5
officers per 100,000 of population.It
was followed by Timmins at 196.2, Sault Ste. Marie at 176.7, Greater Sudbury at
160.7 and then North Bay at 152.6.Growth
in per capita policing resources was greatest in Timmins at 28 percent,
followed by Thunder Bay which saw a 16 percent increase.Next highest growth was Sault Ste. Marie at
13 percent, followed by Greater Sudbury and North Bay at 12 and 3 percent
respectively.
Of course,
the logical question that follows next is what was going on in crime rates over
the same period of time?It should be
noted that policing is much more complex in the early 21st century
dealing not only with traditional crimes but also with new crime areas such as
cyber and internet crime.As well,
social issues in general have been consuming more police resources as well as
new standards of accountability which entail more intensive use of policing
resources when dealing with incidents. Homicide investigation is especially resource intensive. Nonetheless,
a look at crime rates it is still a useful piece of information.
Traditional
measures of the crime rate such as criminal code incidents per 100,000 of
population or per police officer measure the volume of crime.One example is the homicide rate and past
evidence has found the homicide rate declining in northern Ontario in a
manner akin to other Canadian cities with the exception of a recent surge in
Thunder Bay.Another measure of crime is
the Crime Severity Index.The Crime
Severity Index combines both volume as well as takes into consideration the
seriousness of crimes by assigning each type of offense a seriousness weight and
generally serves as a complement to other measures.The index has been set to 100 for Canada in 2006 and enables comparisons
of crime severity both at a point in time and over time.
Figure 1
plots the value of the Crime
Severity Index obtained from Statistics Canada for the five major northern
Ontario cities for the period 1998 to 2016.The severity of crime differs across these five cities in any given year
but all cities have seen a decline over time.The largest declines over time have been in Sudbury and North Bay at 36
and29 percent respectively.Next is
Thunder Bay with a 17 percent decline in crime severity between 1998 and 2016,
followed by Sault Ste. Marie at 16 percent and then Timmins at 15 percent.The good news is that while there are annual
ebbs and flows, crime rates over the long term are down in these major northern
Ontario cities.
Municipal
budget season is upon us and expenditures on protection – police and fire – are
some of the most important areas in which municipal tax dollars are spent. Municipal
police services have the responsibility of ensuring the security of residents,
businesses and visitors to their communities and the basic activities are crime
prevention, enforcement of laws, maintaining public order, assisting the
victims of crime as well as emergency services.Over the years, policing has become more
complex dealing with new types of criminal activity in the cyber age as well as
devoting more resources to social concerns.
One interesting
point of comparison for the five major northern Ontario cities is the number of
police officers per 100,000 of population and the trend in this number over
time.Figure 1 plots Statistics Canada
data on police officers per 100,000 for the period 2000 to 2016.In 2000, the largest number of police offers
adjusted for population was in Thunder Bay at 171.6, followed by Sault Ste
Marie at 156, Timmins at 153.1, North Bay at 147.6 and finally Greater Sudbury
at 143.1.By 2016, Thunder Bay was still
first at 199.5 officers per 100,000 of population.It was followed by Timmins at 196.2, Sault
Ste Marie at 176.7, Greater Sudbury at 160.7 and then North Bay at 152.6.
As Figure 2 illustrates, growth in per capita
policing numbers was greatest in Timmins at 28 percent, followed by Thunder Bay
which saw a 16 percent increases.Next
highest growth was Sault Ste Marie at 13 percent, followed by Greater Sudbury and North Bay at 12 and 3 percent respectively.
Another
point of comparison is spending. The BMA Municipal Reports provide some data on
the costs of providing policing services. The rankings for costs generally
parallel those for police numbers. When the net costs per 100,000 dollars of
assessment are compared (including amortization), in 2016 the highest cost was
in Timmins at $441 per $100,000 of tax assessment followed by Thunder Bay at
$434. Next was Sault Ste Marie at $402, then North Bay at $317 and finally
Greater Sudbury at $299.Naturally, this
ranking is influenced by the richness of the tax base and all other things
given cities with a weaker total tax base can expect costs of policing per
$100,000 of assessment to be higher.At
the same time, over the last decade, all five cities have seen a reduction in
the net costs pf policing per 100,000 dollars of assessment.This could be a function of growth in tax
bases as well as other efficiencies and economies.
It is municipal
budget season in Thunder Bay and the inevitable process of thrust, parry and
spin is well underway. First the thrust: the amount spent by the City of Thunder Bay obtained from
the tax levy is going up by 3.6
percent.Moreover, water and sewer
rates as well as tipping fees at the landfill will be going up by
three percent.In an effort to
forestall the inevitable complaints that these increases are too high, the
resulting parry and spin on the part of the City appears to be as follows.
The 3.6
percent increase in the tax levy will only be a 2.9 percent increase to
existing ratepayers after factoring in assessment growth.According to the budget chair: “This is a budget that
stays the course in terms of not reducing services but maintaining investments
while living within our means.”
Moreover,
much of the increase is going to hire new full-time positions and vehicles for
the Superior North EMS.The paramedic service
has seen call volumes grow substantially in recent years as a result of the
aging population and the opioid crisis. As well, according to the budget chair,
in an ideal world “we would stay below the level of inflation,” but there has
been a reduction in provincial transfer payments.
The efforts
by the City to justify a 3.6 percent increase in the levy – that is in tax financed
city expenditure – are pretty standard.Differentiating between existing ratepayers and “new growth”
conveniently sidesteps the fact that in the end it is all tax revenue coming
from city ratepayers.Arguing that we
are “investing” in services and living within our means needs to be considered
within the context of whether the services are cost-effective as well as the
fact the money is not from some kind of endowment but comes directly from city
ratepayers.
As for the
paramedic service, it would be nice to see some kind of breakdown in statistics
as to exactly what the sources of the increased demand are in terms of case mix
and demographic breakdowns.In an
interview on CBC Thunder Bay radio this morning, the chief of the Superior
North Emergency Medical Services also noted that the city has a large transient
population that is a source of increasing demand.This raises the question as to whether city
ratepayers rather than the province should be on the hook to fund what is
increasing regional demand for emergency health services. However, as noted
above, the province is apparently not very interested in raising its grant
contribution.
The most
entertaining line was the one that ideally, we would see tax increases that stay
below the rate of inflation.The last
four years have seen increases in tax revenue all above the inflation rate suggesting
that this aspiration has yet to be achieved by the current city council.Nevertheless, given that it is an election
year one should have goals and dreams to campaign on.
Given that
it is an election year, it is also important to take a longer term look at municipal
finances – in particular I want to focus on Thunder Bay municipal own-source
revenue – that is tax and user fee revenues and then provide some comparisons
to basic economic indicators for the city. The data on total municipal tax
revenue, residential and non-residential tax revenue, and user fees spans the
period 1990 to 2016 and is from assorted past City of Thunder Bay Consolidated
Financial Statements as well as from the Financial Information Returns (FIR) maintained
for each municipality by the Ministry of Municipal Affairs and Housing.For 2017 and 2018, I use current City
of Thunder Bay budget summaries with the total for 2018 a forecast based on
the tax levy increase of 3.6 percent. From Statistics Canada, I have the
inflation rate - inflation is Ontario’s Consumer Price Index with 2002 as the
base year – as well as median total tax filer income and annual employment for
Thunder Bay. Population figures for Thunder Bay are from the Census of Canada.
One point with respect to City of Thunder Bay financial data
is that the summaries and budget information over the last few years do not seem
to provide the tax revenue breakdown between residential and non-residential
revenue. I suspect the reason for this has less to do with economy of
presentation and more to do with drawing attention away from the fact that the
residential share of tax revenue has risen dramatically. While FIR does provide
this information, unfortunately it only becomes available with a lag and 2016
is the last available complete set of FIR data. Overall, municipal finance data
is rather opaque and difficult to use not just in Thunder Bay but Canada as a
whole.Cities could do better when it
comes to being accountable to their ratepayers via concise, comprehensive and
easy to use statistics.
For the period 1990 to 2016 (but forecast to 2018 for
taxation revenue), Figure 1 plots taxation revenue and its two components –
residential and non-residential taxation (commercial and industrial).It then also plots user fee revenue (water
& sewer and other fees) and then the total of taxation revenue and user
fees. In 2016, tax revenues grew 2.2 percent with residential tax revenue
growing at 3.8 percent and non-residential tax revenue actually declining 1.1
percent.User fee revenue also declined
2.5 percent (despite rate increases the previous year). As a result, own source
revenues in 2016 grew a modest 0.6 percent compared to 5.3 percent the year
before.If one looks only at total municipal
tax revenue, it grew 5.7 percent in 2015, 2.2 percent in 2016 and based on
recent estimates (and not FIR data) grew at 3.3 percent in 2017 and will grow
3.6 percent in 2018.
Figures 2 and 3 provide composition information for
taxation revenue and total own source revenue for the period 1990 to 2016. When
one considers only tax revenue, from a 50/50 split in 1990 the distribution by
2016 had evolved into a 70/30 split.The
residential ratepayer in Thunder Bay now provides the City of Thunder Bay with
70 percent of municipal tax revenue. When the picture is broadened to total
own-source revenue, the residential ratepayer in 2016 provided about 46 percent
of own-source revenue, the non-residential ratepayer 21 percent and user fees –
which incidentally are paid by both residential and non-residential ratepayers
-about 34 percent.
Figure 4 plots the average annual growth rates for total
taxation revenue as well as residential and non-residential tax revenue and
user fees, alongside the growth rates for Thunder Bay’s population, employment
and median total tax filer income and Ontario’s inflation rate.The average annual growth rate for taxation
revenue has been 4.1 percent but residential tax revenue has grown at 5.6
percent while non-residential taxes have been growing at 2.3 percent.On average, both residential and
non-residential taxes revenues have grown faster than either population (-0.2%),
employment (-0.1%), inflation (1.9%) and median tax filer income (2.2%).User fee revenue has also grown faster than
all of these indicators at an average of 5 percent.
So, the 2018 municipal budget year is shaping up to be
somewhat modest in terms of increases at least by historical standards.Total tax revenue is anticipated to only go
up 3.6 percent (as opposed to 4.1 percent) while user fee increases of 3
percent look pretty good compared to average increases of 5 percent.But then, 2018 is an election year and I
suspect that we will be in for some pretty steep increases in 2019 once the
election dust clears.If one goes back
to the 2014 election, that budget year saw a 2.2 percent increase in municipal taxation
revenue but they made up for it in 2015 with a 5.7 percent increase.
It probably is a smart strategy to moderate tax increases in
an election year and then raise them steeply early on in the new mandate so that their memory fades by the time the next election rolls around. It
may perhaps be seen as calculating and opportunistic behavior on the part of
our municipal politicians but it seems to work. Thunder Bay residents keep
re-electing the same people over and over again.