Tuesday, April 17, 2007
He's a Better Writer Than Me
Scott McKeen with the Edmonton Journal had a great column yesterday.
He examines that issue that seems to be a staple of the Letters to the Editor page - property taxes. Scott looks at what the City of Edmonton pays for with the property taxes it collects and makes some great comparisons between the ways in which city, provincial and federal governments do their budgets.
One of my favourite excerpts:
... The high-cost items at city hall are in the police service and transportation department. Cut parks or pools or social services? Sure, but you'll save pennies not dollars.
It's definitely worth a read, he is afterall a real writer.
Strangely enough though I just wrote an assignment for a course I'm taking through the U of A. It shows that the situation is no different in GP than it is in Edmonton. The assignment was:
Financial statements can tell us a great deal about the financial state of an organization. Please review the financial statements of your municipality and briefly discuss the following:
1) What are the assets owned and liabilities owed by your municipality?
2) Where does the money come from and where does it go?
3) Based on this information, what does the future look like for your municipality?
Questions number 2 and 3 are pretty much the heart of Scott's article. So, what was my answer for those two?
The city’s $87.6 million in Revenue comes from;
Municipal Property Taxes ($34M)
User Fees & Sales of Goods ($11.5M)
Government Transfers ($14.2M)
Franchise & Concession Contracts ($4.3M)
Fines, Rentals, Licenses & Permits ($5.3M)
Interest & Investment Income ($1.2M)
Development Levies ($3.7M)
Transfers from Local Boards & Agencies ($5.4M)
Penalties & Cost of Taxes ($330k)
Proceeds on Disposal of Capital Assets ($7k)
Expenditures occur in nine areas;
Transportation Services ($25M)
Protective Services ($21.8M)
Recreation & Cultural Services ($20.5M)
Administrative Services ($8M)
Planning & Development Services ($2.6M)
Public Health & Welfare Services ($1M)
Council & Legislative Services ($744k)
Utilities & Disposal Services ($11k)
The most basic thing that stands out about these numbers is this: the municipality is not sustainable if it must rely on property tax as it’s main source of revenue. The $34M in revenue from property taxes is insufficient to pay for the expenditures of Transportation Services and Protective Services at $46.8M combined. The picture becomes even more foreboding when taking into account the rapid population growth of the city, high inflation in the Alberta economy and the demands of the public for increased services and new facilities.
Ok, before someone takes out the calculator ... I know, the numbers don't exactly line up. A lot of that is from the "$5.4M in Transfers from Local Boards" ... that line item basically reflects the value of the Gymnastics facility. After the Gymniks built it they turned it over to the city. It's now owned by the City of GP, so there's no actual cash there, just an asset. The rest of the difference is just my rounding off to the nearest $100 000.
I know what you're thinking "Bill, get on with it!"
Ok, ok ... Here's my point, in case it wasn't clear:
Municipal Property Taxes at $34 million don't pay for Transportation Services & Protective Services which come to $46.8M. It's the same here in Grande Prairie as it is in Edmonton. I'd be willing to bet that it's the same in every city across the province.