Thursday, October 14, 2010

Finally, a GREAT Question! I vent a little, be prepared.

I had a great question on Facebook and when I started a response it went from being a comment to a full-fledged note to finally this post. The issue is big enough that it deserves a full discussion and this is the kind of thing that hasn't happened in our election.

I've been bursting with a desire to address this but it's been difficult in the context of our campaign where candidates aren't really getting in to the issues in depth. Other candidates seem to be going for the "quick win" of calling for lower taxes or taking credit for things others have done but this is the kind of discussion that really needs to happen... so Derek, thank you for asking the question!

Derek Hall - Bill, what are your thoughts on next year's provincial review of the Municipal Government Act? Crucial for all cities in Alberta - what's GP's position and what should our strategy be?

Hey Derek, the MGA is important for cities and in fact all municipalities in the province. The province has not done a full review of it in some time - although they have announced a few times that they were going to. The problem is that the bill hasn't been updated much since it was introduced in the mid 90's.

The province has been "tinkering around the edges" in a number of ways and there have been a few private member's bills that have attempted to make changes. Most recently I traveled to the Leg to speak against one such bill - in the end our presentation was worthwhile and the committee is recommending the gov't scrap the bill. The point is that there needs to a full review of the bill to ensure it's setting a foundation for Alberta municipalities to be successful.

So, the first thing I think the new council should do is support a resolution from the City of Calgary that will be up for discussion at the AUMA convention after the election. The resolution basically calls on the provincial government to actually start that review process. (View the resolution here )From there the city needs to take an active roll in the review process, both through our provincial association (AUMA) and by doing our own lobbying with the minister and provincial staff.

One issue I'd like to see raised is municipal financial sustainability... the current reliance on property tax is out dated and no longer appropriate for funding the modern needs of communities. In the past property tax did make sense because the services municipalities provided were mostly related to public works and directly tied to property (think of things like roads, sidewalks ect.) Today's municipalities are being asked to provide a much broader range of service including recreation, affordable housing, social services and economic development - most of these don't have any clear connection to the actual property owned in the municipality.

On top of the increased demand for services Alberta's syatem has an underlying inequity that creates municipalities that are "more equal" than others before any home owner or commercial property receives a tax bill. Two specific issues that I'd like to address are:

- INEQUITABLE FUNDING Munis under 5000 population or who are rural (like counties) DON'T PAY FOR RCMP - the province pays it for them.... while cities like GP pay 98% of the cost for our cops. (More info on that from a 2007 post on my blog here ) This is a huge chunk of our budget and if we didn't have to pay for it we could lower property taxes.

- LINEAR TAXES help some municipalities keep residential/commercial property taxes ARTIFICIALLY LOW. This is a complex issue but the verrrrrry simple version is that some rural municipalities in the province have a GIGANTIC source of revenue that really doesn't require services - it's basically free money. Linear taxes are property taxes on things that may cross municipal boarders... think of things like gas pipelines and other utilities. In 2007 the City of GP collected just 2% ($1.3 Million) of it's tax revenue from Linear taxes... Meanwhile linear taxes made up 37% ($17 Million) of the County of GP's tax revenue. The County actually collected more from linear properties than they did from residential properties. Click through the presentation below for the details:

Add those two together (the county doesn't have to pay for police + they have the benefit of $17 million in linear taxes) and it's clear that the city cannot compete with the county on an even basis. To be clear, I'm not saying that the County of GP is at fault - they just have a tremendous advantage that most people don't know about.

These types of inequities are the things I think the City of GP has to lobby to change in any future revision of the MGA. The first step will be in getting the province to agree to actually do the review, the second will be to maintain a more active and involved lobbying schedule, which I've proposed.

It's a shame that the other candidates for mayor aren't ready or willing to really get into the issues like this. It's easy to campaign on simplistic 3 point platforms or by taking credit for projects started by others. I've tried to run on working towards a community vision and I've always been ready to really talk about the issues but there just hasn't seemed to be an opportunity for that - until now. Thanks Derek for asking and giving me a chance to start a very important discussion.


Unknown said...

Thanks for the quick response, Bill. Good overview on where the City and County tax revenues and expenditures differ.

But my real question is - 1) what, specifically, do you thnk the solution is for GP and 2) how do you plan to lobby for it? (Through the MGA review? How?)

Anonymous said...

redlinlThis issue is at the root of most of the municipal sustainability issues and inter-municipal challenges in Alberta. As you point out the answers are not simple & the interests of all Albertans need to be considered. Because it is a complex issue, it warrants a complete review & re-write of the legislation. AUMA tried to start this process, but it will need strong leadership from Mayors throughout the province to happen,


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