Unreasonable city tax hikes result from unreasonable city spending

Calgary’s new city council has been sworn in, and at least some new faces are there as a result of a promise to rein in property tax and fee increases. 

The mayor, in his Monday remarks, deflected election-time concern over tax and fee hikes during his seven-year reign. He asserted that he never heard “My taxes are too high, period,” but that voters wanted value for money spent. Some, he said, wanted even more local government services.

I have no doubt the mayor met Calgarians who like that the city clears roads in the wintertime, has public transit, parks and recreation centres, and provides police and fire services, among other uses for tax dollars — most of us do.

But the mayor’s comments skipped over his record, which has been one of unreasonably higher taxes and fees. Increases under Naheed Nenshi have, on average, been nearly double that of his predecessor, Dave Bronconnier. However, given the mayor’s Monday remarks about value, other council members should take him at his word and push for spending reforms. 

To permanently moderate taxes and fees requires getting civic spending under control. That requires short- and long-term policies.

The obvious place to start, and where the mayor and some councillors may find agreement: tell the Calgary Flames that the deal they did not like — free land, free upgrades to surrounding infrastructure and an interest-free $150 million loan — is now off the table, forever.   

There is ample justification to end this discussion. It appears the mayor won re-election in part by standing up to the demand for a “better” deal for the Flames (and a worse deal for taxpayers). 

Also, there was never any economic justification for taxpayers to fund the workplace for a sports team where salaries range from $650,000 to almost $6.4 million annually. And there is widespread agreement among economists that subsidies to sports teams are a poor and economically counter-productive use of tax dollars.

(One either accepts such empirically derived conclusions, or instead, engages in deflective, deficient reasoning: Ad hominem attacks, boosterism and nonsense about “naysayers”.)

After city council dispenses with the notion taxpayers should fund pro sports’ facilities, the mayor and council will then have credibility on reducing other city expenditures. 

In the short term, given that pay and benefits at the City of Calgary make up 45 per cent of tax-supported spending, and that such compensation is 18.7 per cent higher than comparable private-sector positions, according to the Canadian Federation of Independent Business, it is long overdue for city council to press for reductions throughout every pay grid and in every contract.

In response to the 2014 collapse in oil prices, investment and balance sheets, Calgary’s private sector has been reducing staff levels and compensation for years. City hall must now bring its own taxpayer-funded costs in line with what Calgarians can afford. (Instead, in 2014, the city gave its largest union a 14.5 per cent raise over four years. That was already double the forecast rate of inflation.)

Spending reforms that rolls back wages and benefits are a necessary short-term remedy. Another is long term: Reform of the various pension plans.

Problem: Back in 2014, the mayor allied with city unions to defeat provincial plans to reform government employees’ pension plans. At the time, after opposing every single reform by the province, the mayor wrote to the minister then responsible, Dave Hancock, to say he wasn’t “opposed to public sector pension reforms.”

The words were easy to write. That was three years ago and Nenshi never offered up his own reforms.  

Which brings us back to the new councillors: The mayor has not demonstrated a commitment to spending reform in his seven years in office. He will apparently need a push from you.