Taxing rainfall is not a solution to a revenue problem
Says Mayority Candidate Shane Judge
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THUNDER BAY, ONTARIO July 18, 2018 (LSN) City council thinks taxing rainfall is a solution to a revenue problem. I say this proposed new tax is no solution, it’s a symptom of a council that’s out of control.
I’m talking about the plan to create a new city tax on the rain that falls on your home or condo.
The city must raise $150 million over the next 20 years to pay for a new stormwater management plan approved last year.
The management plan itself does make sense. Climate change data suggests we’ll even have more of those big rain storms like the one that damaged so many homes here half a decade ago. We have to find better ways of moving storm water safely to Lake Superior.
But what doesn’t make sense is creating an entirely new tax instead of paying for storm sewer work out of our property taxes, the way we do it now.
A SPENDING PROBLEM, NOT A REVENUE PROBLEM
The city has just awarded a contract to a consulting firm to come up with a formula for taxing your property, one that isn’t based on its market value. Instead, it will likely be based on the size of your lot. Condo buildings will have a different formula. Putting this new tax together and convincing you to buy into it isn’t going to be cheap. The consultants are going to be paid a quarter of a million dollars. The trick will be to make it fair for everyone.
But what isn’t fair is why we’re doing it at all.
Because the city doesn’t have a revenue problem. It has a spending problem.
Failing to make distinctions between “needs” and “wants” has put our city in financial jeopardy and given us some of the highest business and residential taxes in Ontario.
In 2018, the city’s outstanding debt will reach a record $220 million. That’s despite taking what is now an $18-million-a-year dividend from TBaytel. Meanwhile, after years depletion by council, the city manager has declared the city’s reserve funds to be in a state he calls “risky”.
(The city points out that the city’s debt-rating agency has just upgraded the status of our borrowing capacity and says we’re in great shape to take on even more debt. What it doesn’t say is that it’s mainly because of the cash flow generated by TBaytel that we get that rating. The bond rating firm isn’t worried because even if the city piles on debt to the point where it can’t make interest payments, the city can always sell TBaytel and the debt holders will always get their money.)
WHAT DO WE REALLY NEED?
The city’s spending problem arises out of an inability to distinguish between “needs” and “wants”.
In an interview with CBC Radio, City manager Norm Gale said he is philosophically opposed to giving priority to one area of city services over another. Where does that come from?
I believe he’s reflecting the attitude of city councillors who, for years, have demonstrated an inability to think critically about priorities and who make decisions in their own, otherworldly bubble.
Why else when we’re falling behind in basic infrastructure repair to the tune of some $27 million a year are we even considering building a $40 million art gallery on the waterfront?
The art gallery is a perfect example of leadership in a bubble. Instead of consulting with taxpayers and the business community in an honest dialogue about community-based tourism, council has foisted this out-of-the-blue proposal on an unsuspecting public.
It’s a doubling down on a bad bet that waterfront development is going to turn the city into a tourism Mecca. That certainly hasn’t happened. But we are finding out that keeping that waterfront space looking shiny and new is expensive and we don’t have the money to keep it that way.
In my view, this proposed new rainfall tax is a red flag warning to taxpayers: councillors can’t control themselves. They have become like Tolkein’s Gollum. The waterfront is their “Precious” and they’ll do whatever it takes to protect it....even if everyone else falls over the cliff.