The 2% Holy Grail of Taxes – Bill McQuarrie

Bill McQuarrieColumn Pic

Jan 6/16

2% – The Holy Grail of Tax Increases

A January rite of passage for home ownership begins with the arrival of your Notice of Assessment.  Opening that envelope brings on thoughts of property taxes and memories of promises from City Hall to keep increases to a minimum…Which for some reason are felt to be acceptable and a sign of good management, if kept in the 2% range.  I’m not sure who decided that was the benchmark but our elected officials seem to think it’s an okay hike and proof of their financial prowess.  

That got me to thinking though.  Just where does all our money go?  Well, I spent a bit of time over the Christmas break tracking down the answers to that question and I have a feeling you’re going to be as shocked at the results as I was.  Let me explain by breaking down how your tax dollar was distributed in 2014 and unfortunately it’s a very quick one item answer.

You see, every single dollar, down to the last penny of the $98,000,000.00 collected in property taxes that year, went to Wages & Benefits.  That’s everything you gave, without exception, was needed to pay for staff and contract employees (ie RCMP and Transit) and even that was not enough to cover all staffing costs.  Another $16 million from other sources was required to top up your contribution in order to cover the total wages and benefit bill of $114 million.  We spend 116% of all property tax collected on staffing costs.  Not a cent of your dollar went or will go to infrastructure or other operating expenses.  

By comparison, Prince George, roughly comparable to us in size, spent $89,000,000 on staffing or 100% of what they collect in property taxes.  We seem to be the salary spending winners of the year, beating our closest rival, Prince George, by $25 million dollars.  And yes, to anyone who noticed the numbers and quickly did the math, Prince George also collected $9 million less in taxes than we paid here in Kamloops.  Interesting concept that.  Collect less, spend less.

At this point you might be expecting my solution is to lay off $25 million worth of City staff.  But no, while it’s true they benefit, the staffing costs are the product and result of management and ultimately council.  The same council of course that has been known to jump on “the give me more pay” bandwagon themselves, so let’s try our best not to punish the staff.  It’s a City Council creation and one they have to solve but there’s at least one possible solution.  

What if we set a reachable three year target of reducing staffing costs by a total of 10%?  That’s just over 3% per year and if a hiring freeze was put in place, attrition would likely take care of most if not all of those reductions.  If the City hits their targets, they would not have to increase taxes by the traditional 2% and could actually reduce taxes by 1%.  Nobody gets laid off and we’d get a break on our taxes.  As a bonus, the City would start to get their costs under control and more closely aligned with other cities.

Speaking of getting costs under control, didn’t anyone in City Hall see the writing on the wall when the water meters were put in.  You asked residents to reduce water use and played the conservation card along with the threat of money (consumption tax) as the incentive, so they did exactly as asked.  Could you not see the consequences of that?  You encouraged everyone to consume less, they did and surprise, surprise, the City’s revenues decreased.  Your response and solution is as brilliant and well thought out as the first one…let’s increase everyone’s water rates and in so doing punish the very users asked to help you out in the first place. To recap: You ignored the results of a referendum (called the will of the people), spent millions on equipment, forced water conservation and in the process, decreased City revenues. Is there anyone in City Hall who thinks these things through to their logical conclusion or is planning simply tied to election cycles?  Do you really have to wonder why the voter is increasingly frustrated with and by City Hall?

Recently, Ken Christian mentioned the possibility of Kamloops taxpayers having reached their pain threshold for tax increases.  I have a feeling that Mr. Christian is reading those tea leaves correctly.  However, I think he should have added that many are also looking for and not finding much in the way of leadership or assurances that their money is being well managed.  Instead, they get the same old, same old about a 2% increase in taxes (and far greater increases in service fees) because that’s the way it’s always been done. Simply because it’s the old way doesn’t automatically make it the right or even the smart way.

The performing arts centre was a good indicator of the level of confidence the majority have in our municipal government.  Lack of planning, lack of clear explanations, lack of time and a cavalier attitude towards the cost the taxpayers would have to cover.  Sound familiar when it comes to other projects, costs and expenses that we are asked to pay for?



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