Let’s be clear, on the city budget, we do have options. The belief that there really are none, that the proposed budget has balanced essentials and shared the pain of long overdue and needed austerity is false. There is also much talk of needing to return to ‘core’ city services. The City Charter lays those out very clearly. The health and safety of all inhabitants are prioritized. So for anyone clinging to the so called 3Ps of pipes, parks and pavement, the City owes us more. These three are essential but poverty also begins with p, as does people. Police also begins with p, but they are already getting about 30% of the City’s budget.
The province is another ‘p’ word in this discussion. It also has a responsibility to maintain, or better yet, build the vibrancy of our capital city. However, mere subsistence level funding and even more short sighted cuts to much needed programs and services contribute to the poor health and despair of too many. This, in turn, has led to our fruitless over reliance on the police and its ballooning budget share to counter poverty’s major symptom, crime.
So what are we to do? Just like a single parent working a full-time minimum wage job, we need to find more money. We need to do the hard and unpopular work of raising revenues from those who can afford to pay more. We need to do this so those who struggle in poverty, like the 40 some percent of kids living in Winnipeg Centre (as found in the National Campaign 2000 child poverty by federal riding report -2019), know we’re looking out for them.
Impact fees are certainly a point of contention. Developers have taken the city to court over them. Impact fees provide important revenue for the City, helping ensure that new developments pay for the increased infrastructure they require, while limiting urban sprawl. Before impact fees, each new development placed massive long-term unfunded financial obligations on the City. Developers profited while residents were left on the hook.
This year’s draft budget will cut impact fees by a full 5%. This cut stems from a Council motion last fall that changed the formula to allow a reduction in fees when the cost of new construction declines year over year. Except Statistics Canada estimates that Winnipeg had a 1.3% increase in construction costs last year. Budget 2020’s changes to impact fee will cost the City at least $700,000 this year. The Alternative Municipal Budget demonstrates that an increase from an average amount of $10,000 for a new home to approximately $15,000 will generate at least $5.5 million annually.
And then there is the proposed business tax cut. A quick look at our most recent history demonstrates that for decades, the amount raised has remained stable at around $60 million even as revenues and inflation have grown. This was done by cutting the business tax by half over that time. If the business tax rate had been kept at 9.75% we would have an extra $60 million in revenue. Even if we kept the rate at 4.97% (2019 rate), we would have an extra $1.55 million while remaining one of the least expensive cities in which to do business.
And lastly, property taxes: The number that represents about 55% of city revenues. This table demonstrates the effect of the City’s proposed 2.33% tax as well as the Alternative Municipal Budget proposal of an additional 5% with a $100 rebate. Under this plan, an average priced home valued at $300,000 would pay less in taxes than under the current preliminary budget plan. That is, they would pay $33 more than last year, compared with the $44 increase currently planned. Homes valued less than $218,000 would have no tax increase or a tax decrease under this plan.
The $100 rebate represents just an example of the effect a rebate could have on low-income households. A further consideration could be a deferred property tax increase for seniors in homes with high property values but reduced incomes. Depending on the rebate level and other variables the revenue generated by the tax increase could be between $20 and $30 million.
So, an extra $20 to $30 million + $1.55 million + $5.5 million could be available to pay for $9.5 million in services we’ve highlighted here, given they all contribute to strengthening the social fabric of our city. There would be enough revenue for trees, libraries, recreation etc…. We would even be able to add back the $3.2 million coming out of Transit.
We have allowed short sighted austerity measures to create the conditions in which we have as much as an 18 year difference in life expectancy between neighbourhoods. The WRHA’s recent Community Health Assessment clearly lays out that poverty effects health. Here in Winnipeg, not some refugee camp somewhere else in the world, the premature mortality rate among Point Douglas South residents (highest) is 5x higher than those in River East North (lowest).
The Mayor is now citing COVID-19 health concerns as the reason to push this new 4 year budget through even more quickly than planned. We now only have until Friday. It is true that Council must pass a budget but the City will not stop functioning on April 1st if it does not. There are contingencies. To date, demonstrations and delegations have not been successful in making any changes as the budget recommendations continue to pass in committee as is.
These upcoming meetings are our last chance to be heard!
Here is what is happening at City Hall this week.
Can’t make it to City Hall? Here is how to contact your Councillors.