Growing city

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What a difference a decade makes. Monday, St. John’s city council publicly introduced its budget for 2013, saying it will cost $244.6 million to run the city in 2013. The mill rate will fall for city taxpayers, but, given the huge increase in the value of municipal assessments, taxes will rise for pretty much everyone.

Now, the city is a very different one than it was in 2003 — back then, the city was worrying about ponying up enough money to build a new central fire station, revamp water treatment facilities at Windsor Lake and start work on the cleanup of St. John’s harbour. It was a smaller city and one with far less construction; the oil boom was only just beginning, and the provincial government was talking about a dire fiscal crisis and the urgent need to hold the line on public service pay.

At the same time, the city was looking at expenditures of $128.8 million that year.

That’s $115.8 million less than this year, meaning that the cost of running St. John’s has risen by just under 90 per cent in the last decade. (To put that in perspective, the Bank of Canada points out that inflation has been running at particularly low levels in the last decade, with a total increase of 18.87 per cent since 2002, or an average of 1.94 per cent per year. Provincial government spending, meanwhile, with one less year in the equation, has risen by some 64 per cent.)

The city’s numbers are going to rise even more: for the first time this year, the city has drawn up a three-year set of budget projections, and by 2015, the city is expecting the total budget to be

$274 million. That will mark an increase of 113 per cent over the 2003 budget — and even as those numbers are being pitched around, the city is talking about looming pension fund and infrastructure deficits that will have to be addressed in future years.

There is no doubt that the city has changed in the last 10 years; it’s bigger, and its challenges are bigger, too.

To quote Mayor Dennis O’Keefe from this year’s budget document, “You only have to take a short drive through our city’s historic downtown to see the impact of our strong economy, as construction cranes dot the horizon on a daily basis. The unprecedented economic growth we have seen in recent years will continue into the foreseeable future. However, with growth comes increased pressures to provide first-class services and infrastructure to residents and businesses.”

With growth also comes an increased tax base, with more homes and businesses to carry the increased fiscal load. The city is clearly busier, and there are more people paying progressively more in taxes.

The only thing missing from that equation is the fact that very few people in the city have seen a correspondingly large increase in their pay; ever-increasing property taxes, quite simply, have to come from somewhere in family budgets.

Governments have to keep in mind that their dreams of progressive and constant expenditure growth can’t outstrip the ability of their residents to pay.

Organizations: Bank of Canada

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Recent comments

  • Happily Retired
    December 13, 2012 - 13:01

    How did this turn into a discussion about Muskrat Falls. Maggy, could you please find another article which even remotely resembles something about Muskrat Falls, and finish your rant on that one.

    • coco
      December 14, 2012 - 05:12

      The USA is building a Super-Hub so electricity will flow across their whole country for $1.5-Billion and investors are putting up the money ( Our ‘Vision’ to extract multiple Billions from ½ a million souls affects city council's budget and every other aspect of our economy. In days gone by, NL was a place where only certain politicians seemed to reap the benefits of our resources. Well guess what. Happy days are here again.

  • Maggy Carter
    December 13, 2012 - 11:53

    Well, to be brutally honest, when it comes to political leadership I think the people of St. John's, like the people of Newfoundland and Canada, are getting the governments they deserve. The one thing that O'Keefe, Dunderdale and Harper have in common is a complete disregard for democracy. They each hold the view that - once elected - they are free to do virtually anything they want with taxpayers' monies. Their attitude is that if you don't like it, you'll have to wait for the next election to kick me out. Even then, in the case of Harper's conservatives, they have found ways to manipulate and circumvent parliamentary rules and election laws to the point that they have managed to get re-elected. It remains to be seen whether O'Keefe and Dunderdale will manage to pull that off, but we shouldn't be too surprised if they do. The voters in this City and in the Province are remarkably docile, trusting, disconnected and disinterested souls. It takes a lot to get them riled up. I think the last thing that even came close was Search and Rescue's abandonment of Burton Winters followed by the shut-down of its local dispatch centre. But generally we seem to be among the most tolerant Canadians when it comes to being ignored and abused by our governments. Big corporations operating in this province typically seek out former premiers and ministers to sit on their boards so they can be assured the kid-glove treatment by governments. But they're probably wasting their money - the history of this province shows clearly our public officials rarely miss a chance to placate big business. Even a mayor who goes around crying all the time about the federal and provincial governments not giving them enough money - a mayor who grabs every windfall he can get from rapidly appreciating real estate values - a mayor who has overseen a decline in basic public services - can still find a half-million dollars to help a cash-rich federal agency build a fence for which the city has no responsibility. But this type of financial mismanagement is small potatoes alongside the catastrophic implications of Muskrat Falls. Polls have shown that a small majority of Newfoundlanders favour it - even as the same polls show three-quarters know nothing about it. In other words, despite our history of political corruption and incompetence (arguably only Quebec has a worse record in Canada), Newfoundlanders are quite willing to place their blind trust in the current secretive, manipulative, corporate driven crop of politicians when it comes to the largest pubic project ever undertaken in this province. Remarkable when you come to think about it....and depressing.

    • a business man
      December 13, 2012 - 12:09

      Maggy - I am a taxpayer and citizen of NL. I know nothing about he details or potential problems of MF. I, as a voter, choose to place my blind trust in our politicians for one reason and one reason only.....because I personally stand to indirectly benefit from the creation of MF. I may be uninformed, but I have a right to support MF without being uninformed. I accept that energy prices will increase, and I am okay with that. I understand that I have no idea how high energy prices will go, but I am okay with that. Again, only because I have my interests in mind. You say the MF situation is depressing, but I say it is exciting.

    • coco
      December 14, 2012 - 05:16

      Hey Business Man - in the game of playing along without conscience thinking you’ll both benefit, watch your back. Much trust is gained before one of you eventually ruins the other.

  • Eli
    December 12, 2012 - 15:54

    A big problem is every mayor wants to outdo the other in terms of size. "We're the biggest at...", we're the largest community in.,..". There's no end to it. What's wanted is some badly overdue INDEPENDENT audits to bring some of 'em back to reality.

    • Jay
      December 13, 2012 - 09:59

      The mayor gushes about growth and prosperity, but all it means to the ordinary taxpayer is increased taxes and reduced basic services. Yes, Mr. Mayor, our basic services with respect to garbage collection and snow clearing have actually declined. Our taxes have increased and charges for services have expanded. You can't even visit a friend who lives downtown on a Sunday anymore because you'll get ticketed without a permit. But the bureacracy has expanded and the little empires are expanding, and the pet projects are getting done, all at the ordinary citizen's expense. It's time to get rid of the existing council and get back to the basics.

  • Honest Accountants and Auditors are needed to run our affairs, not Politicians.
    December 12, 2012 - 15:33

    Newfoundland and Labrador, one of the finest pieces of real estate to be found in the Western Hemisphere loaded with natural resources and a prime strategic geographic location, to boot and yet all the politicians we have elected over the past 63 years have not done anything economically for the electorate of Newfoundland and Labrador, but some of them have made themselves enormously rich from the people' natural resources. It is strange how some say we are too remote (that is the biggest lie ever perpetrated on Newfoundlanders and Labradorians and Canadians, in general) but we weren``t too remote to allow foreign countries to come to our shores from many thousand of miles away to catch our fish and take it back home in the raw state, neither were we too remote to have our Minerals,Oil, and Hydroelectricity developed and shipped out in the raw stat. As I said some politicians from Canada got ultra rich from our natural resource base and great location,while the ordinary Newfoundlander and Labradorian remained poor with very little economy or infrastructure created within their midst.

  • Robb
    December 12, 2012 - 11:30

    Hey Fedup Taxpayer, the answer is simple.....ALL elected officials, no matter what level of government should only be allowed to serve 2 terms, and certainly no pension should be attached to it....serving as an elected official is a privledge, not a right, and it certainly should not impose a life sentence of a fully paid pension on the taxpayers...change it up, new blood........even the president of the United States does this, and there is certainly enough talented people able to do these jobs, so the elected officials there now don't need to act like they invented everything, others can do just as well or better, and this rotation of duties would keep everyone on their feet, reduce the chances of wrongdoings, and spread the wealth around. Just plain internal control concepts of accounting.

    • Basha
      December 12, 2012 - 13:36

      Amen to that. Too many councillors and MHA's are professional politicians; the biggest salary they will earn in their lives is in public office. Term limits is the answer. Limit the amount of time the politicians can lie to us and draw their salaries and top up their pensions.

  • fedup taxpayer
    December 12, 2012 - 11:02

    what a difference a decade makes for who? certainly not for taxpayers. the politicains will still be useless, overpayed, they will still travel the world, free expence claims, wine/dine on our dime, make stupid dumb decisions like they did with the abitibi-bowater mess, sit on their butts and collect that fat wage, and how can i end my comment by not mentioning that big fat pension they will collect for little or no work to those they are suppose to represent. ABSOLUTELY DISGUSTING !

  • Fire Protection In Goulds
    December 12, 2012 - 08:12

    The fact the nearest fire hydrants were 1 kilometer away from the fires at the 2 barns in the Goulds can't be part of the Mayor's definition of "First Class Services". Cranes dotting the DOWNTOWN horizon spells it all. Listen people, for a provincial capital city not to have the sidewalks cleared and garbage collection on a rotating schedule should tell you this city is not run properly.

  • Tunnel Vision Town
    December 12, 2012 - 07:28

    Our taxes are going up to pay for things like that rechid fence on our water front and team gushue highway.

    • RJ
      December 18, 2012 - 00:35

      St.John's....just another drug infested low life place...why do they need bars and locks and fences? A small city with a crime rate that most cities of a million can't compete with...congrats on the last decade...Put that in the next "nfld tourism ad"!!