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.
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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 (greentechmedia.com). 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.