I wanted to compliment you for your Dec. 12 editorial on the challenges of growth faced by the City of St. John’s. I wanted to, right up until the last sentence: “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.” That’s where you lost me.
Municipal politicians don’t dream of constant revenue growth, they dream of being able to provide the services residents deserve.
Municipal leaders are keenly aware of the tax burden on residents. We hear about it more directly than any other order of government. In fact, municipal governments get only eight per cent of what you and I pay in taxes each year. The federal and provincial governments share the other 92 per cent. And because the law forbids us to carry a deficit, we have to manage that money well.
For that eight per cent, municipalities rely almost entirely on an antiquated, clumsy tax. Property tax is widely accepted to be among the most regressive forms of taxation — it does not reflect residents’ ability to pay nor does it adequately track the economy. It doesn’t work, not for local governments and not for taxpayers.
Provincial legislation dictates how municipalities raise revenue and the provincial government has agreed to work with us on a new approach. One that is fair to taxpayers, to municipalities and to the provincial government. One that broadens the scope of revenue sources so we are not dependent on three-year cycles of assessments. We will get to work in early 2013.
The challenge of growth is about more than how much it costs, it’s also about how we pay for that growth. With a tax used by William the Conqueror in 1066, or something we design for today?
Municipalities Newfoundland and Labrador