Posted December 21,2014
You don’t have to look much further than the recent spate of comments by those Farbridge supporters both elected or not, seeing the battle lines forming as the new council gets ready to meet its first test, passing the 2015 city budget.
Scott Tracey, former Mercury reporter covering city hall and recently defeated candidate for council, addressed the issue of Mayor Cam Guthrie’s notice of motion to change the method of the staff determining the annual property tax rate.
In a recent guest column, Tracey remind readers that it is wrong to compare the annual cost of living index known as the Consumer Price Index (CPI) with the one used by some municipalities known as the Municipal Price Index, (MPI).
Based on a continuous stream of data, the CPI is generated by StatsCan officials to determine the annual cost of living increases of goods and services to Canadians. Part of those costs to Canadians includes the cost of operating a residence or business. Part of that includes the increases in property taxes.
The increase on property taxes in Guelph over the eight years of the Farbridge administration grew exponentially by 38 per cent.
The MPI is an index determined by whom? Tracey does not tell us the origins of this index, how it is calculated or the sources of input. There are 443 municipalities in Ontario, each with differing costs, culture, liabilities and revenues.
Here is the nub of the argument. Canadians are concerned about rising costs. When the annual CPI increases in individual costs in most of the Farbridge years was 1.7 per cent, why were the average annual tax compounded increases in Guelph more than 4 per cent?
The point is that unlike the average Guelph ratepayer who has little control of costs operating a household, the city has a responsibility to control its costs to ensure that the annual increases in taxes and user fees are affordable.
Since its election in 2006, the Farbridge administration failed to consider the ability of many residents to pay their taxes and user fees, particulary those with lower incomes, those on fixed incomes and the unemployed.
This is one of the reasons that the people rejected the Farbridge administration. The lady went to the well once too often.
Guthrie is right to review to methodology of calculating the annual property taxes.
It was not too long ago that Chief Administrative Officer, Ann Pappert on behalf of the staff, sent an 8.5 per cent property tax increase to council. When it was rejected she referred to council’s failing to pass the staff’s proposed increase as being “regressive.”
Then along comes newly elected Ward four Coun. Mike Salisbury who mumbled incoherently: “I’ve never been a fan of the idea of tying the tax rate to inflation. Inflation is a metric and a tool of macro economics that’s tied to the price of gold and oil. It has nothing to do with Guelph.”
That sounds like something lifted from the Communist manifesto.
By that reasoning the recent plunge in the price of oil and gold should result in a lower tax rate for city ratepayers. Right Mike? City operations will be affected in 2015 by the drop in oil prices in a big way. Gasoline now under $1 a litre represents a 30 per cent drop in just three months. Even borrowing costs may be lower due to gold price drop.
Well, he was on council in 2008 when the world financial base crumbled and Canada went into a deep recession. Now that was a case of macro economics!
But it didn’t stop council from once again increasing the property taxes regardless of the recession causing the collapse of businesses in Guelph and layoffs of residents. Nor did it stop the administration from kicking the general contractor, Urbacon Buildings Systems, off the new city hall construction site. Following extensive court testimony in which the city was found guilty of wrongful dismissal, the cost to citizens is an estimated $21 million.
You will recall the settlement costs of the case, according to the then mayor and CAO Pappert, would not cause an increase in property taxes.
The 2008 global financial collapse took several years to recover. Regardless, the administration kept increasing tax and user fee costs to Guelph taxpayers. Now, despite an overwhelming rejection of the Farbridge doctrine, citizens are now in danger of having those same policies perpetuated by a new council dominated by her supporters.
We’ll know better in the next few weeks if their game plan is obstruction or collegial, collaborative accomplishment of needed fiscal reforms that benefit all citizens.
What is really needed is an independent financial review of the city’s books to form a basis for making sound decisions for the next four years.