Elections and Taxes and Salaries – Correction?

So, enjoying the election so far?

It has become slightly less comfortable for me since writing this post last week. I am fairly non-partisan, in that I vote for candidates, not parties. No sooner do you post a blog looking deeper at the facts being provided by some candidates, and the suggestion of bias comes out.

As an aside, this blog has a market saturation of about 0.01% of eligible voters in New West (my Mom lives in the Kootenays, otherwise it might be 0.011%), so I can’t imagine my criticism is something a candidate should be all that worried about. Secondly, I call myself non-partisan, I never said I wasn’t biased. I work for a city, when someone drags out the “Lazy Muni Employee” trope, I respond. I even declared my bias at the beginning of that post. Notably, I have provided financial and/or logistical help to three council candidates and one mayoral candidate so far this election, and as things stand, it looks like I will vote for about half of those 4. I even have biases within my own biases! Democracy is great.

Back to the topic in question: both of the Candidates I mentioned have taken me to task for the article I linked to above, as I took them to task for (to Quote Mr. Crosty’s campaign literature):

“…over 78% of out taxes are used to pay wages, benefits, and consulting fees”

(and, by implication, our City Staff is lazy, overpaid, and bankrupting the taxpayers of the City).

Demonstrating that, as I previously claimed, I am not a genius at financial statements, one of the Candidates provided me a link to this report prepared by the City which provides the info much more clearly (and, I assume, more accurately,) than my post on the subject. It was pointed out to me that I should look at I should look at Page 8 of the report, where one can find the line:

”…the City’s major cost is salaries and benefits, representing approximately 78% of the total general operating budget.”

I have to admit, this number is way better than the numbers I tried to parse out of the Annual Financial Statements, and it is stated so eloquently, so I guess I owe the Candidates an apology.

Sort of.

Problem is, 78% of the General Operating Budget is not the same thing as 78% of Taxes. Not even close.

The 78% for 2010 number comes from $60M in salaries paid out of the General Operating Fund of $77M. But the General Operating Fund is the money used for day-to-day operations of the City (See Appendix 1 of the Report). The fund from which they pay for office supplies, insurance, incidentals, and yes, salaries. It is not the fund used for Capital Works for the City (like building the Pier Park, or replacing a boiler or City Hall, or sidewalk repairs). Nor does it include any of the Utility operations or capital: the water pipes, sewers, and trash collection that is so much of what the City does.

Things also not included in the General Operating Fund budget: buying and maintaining the vehicle fleet, painting yellow lines on roads, Fire and Police equipment, the Master Transportation Plan, Christmas Lighting, Rail Crossing upgrades, paving projects, the Mercer Stadium Track replacement, street light or street sign upgrades, and the list goes on…

The budget for all of these “Capital costs” was about $65 Million in 2010. And much of that is paid with your taxes.

Then there are utility operations: Electrical, Sewer, Water, and Solid Waste. These are operated on a strict fee-for-service basis: so those who get the service are those who pay for it, and all the money paid for them goes right back into operating the utility. If memory serves me right, this is a strict requirement in the Local Government Act. Utilities cannot be used as cash cows to fund other programs. The only relationship this has to your taxes is that some money is transferred from the Utilities to the General Operating Fund in order to pay the salaries of the people who operate and maintain those utilities but are otherwise paid out of the General Operating Fund.

Interesting to consider that if we reduced salaries, we would need to reduce the General Operation Fund by the same amount of money. If we reduced salaries from $60M to $45M (a 25% cut, sure to cause chaos in any organization), then we would have to also reduce the General Operating Fund by $15M, so the statistic provided by the Candidates would then say “72% goes to taxes!”: not much of an improvement for decimating your City services.

Sorry guys, I stand by my original post as being a much more accurate picture of the relationship of taxes and salaries than “78% of our taxes go to salaries”.

2 comments on “Elections and Taxes and Salaries – Correction?

  1. Why do we always see a debate over how much we pay in taxes and not over what we get for the taxes we pay?

    I don’t have a problem with the taxes I pay (sure it would be nice to pay less, but you get what you pay for and nothing comes for free…) However when I get City employees putting no parking signs in the middle of sidewalks where people are supposed to walk or bike route directional signs pointing in the wrong direction I do start to get disgruntled with the quality of the work I’m getting for my taxes.

    Which candidate is going to stand up for the quality of services we get from our City instead of just trying to nickle and dime the employees??

  2. Actually, at the Queens Park Meeting, the Mayor sadi something of that sort: cutting taxes is easy, but you tell us what amenities you want to cut!

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