Now I may be biased, seeing as how I work for a City, but I don’t work for New Westminster, so I am going to barge ahead with that potential bias exposed (sound like a declared conflict-of-interest?). There are currently at least two candidates in New Westminster who are talking taxes in a big way, and it seems they both think that City Workers get paid too much. Fair opinion, but are they arguing facts?
John Ashdown, sometimes referred to as the “Mayor of 12th Street”, is well known as both a community-builder and a fiscal conservative. His website includes the following quote:
”Do you know that 78% of your tax dollar ends up in to City Wages and Salaries?
Mayoral Candidate James Crosty was recently quoted by the Douglas College student paper making a very similar statement:
“80 per cent of every tax dollar that’s generated goes towards paying salaries in the city.”
His promotional newspaper is a little more conservative, downgrading that number to 78.08%. But the message is clear: the City pays so much of your taxes to the wages of City workers that they can hardly afford anything else form the 20% of the money that is left!
This first raised the question to me: is that high? I mean it sounds high, but I wonder if it really is compared to other cities, like Richmond, where I work. I asked these questions to Mr. Crosty at last night’s all-candidates mixer, and he suggested I make the comparison between New West and Richmond (presumably, a better-managed City in his opinion). However, before we compare the facts, let’s find out of they are facts.
Luckily, the City’s 2010 budget is available on-line for anyone to read. Now, I’m no financial expert. Tables of geochemical data generally make much more sense to me that tables with dollar signs on them, but we should be able to parse out the info here without too much trouble.
If we look at the amount of tax revenue generated in 2010, we get the nice, round number of $54,569,975 (page 10 of the .pdf, which is page 2 of the financial statements, first number, second column). So 80% of that is $43,655,980.
Now, if you scroll way, down to page 41 of the .pdf, you get a list of all salaries paid in 2010, notably excluding police: $40,430,379. That is about 74%. Close enough for politics.
Hopefully looking at these same financial statements, you see all the problems with this rough estimate. The $54 Million number only represents about a third of City revenue. The City’s annual revenue is actually more than $165 Million, when you include transfers from other governments, utility charges, and other revenue sources. If you want to be simplistic and call all of these “taxes”, then the $40 Million salary figure above only represents 24% of the money the City takes in.
In fact, a better count for the wages paid out is available on page 27 of the .pdf: including Police services, the City paid $64,034,085 in wages and salaries, or 117% of the tax revenue they take in!
Another way to look at it is to flip to page 48 of the .pdf. At the end of a long list of all the businesses to whom the City paid money for goods or services in 2010 is a grand total of $102,540,586.
Perhaps one of the candidates making the statements above can explain to me how a City that is took in $165 Million in revenue can spend 62% of that revenue on payments to suppliers of goods and services, and still spend 80% on staff salaries? Because I’m clearly not a financial genius, and I may have a bias here.
Finally, let’s compare New Westminster with Richmond.
New West collected $54M in property taxes in 2010, which represents 32% of their $165M in revenues. They pay $64M wages (including cops), and another $7M in contracted services, for a total of $71M. That total represents 43% of their revenue. So 43 cents of every tax dollar goes to wages and consultant fees.
Compare this to Richmond’s annual financial report. Note that Richmond collected $156M in Property Taxes, which is 41% of their $379M in revenue. In the same year, they paid wages to $116M and $49M in contracted services for a total of $165M. That represents 43% of their total revenue. Exactly the same as New West.
Patrick, the numbers presented are distorted when including all sources of Revenue. We are speaking of City wages and taxes.
Richmond is a much larger community and flush with industry. Possibly if you use a Municipality/City with same components the results would differ. One point I noticed was your numbers regarding contracting out. Rich Tax 156M, NW $54M 3 times as much. 49 million contracting out in Richmond vs 7 million in New West 7 Times as much? Kind of says it all about Closed Shop and the real reason for Fair Living Wage policy and how New West fails in Fiscal Management in regard to labour. We have our labour dominated City Council to thank for that. That is the reason I beleive a better balance on City Coucil to represent labour, Business and the Taxpayer is a must.
Thanks for coming by and commenting, John.
I think “all sources of revenue” is the most important measure when comparing to the amount of wages we pay, because this includes the water and sewer utility payments (these utilities employ a lot of staff in the City), and fees for using the recreation centres (which pay a lot of staff), and transfers from higher governments, which help every City run their operation. It is not like the staff is paid out of taxes only. Less than half the money the City pays out goes to wages and Contractors
I am not arguing if the City pays too much or too little in wages; that is a political position some candidates have taken and that is something that is fair game for discussion in an election. My only point is to suggest that saying “78% of Taxes go to wages” is kind of disingenuous.
I picked Richmond at random, partially because I work there. It has about 3x the population of New West, and runs at about 3x the tax revenue. I think the contracting numbers are probably distorted because 2010 was the year of the Olympics, and Richmond spent a lot of money being a host City, much of that probably going to Contractors, so maybe the comparison is less that perfect.
I’m not sure how this relates to the Fair Living Wage policy, but would love to hear what the link is.