Moncton's budget has grown to $113M from $71M in past 7 years

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BY ALAN COCHRANE
TIMES & TRANSCRIPT STAFF

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As the City of Moncton prepares to go through the annual process of budget deliberation, homeowners again face the prospect of having their property tax rate raised at a time when the taxman already takes about 45 per cent of their earnings in one form or another, and they are trying to keep up with the rising cost of living.

The City of Moncton's budget has grown by $42 million over the last seven years, from $71 million in 2002 to over $113 million in 2009. The tax rate has gone from $1.58 (per $100 of assessed property value) in 2002 to $1.65 in 2009. According to figures from released by the New Brunswick Real Estate Board this week, the average price of a house in Moncton has risen to $146,822. At the current tax rate, that would mean a property tax bill of $2,426. That's approximately $202 a month.

The tax rate is among the last items set in the municipal budget process, after the city figures out how much revenue it will get and how much everything will cost. During the budget process, each city department has to list where it will spend its money and councillors decide which items can be cut to bring those costs down. If they get to the end of the cutting process and still need more money to balance the budget, they can raise the tax rate -- essentially reaching into the pocket of the taxpayer -- to get the extra they need.

Last year the City of Moncton and other communities managed to push through their budgets without raising the tax rates, but property owners still paid more because the assessed value of their properties went up. As budget time rolls around again, municipalities are making no promises that they will be able to do it again, so homeowners will have to wait to the end to see how they will be affected.

As the budget has grown by $40 million, the spending has grown along with it.

But with a budget that has grown so much over the last few years, couldn't the city find ways to cut expenses enough to give taxpayers some relief?

For example, the City of Moncton has about 590 full-time employees, 150 casual employees and always hires summer students. Wages and benefits account for $40 million out of the total budget of $113 million. That's twice as much as the Town of Riverview's entire budget of $20 million. The city is also spending $16 million on debt charges.

The Canadian Federation of Taxpayers and the head of the city's committee on taxation review say it's time for municipal politicians to learn to say "NO" and get their spending habits under control because the current rate of spending can't sustain itself.

Kevin Gaudet, federal director of the Canadian Taxpayers Federation, says Moncton is certainly not alone in field of rising property assessments and tax rates. He says municipalities are just as bad as provincial and federal governments.

"Politicians need to get their spending under control. Politicians need to learn to say no," says Gaudet, a native of Halifax who works out of the taxpayers federation office in Toronto. He says municipalities are getting involved in projects that are beyond them, when they should be focusing on the basics like police and fire protection, garbage collection and maintaining infrastructure like roads and water systems. He suggests Canada's towns and cities should look at outsourcing contracts and getting involved in more public/private partnerships on capital projects. Another problem is that taxpayers are footing the bill for a growing roster of municipal employees who are paid about 25 per cent more than their counterparts in the private sector.

"Canadian taxpayers need to have a conversation with their local governments on what they want their money spent on."

Gaudet says Canadians are already burdened by taxes. The federation says about 45 per cent of our income goes to taxes, including the deductions from our pay stub and then all the extra taxes and fees on just about everything else, from a case of beer to a pair of pants, gas for our cars or furniture for our homes.

Clare Archibald, the executive-director of Moncton Headstart who chaired Moncton's Committee on Taxation Review, agrees with Gaudet that politicians need to learn how to say no and get their spending priorities under control.

"Sometimes the city needs to see itself as a parent and be able to say no," says Archibald, whose committee submitted a report to Moncton City Council. The report contained 25 recommendations that essentially say the city needs to control its spending and find ways to generate more revenue.

Archibald said some spending trends that jumped out at the committee were the cost of overtime and sick time, and departments that go over budget and the cost of public works projects.

The committee's report said the city should not only look carefully at spending but also seek out new sources of revenue to help balance the bottom line.

For example, the city has invested a lot of money into the Magnetic Hill Concert Site, which drew thousands of people into Metro Moncton for the outdoor shows by Bon Jovi and AC/DC this year.

While the committee agrees the concerts benefit many businesses, the report suggests that an extra $1 on the cost of a ticket would help generate thousands of dollars of extra income that could be put toward putting on the shows, so the money is actually generated by people going to the shows. Also the committee suggests a hotel levy on the cost of a hotel room which would go toward promoting tourism. Other cities like Halifax do this.

But Archibald says the committee found that for the most part taxpayers in Moncton get a good return on their investment and enjoy good service for their money. The city provides a lot of services that we don't see or realize. However, we can't sustain the increases that we have seen over the last five years.

When it comes to the tax bill, Archibald says the average homeowner doesn't really consider whether it is their assessment or tax rate that goes up, they are mainly concerned that they are being told they need to pay more.

John Martin, the city's director of finance, says the $40 million growth in the budget directly corresponds with the actual growth of Moncton. He says the city has more roads to plow and maintain, more facilities to look after, more garbage to pick up and more people to keep safe.

More jobs and an economic boom in Moncton have resulted in more people moving into the city, which means more activity in just about every sector.

The city announced this week that building permits reached a record high of $198 million so far this year.

To keep up with the growth in recent years, the city has also invested heavily in new departments at city hall and hired people for economic development, building inspection, communications and other services.

Paul Thomson, the city's director of communications, says the city has continued to add more services that add value to the community with the intention of keeping people here and encouraging new residents to live here.

In an interview yesterday, Martin and Thomson said the city wants taxpayers to understand exactly what they get for their money, which in the case of property owners is about $200 a month.

"For every dollar in taxes, 49 cents goes to the federal government, 43 cents goes to the provincial government and eight cents goes to the municipal government," Martin said. "We provide a lot of services with that meagre eight cents."

The municipal government provides police and fire departments, street maintenance, snow removal, parks and trails, garbage collection, bus service, recreational facilities and programs, economic development and sewer and water service.

"When you go to your tap and get a glass of water for yourself, people don't think that there are 100 people doing their job to make that happen. People take our services for granted."

Thomson says a recent publicity campaign to show taxpayers where their money goes is working and surveys indicate that people feel they are getting a good deal for their money.

"We've told people about the services they provide and then asked them to tell us what they would like to see cut and the answer was 'I don't know.'"

Martin says the people at city hall are well aware that people are heavily burdened by tax and want to make sure that money is spent wisely.

To that end, the city has commissioned studies on tax review, the Codiac Transit bus service and policing. The next study will look at services provided by the city and how important they are to local residents.

"We're constantly turning stones over. Every department is looking at their budgets and trying to find ways to do it better. Council and staff are very engaged to find cost-effective and efficient services that people are willing to pay for."

Thomson said council is always struggling -- especially at budget time -- to balance the demands of the people versus the amount of money available.

"But it all comes back to how it affects me, the taxpayer," Martin said.

John Martin will deliver the City of Moncton's 2010 budget presentation at a regular public session of council on Monday, December 7 at 5 p.m. His presentation will be webcast on www.moncton.ca. Residents will be able to visit the city's website to view the budget presentation at their convenience.

Budget debates are scheduled for Friday, Dec. 11 and Wednesday, Dec. 16 at meetings in the city council chambers.