[quote=“DWhite”]I was reading in the Vancouver Sun about the Canadian Federation of Independent Business criticizing municipalities for their overspending.
I looked up their site and found these reports.
cfib-fcei.ca/cfib-documents/rr3241.pdf This one is the most recent including 2009 but I could not find Rupert anywhere in the report.
cfib-fcei.ca/cfib-documents/rr3222.pdf This one is from last year and includes data from 2000 - 2008. There is information on page 11 that includes communities of 10-25000 and Prince Rupert and Terrace seem to come across as NOT the worst when it comes to municipal spending.
[/quote]
Yes, but how are they measuring performance and is that only or best way of comparing Rupert with other municipalities? The reports look at spending growth relative to population growth and the inflation rate. In many municipalities spending has been growing faster than population and inflation. There is a “Fiscal Sustainability Gap” (FSG).The CFIB is saying that’s a problem.
Rupert has not followed that trend. Does that mean that all is well here? No it doesn’t.
Rupert is anomolous in that it has lost population. Spending has gone down because the city lost a major part of its tax base when the mill and other industries closed. With lower tax revenues, spending had to be cut. There was no choice in the matter. Municipalities are not allowed to run operating deficits.
The 2010 report acknowledges on page 7 that under these circumstances a Fiscal Sustainability Gap “could not be properly defined” for Rupert; hence it is listed as ND in the table. The authors are essentially giving a nil report for Rupert. That is not a favourable comparison with other municipalities.
Because Rupert has lost so much of its industrial tax base it has ended up with relatively high residential taxes. However, the tax shift has not been enough to offset the decline in industrial tax revenue. Spending is still below former levels.
A consequence is that Rupert has ended up with a large infrastructure deficit. Huge investments are needed in roads, water, septic, and facilities like the police station and fire hall.
So unlike other places that, according to the CFIB, should reduce spending to be in line with population growth and inflation, Rupert really needs to increase spending. The problem is that it lacks the industrial tax base to pay for it, and residential taxpayers already pay relatively high taxes. The last council failed to come to terms with that dilemma. They really didn’t discuss the problem (in public at least) until their last few weeks in office.