Engage taxpayers but reduce spending to help them most
This column was published in the New Brunswick Telegraph-Journal on July 25, 2019.
It’s always good when our politicians want to put their ears to the ground and hear what taxpayers really think. But they need to be honest about the seriousness of the situation and present all the options to turn things around.
The City of Saint John recently launched an online budget simulator, urging residents to go online and make decisions about what they would fund or not fund, and whether they would raise taxes and by how much.
Good on council members for engaging taxpayers in the budgetary process. But let’s remember we cannot sugar coat the problem or leave out the tough choices.
We pay our elected representatives to demonstrate leadership by tackling challenging issues. Their job is to balance budgets.
In Saint John, some progress has been made. For instance, the city’s long-term debt has declined by 4.3 per cent since 2017, according to the province’s Sustaining Saint John plan.
Yet the city still faces a structural deficit that’s due to reach $12 million by 2021 and uncertainty about its fiscal future.
Children could not reasonably take part in a budget simulator, but they will be the ones saddled with the consequences if Saint John council doesn’t get the city’s budget under control.
The same can be said for much of the province. New Brunswick’s auditor general Kim MacPherson – no relation to this writer – recently raised the red flag about the nearly $1 billion collectively owed by New Brunswick’s municipalities. Of the eight cities, Saint John’s share is the largest.
The Port City already received a controversial bailout from the previous Liberal government, which MacPherson said carried “excessive risk” for taxpayers and created an “inappropriate incentive” for Saint John to continue running deficits.
Council knows it needs to get the structural deficit under control, but its recent budget simulator didn’t give taxpayers all the options. For example, they couldn’t choose to reduce councillor pay, which should have been available as on option.
Under the present municipal governance structure, there are limits on what can be done on the revenue side of the ledger. Logically, it follows that council will have to look at the spending side to bring expenditures in line with available resources.
A major drain on every municipal budget across Canada is the cost of paying public sector wages. Saint John is on the right track by also supporting the Cities of New Brunswick Association in calling for Ability to Pay legislation. This reform would ensure arbitrators take economic realities – such as taxpayers’ ability to pay for union wage hikes – into consideration when contracts with unions go to binding arbitration.
City councillors right across the province have tough decisions to make. Listening to taxpayers is always a good thing, but real leadership means presenting the whole story and realistic options to deal with the situation.
Taxpayers don’t have bottomless bank accounts to pay for hikes. We need to work together to live within our means and make sure we’re not leaving a huge debt for future generations.
Paige MacPherson is Atlantic Director of the Canadian Taxpayers Federation.