Stop the Spending

Happy New Year to everyone.

I realize it has been quite a while since my last post.  It’s not for lack of interest, just a lack of time to research/write about a topic that matters a great deal to many, yet one that may not be getting all of the attention it deserves – TAXES.

While it is obvious to most Londoners that their property taxes have increased substantially over the past five years, what may be less well known is the cumulative quantitative impact of those increases and the projected impact of future increases should the tax rates proposed in the City’s next multi-year budget go unchecked or unchallenged.

To help illustrate the impact of a decade of past and projected tax increases, the attached table calculates the total annual and cumulative property tax Londoner’s are now paying, and will pay per $100,000 of assessed value over the term of this Council and the last.

Total Additional Tax per $100,000 of Assessed Value 2015-2023

2015 2016 2017 2018 2019 2020* 2021* 2022* 2023*
Previous Year

29.44 59.30 94.14 129.75 164.08 234.20 294.78 341.66
Add: New 29.44 29.86 34.84 35.61 34.33 70.12 60.58 46.88 46.05
Total 29.44 59.30 94.14 129.75 164.08 234.20 294.78 341.66 387.71

* Projected Scenario

Put another way, if left unchanged, a homeowner living in a single-family residence assessed at a value of $300,000 will be paying whopping $1,163 per year (3 x $387.71) more in property taxes at the end of this budget cycle than they were just five years ago. Similarly, if the home is assessed at $700,000, the annual amount owing will have increased by $2,714 (7 x $387.71) over that same period.

And these amounts do not include any increases in the tax payable for schools and water.

What’s more concerning is that Londoners’ take home pay has not increased anywhere near this rate. According to last census, over a 10-year period between 2005-2015, median incomes in London actually decreased 3.6%.

Mayors past and present have routinely campaigned on a promise to hold taxes at or below inflation.  Former Mayor Matt Brown did it in the run up to the 2014 election, and our current Mayor made a similar commitment in 2018.

While I believe that no one running for office should make such a representation without some sort of plan to back it up, I also suspect Londoners are smart enough to know that such promises made in the heat of campaign are difficult to swallow, simply because the growing demands on our city make them difficult to implement.

Nevertheless, when it comes to matching inflation, this four-year budget, much like the last one approved by the previous Council, is not even close.

So what can be done?

There were several steps that Council members could and should have taken months ago, if they truly wanted to manage this rapid growth in tax rates.

First, Council should have taken greater advantage of a parting gift from City Manager Martin Hayward entitled: Review of City Services For Potential Reduction and Eliminations. His full report can be found here: https://pub-london.escribemeetings.com/filestream.ashx?DocumentId=65965.

This impressive report, which was tabled in July of 2019, provided Council with a detailed insight into the inner workings of City Hall, inviting members to review and reconsider the way our city delivers service.

For example, is there a way for the City to better utilize the 29 full-time employee equivalents (FTEs) and $15 million annual budget on traffic control and street lighting?  Does the City of London need 25 FTEs managing our forests? Does the City need the additional event management staff planned for Dundas Place over and above the 4.5 FTEs dedicated to event management through our Parks?  Our city is also spending upwards of $20 million annually on non-frontline purchased services without a clear link to the actual service provided.

Yet, with the exception of some sound savings suggestions from Councillors Morgan (reduced reserve allocation) and Turner (reduced development charge rebates in the downtown core), Council has offered little more than passing consideration to this report or its intent at a time in the calendar year when City staff had the time to search for further operating savings.

Btw, I am not making a judgement about any of the above programs. Of course I support proper traffic control, forest management, and event management; just as I support investments in affordable housing, transportation and improved infrastructure. I am just suggesting (as did Martin Hayward) that before we commit to spending new money on new services in these areas, we should seriously re-examine what we are already doing and decide whether such spending is still necessary or can be spent more efficiently.

Second, Council could have also better served its citizens by working with the Province rather than vilifying it.  Whether you are a supporter of the Premier’s approach or not, the total impact to the City’s budget of the changes in provincial funding is less than 1%.  This amount, while material, is by no means insurmountable, and the Province is offering help – so take it.

Finally, and I know it sounds cliché, but Council could have broken itself into teams/committees and conducted a line-by-line review of the budget and business cases, not as presented, but as formulated.  For example, I cannot seem to find where the 11 full-time employee equivalents currently assigned to the Bus Rapid Transit project as the only operating expense currently tied to BRT amounts to only $80k per year.  And while I agree with such net levy reduction business cases as the one proposing a shift in the conservation authority support cost to wastewater user fees, it hardly qualifies as an impactful tax savings.  The opportunities for offsets are there, but it needs a sincere commitment from Council to find them.

What can we do?

Fortunately, Council still has time to materially refine this year’s budget, and more importantly, each of the next three. However, they need the impetus to do it and that is where you come in.

London taxpayers need to speak up. We need to strongly convey through email, voice mail, direct mail, direct messaging, text messaging, radio call-in, letters to the editor, and in-person that perpetual tax increases in excess of inflation are not sustainable, affordable or acceptable.

If your time is of concern, simply send the Mayor, Budget Chair and/or your ward Council member an email or direct message with nothing more than the tagline “Stop The Spending”, “Slow The Spending” or “Find The Funds Elsewhere” (see example below).  And feel free to copy me at ppaolatto@gmail.com. You need not add anything more. They’ll know what it means.

Council has asked for feedback on this budget.  A failure by Londoners to respond will signal that the rate impacts outlined above are acceptable.  The choice is yours, the action required to change this trajectory now rests with you and the clock is ticking.

_________________________________________________________

Date: Today

To: jmorgan@london.ca

From: ppaolatto@gmail.com

RE: “Stop The Spending”

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…. Now that wasn’t so hard.