Zero Tax Pledges: Irresponsible Populism

Did someone say increased property taxes?

On EDGE | Political Opinion

Last December, I sat through night after night of achingly dull City Hall budget debates. As I struggled to keep my eyes open, council went line by line through dozens of densely annotated pages, discussing the merits of this or that expenditure and the effects of cutting certain programs or capital expenses. By the end of the week, they’d sheared $2.1 million from the proposed $71.6 million budget and flatlined the proposed 2.8 percent property tax increase.

It was exhausting but necessary work. The choices that council made – to drastically reduce streetscaping budgets, to nix a new tourism marketing position and branding strategy, to forgo a weigh-scale at the dump, to cut funding to a number of parks around town, and so on – were by no means foregone conclusions. Many of the decisions followed heated debates, and several choices split council down the middle. They did eventually arrive at the coveted zero percent tax increase, but only after making some very hard choices.

Fast-forward to last Friday’s municipal all-candidates forum, hosted by the Chamber of Commerce. As a whole, this municipal election season has seen a strain of low-tax mania amongst would-be councillors. That’s nothing new in municipal elections from here to Timbuktu. But I was struck in particular by five council candidates (none of them incumbents) who, responding to a question about tax increases, promised to advocate for a zero-percent tax increase.

‘Are you serious?’ was the thought that came immediately to mind. ‘You haven’t seen the budget, did not attend last year’s budget deliberations, haven’t yet engaged in the push and pull that characterizes budget debates, so how can you advocate, with a straight face, for no tax increases?’ There’s nothing wrong with pushing a fiscally conservative approach to budgeting, but to agree to no tax increases in front of a room full of business people salivating at the thought seems like the worst kind of populism.

Even fiscal hawk Niels Konge was measured in his comments: “I won’t sit here tonight and promise zero percent because we haven’t seen the budget. What I will sit here and promise is I’ll go line by line through that budget and cut whatever fat I think we don’t need at this time.”

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IserveU’s mixed messages

One of the striking things about the group of zero-percenters was that they included (along with Thom Jarvis and Mark Bogan) all three IserveU candidates: Dane Mason, Marie-Soleil Lacoursiere and Rommel Silverio.

To promise a zero percent tax increase while also promising to listen to the will of the people through IserveU? Sounds like a mighty fine tightrope to be walking.

This tension was revealed when Silverio, who advocated for a tax freeze, went on to say: “I would like to listen to you, what you want me to do in the council… When they say they want a library, you give the library, because that’s what they want.”

After the forum, I asked Mason and Silverio if it was disingenuous to promise no tax increases while also promising to vote for whatever the majority of people who engage in IserveU want.

For most issues, they responded, the threshold of online engagement needed to control an IserveU councillor’s vote (50 percent) won’t be reached. This means, they argued, IserveU candidates will be voting their conscience most of the time, so voters deserve to know where they stand (i.e. against tax increases).

It’s a good response, and it’s a smart move to distance themselves from allegations that they’re just robot-candidates. But when combined with campaign promises of no tax increases, their logic seems flawed.

Any issue significant enough to engage a majority of people in IserveU’s voting process would almost inevitably be large enough to affect the City’s budget, and thus property taxes: hosting the Canada Winter Games, building a library (Silverio’s example), maintaining the Robertson Headframe (the example given in IserveU advertising), etc. For an IserveU candidate to promise a zero percent tax increase is not only an example of unfortunate populism shared with Jarvis and Bogan, it also suggests the candidates haven’t fully considered the implications of the kind of direct democracy they’re advocating.

Put another way: if the IserveU system works and people vote for something like a library, then current promises of no tax increases by their candidates will have been empty ones.

Taxes, taxes, taxes

While it seems important to highlight the specific populism of the zero-percenters, it has to be said that they’re only part of a bigger and more worrisome ‘cut taxes and cut spending’ trend amongst many of the candidates.

There’s no doubt Yellowknifers pay high property taxes, and councillors play an important part in keeping City Hall spending in check. But the obsessive focus on cutting property taxes or limiting their growth gives outsized importance to the amount slight tax increases actually affect individuals.

Cue the screams of thousands of decent, hard-working, slammed-by-the-cost-of-living YK property owners and the assemblage of torches and pitchforks by outraged chambers of commerce, but let’s just take a quick breath. Had council not cut last year’s budget to prevent property taxes from increasing by 2.98 percent, a Yellowknifer owning a $300,000 single-family home would have seen their taxes go up by approximately $58. Add roughly $18 per annum to that for each additional $100,000 in value.

Sure, you don’t want to see your property taxes increase by $58 every year, but let’s not make a bogeyman of taxes and pretend City Hall spending is out of control. Yes, the last council made some questionable spending decisions – bike lanes being the stand-out. But over three years, YK property taxes increased by an average of one percent a year, well below the rate of inflation, especially in the North.

It’s a good thing we have councillors ready with their budget-cutting shears and willing to question the fairness of the tax system (Have we achieved the right balance between commercial and residential rates? Are property assessments based on depreciated replacement cost rather than market value the way to go?) But it helps no one to be dogmatic about no taxes. Inflation and the lifecycle of infrastructure means tax increases will happen eventually if we want to keep similar levels of services as we have now. And refusing to incrementally raise taxes means we’re looking at a much bigger shock when they do jump to catch up with inflation. Furthermore, councillors sometimes have to make commitments that are expensive in the short term, but will pay off in the long run, as with major energy retrofits.  

There are a number of big-ticket items the next council is going to have to deal with: the submarine pipeline, the pool replacement, what to do about the 50/50 lot, major energy retrofits for City facilities. To successfully budget for these things the councillors we elect on Oct. 19 will need to be extra-diligent during the long and boring budget debates. But they can’t come in from a place of no-tax zealotry.

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