Sault Ste. Marie City Hall and the 4.6% Tax Increase: The Dumb Bunny Budget

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It’s been a while since City Hall announced a proposed 4.6% increase to property taxes in the upcoming budget. I was instantly angry upon seeing it; I just couldn’t believe it. I went scurrying for information, for verification that my hostility was justified, and I think I found it. What’s more, I think I came up with a way to balance the budget, while at the same time giving everyone who works for the City a modest raise!

Bold claims, I know. But if you come along on a little journey with me, and bear with me until the end, I will try to prove it to you. First off, a little story about rabbits…

A Cautionary Bunny Tale

When I was a kid, I had a Newfie Uncle. He was a wonderful man – kind, generous, and a voracious outdoorsman. He didn’t have any kids of his own, so one winter during our Christmas Vacation he offered to take me and my little brother out into the woods, to catch rabbits. Naturally, we jumped at the chance.

Early one morning, armed with only a spool of wire, a pair of pliers, and a pocket knife, my Uncle drove us out into the woods. We expected him to have a gun, but he explained that he didn’t need one. So, we crawled along dirt roads in his truck, while he hung out the window, searching for tracks. When he found some, he jumped out, fashioned a snare out of the wire, and tied it to a nearby branch. We repeated this process a couple of dozen times, and headed for home.

My brother and I were mystified. How was this going to catch rabbits? We asked my Uncle, and he explained that rabbits, once they pick a trail, always use the same one. In fact, rabbits will follow the trail of other rabbits. So, as soon as a rabbit came down the trail, and got himself caught in the snare, it would be time for rabbit stew!

The next afternoon, we went back out, to check the snares. I had some time to think about it, and comfort myself that this tactic couldn’t possibly work. I started imagining what we might find, hanging in that wire, and was anxiously hoping I was right.

The first few snares were empty, but then it happened – there was a rabbit, frozen solid, with his two back legs caught in the snare. I was a little fascinated, but mostly horrified. I felt bad for that rabbit. My Uncle unhooked the wire from the branch, bagged the bunny, and then started fashioning another snare. This is when my childhood mind became a tad unglued.

“What are you doing?” I asked, choking back what threatened to become an emotional meltdown.

“Setting another snare, bye!” My Uncle answered, with genuine pride.

“But why, we already caught him!” I implored.

“Sure, but now we’re going to catch his buddy, or maybe his brother,” My Uncle explained.

It was after we were back in the truck, the floodgates burst open. I started sniffling and blubbering, and my brother soon followed suit. My Uncle was genuinely wounded by this, because he thought he was teaching us a noble skill. Through the snot bubbles and stuttered speech, I pleaded with him, “Why do the rabbits use the same trail, don’t they know it will get them caught? Why would other rabbits go back down there, after what happened to that one? Why don’t they pick their own trail?”

My Uncle looked at both of us with tender eyes and said, “Look here boys, that’s just what rabbits do. They follow the same trail, and they get themselves caught. That’s their nature. And because of their nature, we get to eat rabbit stew.”

It took me a long time, staring at my bowl that night, before I could get that rabbit stew hoisted up to my pie-hole. But once I managed it, I have to admit, even to this day…. It was delicious!

Getting In Touch With Your Inner Rabbit

When it comes to issues like property taxes, are you a bunny rabbit? Do you merrily go about your daily business, paying no heed to the inner workings of government? Do you blindly accept what they tell you, trust that they have done their homework, and are doing their utmost to represent your interests? Do you accept constant taxes increases as a normal and necessary fact of life? If so, you just might be guilty of sporting some long floppy ears. But don’t take it too hard – bunnies come in herds. You are not alone.

Look, I understand. It is tough enough just to work all day, raise a family, stay one step ahead of the bills, and keep yourself afloat, let alone keep one eye peeled on City hall. People talk about the middle-class like it’s the ideal situation, but those of us living it, know how hard it can be. Besides, who wants to tangle with City Hall? How do we even know if what they are asking of us is reasonable, or not? Is 4.6% a realistic number? Well, that’s where I come in, and I’m here to tell you, it’s utterly ridiculous, and here’s why:

The 4.6% Increase Rationale

Press reports indicate that City Hall wants to increase property taxes by 4.6% next year, because of a “1.4% increase in operating costs, a 5.8% decrease in Ontario Municipal Partnership Fund money, and the fact that they used up $2,150,055 in surplus money” to keep taxes at a zero increase last year. Well, the 1.4% increase in operating costs seems reasonable, but according to OMPF website, Sault Ste. Marie is slated to receive $247,600 more in 2015, than they did in 2104. Could someone please explain that? Why does the Ministry think we are getting more money, but City Hall is reporting a decrease? Which side made a big boo-boo here?

As for the surplus, let me get this straight – you took too much of our money the year before, so you gave it back to us, and we’re supposed to be grateful for that? Was there a Plan B out there where that might not have happened? It should be automatic, and it should be a rule, if there isn’t one already. Is there a surplus again this year? If so, how come no one is talking about it?

The ‘Anti’-Rationale

It seems that City Hall has given some pretty lame excuses for why they need to crank our taxes by 4.6% this year. So, are there any reasons to think we should not suffer a 4.6% increase in taxes this year? Yes, there are!

Jackpot!

Some of you may be aware that for the last 14 years, the City has been paying off $29 million toward the new hospital. The slot revenue the City gets for hosting our casino has been bankrolling that commitment. But did you know that the balance was paid in 2014? That means that the $1.2-$1.4 million that the City receives in slot revenues is now up for grabs, and the scramble is on, to find ways to spend it. Gee, sound like there might be some surplus money floating around after all? Still see that 4.6% tax increase as justified?

The Elephant In The Gas Tank

Average citizens might have noticed an unexpected boon in our pocketbooks lately. Oil prices have plummeted in recent months, and gas prices have dropped significantly. Over in Sault, Michigan, gas prices were cut in half for a little while. Here in Sault, Ontario, we saw roughly a 40% drop in price at the pumps. So, household budgets have been pleasantly boosted by lower fuel costs. Hey, what about the City? How do fuel prices impact the bottom line, down at City hall?

A reliable source has informed Northernhoot.com that the City spent a total of $3.3 million in fuel costs last year. According to the crude math of a 40% cut in prices, and assuming that gas prices stay stable for a while, this suggests that the City’s operating cost could decrease by $1.3 million from last year! How come nobody down at City Hall has mentioned this? How come it wasn’t mentioned in the press release? Still see that 4.6% tax increase as justified?

A Dirty Word – Deflation

Most young Canadians probably don’t even know that such a thing exists, but deflation is a real word, and could become a fact this year. Economists across the country are bitterly arguing the finer points, but one thing is abundantly clear – Canada could actually experience deflation this year, largely due to the plummet in oil prices.

So, what does this mean to us, and what does it mean for the upcoming budget at City hall? Well, it means prices on all kinds of things could actually get lower this year. Some people, especially those on fixed incomes may look at this as a potential windfall, but governments and corporations are terrified of it. As far as the City budget goes, it means we won’t have to worry too much about unforeseen material costs creeping up on us, and inflation won’t play a major role in contract negotiations that may take place this year. So, where did the anticipated 1.4% increase in operating costs come from? Still see the 4.6% tax increase as justified?

Let’s Get Down to Brass Taxes

So far, I’ve managed to skewer City Hall’s reasoning for a 4.6% tax increase, and I’ve presented some evidence to contradict their claims – but didn’t I promise to deliver a balanced budget, with a zero tax increase, and a modest raise for all City workers? Gee, thanks for reminding me! I guess I better deliver it, or face the wrath of some angry Hoots. Okay, here goes nothing!

RB’s Budget – Zero Tax Increase, a 2% Raise for All City Workers

So, here’s my quick and dirty budget, gleaned simply from the facts gathered here so far. First of all, let’s give everyone who works for City Hall a 2% raise shall we? That seems reasonable, considering the threat of deflation this coming year. Lots of people won’t see a 2% increase in wages this year, but I think City workers are worth it!

The City operates on a total budget of $180,000,000, and roughly half of that goes to wages. So, to give 2% to all the workers will cost us $180 million divided in half, multiplied by 2%, for a grand total of $1.8 million. We have to come up with that much in savings elsewhere, to keep a zero tax increase.

The City stands to save roughly a million bucks in fuel costs this year, due to lower fuel prices. Simply apply that savings to the $1.8 million in wage increases. We now have only $800,000 left, to a balanced budget!

Take the revenue from the OLG slots, and apply it to the wage increase for City workers. Whatever is left, which should be somewhere around $4-600,000, use that for doctor recruitment.

Voila! A balanced budget, with a zero tax increase, and a 2% raise for all City workers! All this done by some punk on the internet, who never took an accounting class! Not too shabby, huh? Of course, there may be some other fine tuning required in some other budget lines, but I’ll leave that to the bean-counters. After all, I’ve already done all the heavy lifting. Should be a breeze, from here on in!

Be a Fox, Not a Rabbit

A rabbit follows the same trail all the time, never thinking outside the box, never stopping to consider if a different path may suit him better, or spare him from getting snared. A fox is cunning. He is wary, suspicious, and almost impossible to trap. The classic way of hunting foxes is to use brute force, sheer numbers, and run him down, until he’s too exhausted to fight. In the world of taxes and government, which would you rather be?

Be suspicious, be wary. Sniff the ground, expect a trap. Don’t let your hard-earned money get served up into City hall’s coffers. There is no need to accept constant tax increases as normal. Governments and corporations may have an addiction to constant growth, but those of us on fixed incomes will get priced out of our homes, if City Hall doesn’t stop coming to the trough, asking us for more, while at the same time piddling our money away on special projects and ski hills.

If we stand in great enough numbers, City Hall is compelled to serve us – we are the foxes, they are the rabbits. If apathy reigns, and people don’t question budgets, but instead allow tax increases to pass with no fight and no end in sight, then we are just rabbits, huddling in our own little burrows, hoping we aren’t the next ones caught in the snare.

My Prediction

Barring a full-scale taxpayer revolt in the next six weeks or so, I predict that City Hall will dangle that ominous 4.6% increase at us until the deadline, and then shave that figure down to an approved tax increase of 2.9% this year. They will argue that they found us some savings, and cut us a break, and if there are enough rabbits among us, we will all carry on, like nothing happened. Heck, we might even thank them!

I give myself a 0.2% spread on either side of my prediction, so if the tax increase comes in between 2.7% and 3.1%, I should win some kind of prize, don’t you think?

We get the kind of government we deserve, and the fate that goes along with it…

owl_feather

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