If you happened to have watched the discussions during last week’s city council meeting about snow removal and business taxes in Saskatoon, you would have left with a clear impression: The city is having a hard time paying for basic services.
Lost in the rhetoric over how hard city crews work and how bad was the winter is a simple fact. Council voted against residential snow removal last fall, which created this mess in the first place. Even last week there were news stories about impassable streets.
The reason that councillors voted against residential snow removal was to keep property taxes as low as possible. As the city has proudly proclaimed for years, Saskatoon has the lowest property taxes in Canada among cities of a similar size.
That’s great if you hate taxes. But it’s bad news if you have to pay for things. With taxes this low, you will always have problems with paying for essential services.
If we are going to be the city of the lowest taxes, we will be the city of no snow removal, constant potholes and inferior public transit, because all of those services cost money. We have to cut costs somewhere, and we have cut them on snow removal and on road repair.
We underfund our road maintenance by more than $12 million a year, and that is just to keep our streets at their current levels. To actually repair and upgrade them would cost much more. Instead of paving roads, we patch them, which allows for moisture penetration. With the freeze-thaw cycle that faces Saskatoon regularly, our streets will continue to fail.
To its credit, council has increased spending on road repair, so by 2020 we will have almost reached the levels needed to keep our streets at 2012 levels. By that time the city will need even more money for road repairs, even if the streets are gravel.
Of course we can raise taxes. However, the problem is that once you go on and on about how low your taxes are, it’s really difficult to back away from that. We can talk all we want about wanting to be a world-class city, but you never judge a government by what it says so much as where it spends its money. In Saskatoon’s case, it’s not enough even to maintain our essential services.
There are two ways to deal with this.
One is to cut back more services and get out of a lot of what the city does, such as affordable housing, building parks and funding art galleries. The focus will be solely on roads, snow removal, emergency services and utilities such as garbage pickup.
This approach provides a great value for those that don’t need social services or amenities. They get lower taxes with no noticeable impact on their life in the city. It’s a blueprint that a lot of American cities have adopted. The problem is that no one wants to live or work in those cities once the boom is over.
The other option is to do what Edmonton’s city council just did. It adopted a report titled, The Way We Prosper, which made it clear that the old way using low taxes to attract business isn’t working.
Competitive taxes are important, but they are only a piece of the puzzle. Issues such as building a livable city and integrating Edmonton’s economic development agencies in a better way were listed as higher priorities.
Cities grow because of external market forces. More important than low taxes are the commodity prices that are driving our economy. If these prices bottom out, there is little that low tax rates will do to keep or attract businesses.
On the flip side, companies and people aren’t coming to Saskatoon because of low taxes on properties and businesses. They are coming because Saskatoon is a gateway to a whole lot of prosperity.
For all of Saskatoon’s aspirations of becoming a world-class city, we aren’t even raising enough money to maintain the city we have. Pat Hyde, manager of the city’s public works branch, announced last week that this will be the worst year ever for potholes.
When you don’t bring in enough money to maintain and clear streets, it’s going to be this bad for a lot of years.
There is a reason why our taxes are so low compared to other cities. Those cities know they can’t maintain their assets and provide services at the tax rates the city is charging.
This paper has called for an alternative to property taxes to fund civic services. Until that happens, we need to start charging more unless we want to see a further deterioration in the state of Saskatoon’s infrastructure. It’s a bill that needs to be paid sometime. As much as we hate it, it will require the payment of higher taxes.
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