That 10.7% Tax Increase? Blame It On The Other Guys!
City Conversation #106 by Carol Volkart
I am delighted to have City Conversations host this political analysis of the city’s recently passed budget for 2023, written by Carol Volkart, a former Vancouver Sun editor and reporter—Brian Palmquist
When candidates for Vancouver City Council were whispering sweet nothings into voters’ ears during last fall’s civic election campaign, none of them were mentioning potential double-digit property-tax increases.
Instead, they spoke of fine-tooth combs, line-item budgets, and reallocating money. They knew residents were testy after four years of successive property-tax increases totaling well over 20 percent.
How is it, then, that within months of the new ABC Vancouver party sweeping to power, residents are facing an unprecedented 10.7-percent property-tax increase in 2023? That’s way up from the five-percent hold-the-line hike that staff presented to the new council last fall, and up again from the 9.7 percent in the draft budget council put out for public comment.
The answer, it turns out, is that it’s mainly the other guys’ fault.
As councillors speedily pushed through the 2023 operating budget at a day-long special council meeting Feb. 28, they also blamed soaring inflation, pandemic recovery, an infrastructure deficit and the need to boost emergency services. But the overarching theme was that their predecessors had messed up.
Previous councils had done such a lousy job of taking care of the city’s business that the newcomers were being forced to pin on the sheriff’s badge and clean up.
“One of the things I didn’t predict before I sat down in this chair was just the size of the huge piles of crap that we would inherit,” said new ABC Cllr. Brian Montague, a retired police officer who affects a blunt, down-to-earth tone. “So here we are, eating crap sandwiches. The work now just begins to try and deal with past council decisions and previous councils.”
Mayor Ken Sim’s version was that council is “dealing with a leaky roof. We have a choice; do we fix it, or do we kick the can down the road and let someone else deal with a way bigger problem?” But the can has been kicked down the road for too long, he said, and council will do the right thing: “We are going to fix that roof.” When ABC Cllr. Mike Klassen got around to the mayor’s leaky-roof analogy, he repeated that line twice, for effect.
But here’s the thing: Instead of doing a deep dive into what’s behind years of above-inflation tax increases and whether the money is being well-spent, the new council simply added new spending to the old. It did not get into the thorny issues of downloaded costs from senior governments (about $300 million a year), the near-doubling of the city’s operating budget in the last decade, or the ever-expanding headcount at City Hall.
ABC’s budget-day narrative was not that previous councils had spent badly or too much: The problem was they hadn’t spent enough.
Infrastructure has been seriously underfunded for years, councillors said. And services, from emergency responses to fixing potholes, have declined. Residents feel “service levels have been slipping, evidenced by litter, the buildup of graffiti and the deprioritization of the maintenance of our streets and boulevards,” said Klassen, adding that one of the main things he learned at voters’ doorsteps is that the “status quo is not an option.”
A cheerful Christine Boyle, whose OneCity party strongly promotes social justice and equity causes funded by higher taxes, summed it up at the end of the day:
“Overall, this isn’t the budget I would have expected from this council majority after four years of hearing that much smaller budget increases were too much, but I am really glad to see the importance of these investments, many of which started under the previous council, continue and be recognized as important in this budget.”
The rest of the budget-day narrative was to acknowledge the “shock” of the increase, sympathize with those who will be hard hit, and promise future increases won’t be as big.
“I know this sucks,” the mayor said, stressing that leadership means making unpopular decisions when necessary. “I know that doesn’t make you feel any better if you are struggling to make rent or feeding your family. All I can say to that is that we hear you, we empathize with you, and we do what we say we’ll do. Significant increases like this cannot and will not become the norm.”
While Sim and other ABC members promised this year’s increase will pay off in the long run, they offered few specifics about how they will go about setting the city’s finances in order.
That reflects what happened during the election campaign, when Sim frequently criticized the previous council’s high tax increases, but offered few details about how he’d handle the city’s fiscal challenges, stressing instead his business background. Similarly, ABC’s 94-point campaign platform included only one promise dealing specifically with budget issues –to publish line-item budgets for the previous five years and in future ones.
During the budget debate, generalities ruled. Councillors promised to look at ways to increase revenues, find efficiencies and cost savings, try to get more money from senior governments, and, according to Montague, “find places where we’re spending money that we shouldn’t be spending.”
But cuts and restraint got little attention, aside from proud references to ending the 25-cent fee on takeout cups, and ABC’s stand against road taxes. ABC councillors also firmly rejected Green Cllr. Adriane Carr’s plea for a one-penny-per-resident ($6,622) contribution toward a not-yet-launched lawsuit against big oil.
One of the more curious aspects of the blame-laying exercise against previous councils is that six of the 11 current council members served on them. That includes three former-NPA-former-independent councillors who now help make up the ABC council majority.
But the irony was never mentioned, even when the new ABC councillors did an abrupt about-face on their previous objections to tax increases much lower than 2023’s.
Sarah Kirby-Yung, Lisa Dominato and Rebecca Bligh made a unified stand against a 6.5-percent increase in the 2022 budget, saying it broke the city’s promise that it wouldn’t exceed five percent. And Dominato railed against a seven-percent increase in the 2020 budget instead of the five percent she thought reasonable. “As “stewards of the public purse,” she wrote in a commentary published in the Globe and Mail, “we need to work harder to innovate and pursue partnerships to make efficient use of public funds.”
This time around, all were on board with the highest tax increase in decades.
“This may be a tough budget but in fact we’ve inherited a financial challenge that dates back to several administrations,” said Dominato, noting there were warnings about budget pressures as early as 2015. “Unfortunately, there was no course correction over those years when there was an opportunity, and now today as a council we find ourselves in the current circumstances.”
Kirby-Yung called the budget tough and unprecedented, but said it’s necessary. “We know we have to be the adults in the room and fix the problem.”
Bligh was anxious to leave the past behind. “We do need to recognize where we are and take responsibility for it; we don’t look backwards,” she said. “I challenge us now to just let the past be the past. Previous administrations made decisions, it’s now ours.”
Carr, whose four terms on council have covered the entire era now under criticism, was making no apologies for the highest tax increase she’s ever seen. It’s there for a reason, she said. Under-investment in infrastructure “has come home to roost and this is the council that is going to have to pick up the ball and say it is our responsibility to make up for the underinvestment in previous years because we have actually no choice.”
What does all this add up to for Vancouverites wondering about the city’s future affordability and livability? Will this tax increase produce the tangible improvements council is promising? Will councillors find savings and cost efficiencies, more money from senior governments and other revenue sources? Will this really be the last whopping tax increase?
Residents might want to look back to Vancouver is Awesome reporter Mike Howell’s interview with then-wannabe-mayor Sim at the height of last year’s election campaign.
Asked how he would pay for his big campaign promise – the hiring of 100 police officers and 100 mental health nurses – Sim cited his 30 years’ experience “ripping through budgets” as a chartered accountant. He said he was confident he’d be able to find the required one percent, or $20 million per year, to reallocate for the new hires.
Pressed on what would be cut to find the money, Sim insisted: “We are going to go through the budget with a fine-tooth comb. I have complete confidence we’re going to be able to find one per cent in the budget. There’s a lot of dumb spend at the city.”
So far, that fine-tooth-comb scrutiny hasn’t saved Vancouverites a lot of dumb spend. Council’s 2023 operating budget is $1.97 billion, up from $1.75 billion in 2022, which The Daily Hive described as “one of the largest year-over-year increases ever.”
Carol Volkart is a former Vancouver Sun editor and reporter who covered Vancouver City Hall in the 1980s. Concerned about local democracy, she helped found TEAM for a Livable Vancouver in 2021 and volunteered in the 2022 civic election campaign.
Today’s question: How will the 2023 budget affect you?
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Inflation peaked in Canada at 8.1% and has fallen for the last 8 months. I thought that there was a lot of dumb spending at City Hall that would be cut. I guess I was misinformed.
The absolute hypocrisy of blaming it on the last Council is astounding since, as you point out, 6 out of the current 10 Councilors served on that Council. So they are effectively blaming themselves! And what of a line item budget, so we can all see where the money is coming from (mostly us) and where it's all going?