Local politicians plead for bigger piece of tax pie

Kootenay municipalities not happy with 50-42-8 formula between federal, provincial and local governments on tax dollars

Local government is struggling to pay the bills without more help from the province and Ottawa.

A meeting of Kootenay politicians last Friday in Cranbrook brought out a resolution pleading with the provincial and federal governments to change the funding formula for municipalities and regional districts.

“We need a different partnership,” said Cranbrook Mayor Wayne Stetski.

Of each tax dollar that a B.C. resident pays, 50 cents goes to the federal government, 42 cents goes to the provincial government, and eight cents goes to the municipal government.

But municipalities are expected to maintain certain services with those taxes.

“The communities’ biggest issue is probably aging infrastructure and the impact of trying to pay for that,” said Rob Gay, chair of the Regional District of East Kootenay (RDEK) board of directors.

“We feel as local government that many things get downloaded on us,” he added. “What we find in rural B.C. is our population in many cases is declining and the services that are required are the same. So the taxes go up a little bit each year just to stay even.”

Mayor Stetski used Cranbrook’s roads as an example of the challenges facing local government. He said in order to get on top of the roads problems, the city would need to spend $15 million a year. Presently, it spends $3 million. But each $200,000 increase to the city’s budget represents a one per cent increase in property taxes.

“You do the math: that’s a 60 per cent increase in taxes in order to just make up the shortfall for roads in Cranbrook. It is not sustainable. We need a different kind of partnership in the future,” said Stetski.

Kootenay politicians also agreed that the grant formula between local government and the provincial and federal governments is ad hoc and unpredictable.

RDEK Chair Rob Gay said that grant applications carry too much weight.

“What it is right now is there is generally a pot of money and communities apply for it. It pits one community against another because there is only so much money to go around,” said Gay.

“You spend many hours writing your best case. Well, that doesn’t show the greatest need, it just shows who’s the best writer for grants.”

What’s more, according to Chair Gay, it makes it difficult for local governments to set their own priorities. If a grant program arises, the municipality or regional district will pursue it, whether the project it wants to work on is in its one-year plan or its five-year plan, because they don’t know when the funding will next be available.

“So you do something that was five years out now. It really impacts your planning,” said Gay.

“What we would rather see is: here’s some money for your community – now you have a plan, follow your plan.”

“The current approach to ad hoc grants distorts community priorities and makes long term planning for infrastructure and community services extremely difficult – what we need is consistent, predictable funding that allows us to plan and budget for the next five years,” said Mayor Stetski.

Last Friday’s meeting at the St. Eugene Golf Resort and Casino brought together local government officials in the Association of Kootenay and Boundary Local Governments, with about 60 government officials as well as school board trustees, for a professional development workshop on the challenges of funding for local government.

“We wanted to make sure our members were clear on that situation,” said Chair Gay. “They aren’t dreaming up that things are tough: they really are.”

Kootenay East MLA Bill Bennett, who is the B.C. Minister of Community, Sport and Cultural Development, also attended part of the meeting on Friday, and said he would rather different levels of government discussed funding in private.

However, he said that the provincial government is in difficult economic times as well.

“We want to work with local government; we understand that they have challenges. But so do we – we are trying to balance the budget and we have had to tighten our belts. So we are all in this together. If they want us to give them more money, I guess we have to raise taxes on individuals and business, and we are loathe to do that,” said Minister Bennett.

He added that the BC Liberals have upped funding to municipalities.

“We have actually increased funding to local government by over $2 billion since we were first elected in 2001.”

The provincial and federal government is currently in talks to create an infrastructure grant program that municipalities could take advantage of in 2013 or 2014, Minister Bennett added, which could help with water, sewer and roads.

“That will be a major infrastructure program with a few hundred million dollars in it,” he said.

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