Property taxes HAVE to go up every year, at the very least to keep up with inflation. Gimmicky property tax freezes essentially result in a net reduction of revenues for governments. Income taxes and sales taxes, on the other hand, are based on percentages that grow with the economy, so they can stay stagnate and still generate more revenues in good times. If people earn more and spend more, the provincial and federal governments generate revenues. The City's largest revenue driver -- property taxes -- doesn't work that way.
Poor management is a customer service issue and may involve more spending in the short-term to identify the issue and work to fix it. I agree that it's worth doing, though.
While there are often good reasons for service cuts or tax cuts, I truly think about 90% of the current City Hall debate is being driven by a critical misunderstanding about the differences between how municipalities raise money and how the provincial/federal governments raise money.
"You can't raise property taxes forever." Wrong. You
have to raise property taxes every year simply to maintain existing services. At the municipal level, taxes are measured in
absolute dollar terms. But at the provincial and federal level, taxes are measured as a
percentage of income or as a
percentage of sales. These tax revenues grow with the economy, even if taxes are not "raised." And so, when a provincial or federal government "raises taxes," they are not only claiming more tax revenues in absolute terms, they are claiming a larger share of the
total pie going forward.
This is what you can't do forever, and this is why "raising taxes" at the federal/provincial level is worthy of serious debate. But at the municipal level, "raising taxes" is what cities do simply to continue existing.
"We have a structural deficit." Well, not exactly. Municipalities, by law, are not allowed to run deficits, and are only allowed to borrow money for capital purchases, like roads, bridges and buildings. The provincial and federal governments, on the other hand, are allowed to borrow money for ongoing operational expenses, like salaries. Everybody knows you are in trouble if you are always paying for groceries with a credit card, but that mortgages are a normal and justifiable debt. When people freak out about the federal or provincial deficit, they are worrying about credit card debt, which can keep increasing unless there is pressure to stop the spending, pressure which fiscal conservatives are happy to apply (and rightly so). But at the municipal level, no one needs to "pressure" the government to balance municipal books. The only debt we have is mortgage debt, and the "structural deficit" is a simply a term meaning "Gosh, every year it is harder and harder to balance these books, as we are required by law to do."
Fiscal conservatism can be great, but not if people are ignorant about the legal restrictions that already prevent the municipal government from straying into the fiscal messes that provincial/federal governments regularly find themselves in. The problems are different!
