The tax cutter crowd need some perspective

I don’t like to pick on people by name in this blog but I do once in a while to illustrate a point.

The point today is that the tax cutter crowd (those who only want government to cut taxes) don’t even exhibit much common sense some times.

Take this column for example.  It’s written by Herb Duncan described as aa Saint John businessman.  Duncan says:

A lower property tax rate, as well as more prudent use of taxpayers’ money, will go a long way toward rebuilding Saint John’s population. The resulting greater demand and prices for homes will give provide an opportunity for those wishing to retire to realize a reasonable return on their greatest investment, their home. Do Saint John citizens deserve less? This council was voted in with a promise to reduce the tax rate. Nothing else is acceptable. Nothing.

 

These are fairly strong words.  Let’s do a little analysis here.  A typical Saint John family might pay $1,500/year in property taxes.  If City Hall makes a big cut of 3% off the tax rate, that family will say $45/year or about four bucks a month.  Does Duncan really believe that this will result in “greater demand and prices for homes will give provide an opportunity for those wishing to retire to realize a reasonable return on their greatest investment, their home”?

Of course he also talks about more prudent use of taxpayers’ money as well. Let’s assume then that City Hall can slash spending by 5% next year.  The city gets about what 60%? from property taxes so that means that typical family might save $45/year or four bucks a month from those cuts to city services.

Obviously competitive tax rates and good government matter.  I realize that but I think most reasonable people realize that if the goal is to ‘rebuild Saint John’s population’ it is more than a matter of a few percentage points on a tax rate.

Duncan is concerned about property taxes on older Saint Johners on fixed incomes.  I am not belittling that and $45 does matter when you are on the margin.  But that is almost a social issue – target your tax cuts at a population that is in need.  $45/year to the average Saint John household (earning $60k per year and up) is not as big a deal.

The real issue for them is having a livable city with a good environment for raising kids, etc.  The issue with the bedroom communities is a larger one having to do with the free rider problem and it won’t be solved by small cuts to a tax rate.

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11 Responses to The tax cutter crowd need some perspective

  1. I agree with Duncan to an extent. Saint John’s tax rate is higher than the other cities in NB, and higher than the suburbs of the city. By lower the rate the precieved inequity can be taken out of location decisions. I’m not saying someone would move to Moncton because of the municipal tax rate, but they may move to the suburban communities over the inner city.

    The reason Duncan and friends get so much appreciation in the city is that many see the city as being mismanaged. While a lower tax rate would not be a big deal for most people’s budgets, it would signal that city hall is at least trying to act reasonably.

    The city’s big ticket expense items are not revenue generators – the city is run for special interest groups and lobbies. The proposed police station is getting most of the city’s new capital spending. The west side is got an economic development officer because politicans thought having a city wide economic development policy was unfair. A bus garage was built for tens of millions of dollars, because the old one was in the way of a big box store.

    I don’t care if the tax rate goes down for the sake of a few dollars, I want it to go down for the sake of preceived justice. If the rate was kept in line with other cities, people would be far less offended by the way the city is run.

  2. Rob says:

    Isn’t there also the problem of the inner city losing tax revenue to the suburbs, while still tasked with funding the city infrastructure?

  3. That’s the free rider problem.

  4. Saint John has been moving toward a donut population distribution, but to be fair the suburbs do partially fund the major arena (Harbour Station), the Imperial Theatre, Enterprise Saint John and have been supporters of the university. I don’t think we can blame all of Saint John’s cost woes and management issues on the commuter culture.

  5. richard says:

    I used to live in SJ and have always thought that is was the only real ‘urban’ urban area in NB. I think that in this case you have got some different issues at play. Its fine to say that you want taxes across the city and suburbs to be fair, but cutting them won’t make things better in SJ. If the problem is management, then that’s the problem that should be addressed. Is Duncan just throwing up his hands in the air – ‘I give up; SJ is toast; but at least lower my taxes’?

  6. mikel says:

    This is simply Irving being Irving. The story is nonsense and can’t even be taken seriously. First, we know the Irvings hate the Courts, ever since the last election, when they took a VERY public stand on who they wanted for Mayor, they’ve been after council.

    The author is supposedly a ‘businessman who follows politics’. Really? Why then can this businessman who follows politics be reached at a telegraphjournal email? Does anybody who ever writes a piece for the Journal get a TJ email?

    The story is ludicrous at face value, first he talks about all the people he hears talk about the Council, and somehow this businessman just happens to know that its the voice of ‘the silent majority’. Really? Where does that information come from?

    Personally, I think the only GOOD thing about the story is the bit about the ‘recall’. I’d LOVE to see recall powers in Canada, but forget municipally (and the writer mistakenly thinks that 15% signing a petition simply ‘turfs them out’, which isn’t true), could you imagine such a thing federally or provincially? In poll after poll canadians consistently rate municipal politicians highest.

    But back to the story, his complaint is about property tax rates-and of course that ‘problem’ existed before THIS council, and in none of those complaints about these elderly folk practically taking up arms is there any indication that THAT is what they are so angry about.

    Also interesting is the final line that this council was elected SIMPLY to deal with the property tax issue-“nothing else is acceptable”. That’s odd, because I followed the election fairly closely and that certainly wasn’t the main theme of the election.

    Nobody LIKES property taxes, nobody thinks their ‘fair’, but the idea that people will retire or locate based on a couple of hundred dollars in PT is delusional. Simply ask YOURSELF that question. Did YOU move to where you are currently based on property tax rates? Seniors are well known to not move AT ALL until its to a retirement facility or with family. Families are well known to move to locations based on schools.

    This is what Irving does, keeps the talk about ‘lower taxes’. Makes it sound like thats all government should be doing. Make it sound like its a GOOD thing, even if the government is broke (and keep in mind the feds and prov pay a lot less to cities and have been downloading services to cities for years). And you can even read the comments (mine too:) to see that most people just have general complaints about ‘how bad the city is run’. They’re venting. Do they really think that much has changed under the new Mayor? EVERY canadian just about has those kinds of complaints, again, I live in the ‘most intelligent community’ in the world, and we’re still paying off a recreation complex because our City Council never bothered to read the contract when they borrowed the money to pay for it.

  7. lol says:

    Premier confirms that Miramichi firm is seeking financial assistance
    (s)FREDERICTON – Premier Shawn Graham has confirmed what’s being described as one of the province’s worst-kept secrets: Miramichi-based Atcon Construction Ltd. is seeking financial help from the provincial government.

    Graham Graham wouldn’t reveal the specifics of the request but acknowledged the company is facing some difficulties and has made a formal request for government assistance.

    “They’re experiencing some challenges today, similar to other companies, but they have been able to continue to secure contracts outside the Province of New Brunswick which are very, very important,” Graham said. “Those discussions will continue.”

    The provincial government has described Atcon Construction as a success story when it comes to growing businesses and diversifying the province’s economy.

    Last year, the Liberal government gave Atcon Holdings Inc. a $13.3-million loan guarantee to assist the company in manufacturing steel beams that will be used to manufacture a bridge in the Northwest Territories.

    Atcon didn’t respond to requests for an interview yesterday.

    The Progressive Conservatives first brought up the issue several weeks ago in the legislature. Although the Opposition didn’t name the business, MLAs questioned why government would consider giving $50 million to a construction company while announcing budget cuts.

    “It’s probably the worst-kept secret in New Brunswick that they’ve been at the government table,” Opposition leader David Alward said yesterday.

    Alward, who has since met with Robert Tozer, the CEO of Atcon, said he’s not necessarily opposed to the company receiving government funds.

    The company is an important player in the economy of Miramichi, he said. However, Alward stressed he wants all construction companies to be treated fairly.

    “There are a lot of construction companies in New Brunswick,” he said. “Now I realize that Atcon is broader, that they have many other divisions than strictly construction, but I would have concerns if the financial support went to directly compete against other construction companies.”

  8. lol says:

    Sorry Rick from Bristol, but the reason they were awarded the jobs at CNRL in Alberta is because Frank McKenna was on the board of governers for CNRL & we all know is close friend of Tozer, probably now investor or partner after this TD Financing goes through. Its a construciton company… they don’t create the projects or the jobs, they simply pimp the workers and skim the gravy to buy themselves jets, hummers, escapades and lexus’.

    No bailout needed, thanks. If Alberta thinks they’re valuable to their economy, let Alberta bail them out.

  9. Look guys, I don’t want this blog to turn into a political rumour mill. There are many other venues for that. Let’s keep the inside baseball stuff to a minimum. We are looking for constructive ideas that move the province forward here.

  10. richard says:

    “The author is supposedly a ‘businessman who follows politics’.”

    To be fair, the author has had a column in the TJ for quite some time. He has been quite critical of the city’s administration (even prior to the last civic election), and given some of the things that have been going on, the admin needs some criticism. Just because both he and the Irvings don’t think much of the Courts, doesn’t mean he is a pawn of the Irvings. After all, even LJR and KC were pals at one time.

  11. mikel says:

    Then to be fair, the TJ shouldn’t be saying a ‘local businessman’ but a ‘TJ columnist’. There’s no doubt that you don’t simply give a pass to local government, however, just go look at the press the previous council got (almost NO criticism from columnists) and compare it to this one. By their fruits ye shall know them, so to speak. I certainly am not saying he’s a ‘pawn’ of the Irvings, his view is not outlandish or unreasonable, however, we’ve dissected numerous Irving articles here and they are all virtually identical, AND nonsensical (meaning their conclusions don’t follow from their premises). This one is no different. To use a media criticism analysis, one journalist stated “are you saying that I’m biased?” and the answer was that if he DIDN”T believe what he believed, he wouldn’t be sitting in the interviewer’s chair. IF this guy thought differently, he WOULDN”T have a TJ column, certainly not an article like this. In fact, I think I even counted some typos, so by the TJ’s editorial standards, since he didn’t talk with opposing sources, shouldn’t he be fired?

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