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Municipalities have their fair share

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Last week, the Association of Manitoba Municipalities (AMM) unveiled their “Fair Share, Fair Say” election campaign to push for more and higher taxes. Manitoba’s mayors would have you believe local governments are operating at maximum efficiency and only new revenues from the provincial government can solve their infrastructure deficit.

The reality is that municipalities are far richer than they let on and new tax dollars will continue to fund overly generous municipal wages and benefits, not infrastructure investment.

Municipalities continually complain they are shortchanged by the tax system and, as a result, receive less revenue than needed to fund their services and infrastructure. To prove their point, local governments claim they collect only eight cents out of every tax dollar.

Conveniently, municipalities fail to count revenues collected through user fees or grants and transfers from provincial or federal governments in their analysis. When these revenue sources are included, municipalities receive nearly double what they claim – 15 cents of every tax dollar collected!

The real problem is that many of your municipal tax dollars are misspent on day-to-day operating expenses, like wages, that do little to create long-term benefits for our communities. In fact, over $100 million annually is diverted from infrastructure investment to fund unwarranted operating spending according to the Canadian Federation of Independent Business (CFIB).

In CFIB’s latest Manitoba Municipal Spending Watch, inflation-adjusted operating spending in Manitoba’s 26 largest communities grew by 20 per cent from 2008 to 2013. This growth rate is nearly three times faster than population growth, which is considered the sustainable spending growth rate by small business owners. 

Spending beyond this benchmark cost municipal residents $606 million over the six-year period. That’s enough cash to build four Waverly underpasses or pave Highway 75 nearly the entire length from Winnipeg to the US border!

If local governments got their operating spending under control, there would be far more resources available for infrastructure. To get there, municipalities must take a hard look at their labour expenses, which account for 57 per cent of their total operating costs.

Today, Manitoba municipal workers receive 14 per cent more in wages and benefits than people doing the exact same jobs in the private sector. This advantage occurs through higher wages, shorter work weeks, and gold-plated pension plans.

Instead of controlling labour costs to free up existing municipal revenues for infrastructure, municipal leaders choose to ignore the issue. Not a single mayor has recently called for the elimination of the municipal pension bridge benefit, which provides up to $60,000 to municipal workers who retire early. Unlike in Ontario, Manitoba’s municipal leadership is not calling for reform of provincial arbitration laws, which are one of the main causes of spiralling municipal wages.

Rather than asking the Manitoba government for another handout via a greater share of PST revenues, municipal leaders should be asking the province for a hand up, by changing labour laws. With these laws changed, municipalities could bring their labour expenses back to sustainable levels and use more of their existing tax revenues to fight the infrastructure deficit.

Unfortunately, AMM’s new election campaign shows Manitoba’s mayors have once again decided to use the infrastructure deficit as an excuse to gain more tax revenues to pay for their unsustainable labour costs.

Municipalities already get their fair share. It’s time Manitoba mayors recognize this and get to work.

Elliot Sims is the Manitoba Director of Provincial Affairs with the Canadian Federation of Independent Business (CFIB). He can be reached at [email protected] or you can also follow Elliot on twitter @CFIBMB

Republished from the Winnipeg Sun March 2, 2016
Republished from MyToba.ca March 7, 2016
Republished from The Western Producer April 14, 2016