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Municipalities Playing Games With Total Tax Take

By Ben Meisner

Friday, December 18, 2009 03:44 AM

Prince George Mayor Dan Rogers at last week’s Council meeting made the comment that the share of the taxes collected in Canada that go to municipalities has dropped over the past two decades to about 9% of the total  taxes collected.

Now if you were to take the comments for face value, you would quickly side with the Mayor in his search for some new money from the Feds and the Province. You would quickly side with his thoughts until you examine the facts.

The largest single increase in Taxes in Canada is in health care. The province will spend about 36% of the total budget in 2010 up from 31%. Health care with the federal government is eating up the lion’s share of the 240 odd billion that was collected in taxes in 2008. With the feds , that money is used not only for health care , but also to provide an ever increasing demand on Old Age Security, Child benefits , EI , and other social programs of a like manner.

We also in this country face the problem that we have borrowed our way into a position where in the case of the Federal government, 15 cents of every dollar goes to pay debt, and while the City of Prince George seems to be able to deflect the issue, theCity  also carries   debt.

The point is that the single largest increase in government spending is coming about from health care and an ever increasing aging population.

Trying to make a case for more money for a city based on a percentage of the total take of taxes is like comparing the tax base of Vancouver to PG.

Municipalities, including Prince George have over the past few decades had an ever increasing desire to provide more and more facilities under the guise that it is what the public wants. Well the public also understands that in order to have these projects, someone must pay and the only people standing in line are the taxpayers of the local municipalities.

The phrase "back to the basics" just doesn’t seem to resonate with the politicians of the day who find it easier to say yes than no, and that creates a major hurdle that cannot be blamed on the Federal and Provincial governments.

I’m Meisner and that’s one man’s opinion.


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Comments

Sounds like we need to make people more responsible for their own health.
Did anyone ever think that we could end up being a poor society that has failing infrastructure, people on the streets, hungry people, without the swimming pools, the ice arenas, the ball parks, the festivals, etc. etc. just to make sure everyone stays alive and lives as long as they possibly can.

I know that is an extreme picture, but maybe not. I also know it is a taboo subject to many. But maybe it should not be.

Everyone speaks about sustainability. Yet no one understands what sustainability really means. It has to be applied all around.

One way to look at sustainability is to look at the percentage of taxes that certain programs take - health, education, natural resources, infrastructure, etc.

So health care is moving up from 31% of the budget to 36%. That could be because the total income from taxes is dropping or because the cost of health care is increasing, or a combination of the two.

So where are we going with this? 40%, 45%, 50%??? What are the planners saying? Where in health care is the money being spent? What are the service changes, if any?

Why would we not be increasing taxes to accommodate a service that is an insurance protecting our lives?

Is the bubble going to burst and the money will move away from a tax funded service to private insurance so that much of the tax burden is shifted from the general population to those who can afford insurance? The rest will be left to a diminishing quality of emergency public service.

This City is not the only one pushing the Feds and the province. Listen to the provincial and Canadian Municipal Association and you will have heard this for the last decade at the least no matter who is at the helm in the various cities. The economic situation over the past year has made those matters worse.

We are a long way from sustaining anything, or maybe I should say everything. Maybe we have simply reached the peak of “quality of life” on this earth for a few decades or even a century. The good times have been had and we have been lucky enough to have experienced them.
Of course health care is increasing. Not only do we have an aging population, but the increase in procedures is astronomical. 10 or 20 years ago there were no where near the number of surgeries to fix hearts and joint replacements and a host of ever increasing diagnotic equipment. We save many more lives and have increased the quality of life. It is for our good but comes at a cost.
There is, of course, another way to look at this.

Just as one can say that individuals should be taking care of their own health costs, one can pass that thought through to municipalities should be taking care of THEIR own "health" costs. In other words, those costs that make a city "healthy" which would include its infrastructure, its ability to be economically viable, its recreation and entertainment, etc. etc.

As with people's health, those who can afford to maintain it will do well. Others will limp along with some lesser services, but will survive for a while. Others will have great volunteer efforts and be able to maintain some level of digintiy in that fashion. Then there are those which will have to accept their fate of an early demise.

As with personal health, once the systems in a city start to break down and the whole will deteriorate, what once was will soon disappear.

So, should there be a universal health system for cities, or should they self insure?
Then there is the matter of private education. Why should it be a public responsibility?
Great comments, Gus! One would think that a prolongued economic downturn is not the best of time for a City to embark on new borrowing for mega projects such as are being contemplated now by those at the helm.

That, together with the relentless increases in fees and taxes are simply an indication that some people are out of touch with reality.

They also don't listen very well! Take the suggestion by some citizen that garbage cans be all lined up along one side of the street instead of on both sides!

What an excellent idea! The truck saves fuel, time and wear and tear!

Silence from City Hall.

The ten day pick up cycle rather than weekly is also worth looking into!

Again, mum is the word. However, garbage collection fees have already increased again.

Go figure!

I always laugh when people make statements relating to our health care being "Free". It is very expensive, make no mistake. And the price isn't going down any time soon, if ever.

Maybe it's time to look at other options, the socialistic system we have become accustomed to is not sustainable.
And then there is the Administration waste as well. We must not forget how much money stays at the top of the pile. We buy a box of Band-Aids for 5 dollars, the hospital is charged 5 dollars for one band aid. It is a money grab gouge right from the administration sector all the way to the pharmaceutical companies. Ask any nurse about the waste. Out of the 30% I am willing to bet that only 15% gets to the actual treatment sector.
So where does all this money from the money grabbers go to? Does it go out of the country to buy all these money grabbers vacations in Mexico and bring the Mexican economy up to par with ours?

Do people buy the wrong things with the money they grab. Tie it up in million dollar homes when a quarter million dollar homes should do?

Do we need salary controls? Price control? Is the free enterpise system causing the inequities and inabilities to be sustainable? Or is it the socialistic side of our system?
"the hospital is charged 5 dollars for one band aid"

It does not help to solve things by exaggerating.
Gus, That is a great joke, there is no free enterprise in Health Care. It is government run. And it is not a fair system. We have this love for our universal health system that rewards people for being unhealthy.

Let me explain. Your average family pays $108 a month for MSP; Family A eats fast food, high sugar, low nutrient foods, smokes, drinks and doesn't exercise. Family B eats well, exercises and avoids smoking and drinking, their cost of living is going to be much higher because healthy food is expensive, sports are expensive etc etc. Family A is going to be using the healthcare system much more.. chronic illnesses are VERY expensive. Their return on investment is much higher. So we have a healthcare system that rewards and financially encourages you for being a leech. And we wonder why the system is unsustainable.
"So health care is moving up from 31% of the budget to 36%. That could be because the total income from taxes is dropping or because the cost of health care is increasing, or a combination of the two."

It could also be because some agencies are changed from Crown Corporations to Private Corporations owned by the province, like BC Ferries. That change means costs are not recorded so the stable health care costs appear larger as a percentage.

A short while ago The Tyee did an evaluation of health care costs as a percentage of the Gross Provincial Product (GPP) and it was essentially flat, at about 9% over the last 20 years or so. It costs the same now, as a percentage of our economic activity, as it did then.
Very good point ammonra. We must always be sure we are comparing apples to apples.

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Travism .....

Show me that family A is more of a burden on the health care system than family B. In other words, show me the figures that tells me that family A does not die a decade earlier on average and the total cost to the system over the lifetime of that family is more than family B.

Please do not forget to include the taxes paid on tobacco items as well as beer or whatever. They may also be more likely to be gamblers. Those discretionary taxes to the state can be significant.

As far as family B is concerned:

1. yuppy exercise is most certainly expensive ..... normal exercising is about the cheapest thing one can do to improve one's health. One does not need fancy machinery or clothing. Just make sure that when you run or walk, that you do it somewhere outside the bowl of PG. Walking along the riverfront downtown may reduce rather than increase you quality of life in later years (a cost to the health care system)and even the length of you life.

2. eating well is also not expensive unless you end up buying questionable organic foods and are a fanatic about so called "healthy" eating. Use less salt, buy a good mixture of veggies and fruits, minimize meat and fatty foods (there is a cost saving right there), eat smaller protions more often in the day, and at the right itmes of the day, etc. etc.

3. avoid eating fast foods and save on top of that.

3. the savings on not smoking, not drinking alcoholic beverages and not eating fast foods can virtually feed the person who has ditched those habits.
BTW travism, where did you get the notion that I considered the Health care system in Canada to be a free enterprise system?

I wrote: "Do we need salary controls? Price control? Is the free enterpise system causing the inequities and inabilities to be sustainable? Or is it the socialistic side of our system?"

When I wrote that, I did not mention the health care system. I was speaking about our total society and its economic systems for various programs.

Interestingly enough, the education system is a socialist system. It is run by the government and teachers are government employees through their SD employers and post secondary system employers.

I would cagtegorize the health care system as a combined system in my eyes with some MINIMAL level of salary and price control.
Gus,

1)Your free enterprise system comment was a follow up to the comment about a money grab which was in relation to the conversation on administrative waste in the health system. You can see how I came to my conclusions as to what you were commenting on. And for completion sake the only people who have the salary controls, IMO, are the highly intelligent, highly trained individuals whom deliver the care and are told how much they are allowed to charge by the administration.

Anyways: Diabetes, Cancer and Cardiovascular Disease cost the BC system 4.69 Billion per year (using 2003 Data), here is my source http://www.ocdpa.on.ca/docs/OCDPA_EconomicCosts.pdf

Since they are around 75% avoidable (An evolutionary perspective on human physical activity: implications for health. Eaton, SB. Comparative Biochemistry & Physiology Part A: Molecular & Integrative Physiology; Sep2003, Vol. 136 Issue 1, p153, 7p), families such as Family A cost the Healthcare system around $3.52 Billion more than families like Family B.

Your argument about tobacco and beer hold no water since Family A has choice on if they buy those items, Family B has no choice when it comes to MSP and Tax rates.

Fruits, vegetables and lean meats are much more expensive per calorie than highly processed or fast foods. I don't need a reference for this, go to the grocery store with a pad and paper, do your own study. Fast food is basically the cheapest way to feed a family, you can get your 2200 calories per day for less than $10. Try doing that with fresh food.

Your point on the cost of exercise is well taken.




Gus:-"We are a long way from sustaining anything, or maybe I should say everything. Maybe we have simply reached the peak of “quality of life” on this earth for a few decades or even a century. The good times have been had and we have been lucky enough to have experienced them."

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No, I don't agree with that at all.

The problem with our current belief in sustainability is clouded by misconceptions about 'money'.

What should determine the level of healthcare we are able to provide is our actual ability to provide it.

What is 'physically possible', in other words, modified by what is, in the minds of the majority of people "socially desirable" and "morally correct".

If we look at the subject from that persepective, I think that we would unquestionably see that we could deliver a far greater degree of healthcare in most areas covered by that broad-based description than what we are currently doing.

We do not lack the "knowledge", nor the "resources", nor the "personnel" to rectify many glaring deficiencies in our overall healthcare system.

What we ARE said to lack is the "money". And it's just there that we should begin our examination of WHY.

Now a shortage of money, which our parents and grandparents were told incessantly could not be overcome for ten long years through the Depression in the 1930's, and thus conditioned that generation's complete inability to do things that needed doing, even though otherwise they certainly could've all been done, miraculously vanished with the Declaration of War against Nazi Germany in 1939.

The Minister of Finance, who had cried poor when asked for funds to fix a road, or build a bridge, or keep a school open, or to buy some food to feed those starving ~ food that was otherwise being purposefully destroyed ~ didn't rise in the Commons and woefully explain that while we all agreed Hitler was an evil man and needed stopping, "...we just don't have the money to do anything like that, we're broke. We'll just have to let him take over Europe, and then the World."

No, that didn't happen. Our ability to enter and wage war was conditioned NOT by our "lack of money", but by our ACTUAL ABILITY TO DO WHAT WE WERE DETERMINED TO DO. And the same is true today.

And so it is with providing healthcare and a multiplicity of other goods and services, whether delivered 'privately' or 'publicly', that we are MORE than capable of physically providing, but continue to be hamstrung by providing the 'money'. Lets, for once, realize that the FIGURES MUST REPRESENT THE FACTS if we're ever to achieve the full potential we are more than capable of, and completely sustainably, too.