The Facts on City Tax
Our class last week gave me a renewed sense of the purpose, responsibilities and consequential effects of municipal government. The municipal government’s fingerprints are plainly visible with every step you take around the city, a sentiment that was echoed by the program alumni working in that sector. Each alumnus touched on the fact that the reason why they chose municipal work and/or the reason they enjoy it is because of the tangible difference they are able to see with the work they do. By way of a single example, if they work on health policy in COVID-19 they are able, in visiting vaccine clinics, to witness their work in action actively improving the lives of city residents. The long list of over one hundred and fifty services provided by municipalities (though I guess that number is debatable) is intuitively irreconcilable with the limited authority that cities have as to the funding and manner of delivery of critical services.
In class, Professor Eidelman suggested four reasons why municipal taxes are problematic. The first is that they are hard to raise. This difficulty is understandable. Once people have access to things after time has passed, it seems they begin to act like the services are something to which they are entitled, and they will be unlikely to be content to pay more for the same service. This is particularly true where the services are visible (it is more difficult to complain about federal and provincial expenditures which are more difficult to understand and see). I was thinking this myself during the snowstorm last week, that prior to the Rob Ford era of cutting the gravy train and selling off publicly funded snow clearing services, the snow may have been cleared by now (whether or not that is true).
The other problems outlined are that taxes work backwards in that they don’t grow with the economy, they are regressive and ignore payers’ ability to contribute, and they privilege homeowners over renters.
What can be done about municipalities’ lack of authority and ability to raise and levy taxes? The authority piece is harder to tackle and would require legislative amendments and the support of elected officials. The taxes are also a tough issue to address, I wonder the opposite of what Professor Eidelman suggested, if COVID-19 may actually help. I certainly acknowledge that there are additional burdens imposed due to COVID-19, with material spending on curbing the spread of the virus. However, I’m curious if there aren’t corresponding savings from services and resources that aren’t being used, and some efficiencies realized through remote work. Opportunities may have arisen for efficiencies and re-allocations that could net out the additional expenditures incurred.
