yeah, tax increases suck, but so do giant potholes.

After a decade of unsustainable growth (aka: urban sprawl) and artificially low-tax increases, the usual suspects are up in arms over proposed tax increases in Edmonton. Average tax increases in some Edmonton neighbourhoods are expected to range above 20% in 2009 (these neighbourhoods include Beacon Heights (21.4%), Bellevue (22.2%), Bergman (23.8 %), Beverly Heights (20.3%), Central McDougall (20.1%), Cromdale (20.2%), Highlands (20.5%), Montrose (23.5%), Newton (22%), Rossdale (24.2%), Rundle Heights (25. 6%)).

Yes, having to pay increased taxes really sucks. But anyone who is interested in improving the City of Edmonton – repairing delapetated roads, fixing transit systems that are a decade behind in expansion, improving Edmonton’s quality of life through service backlogged expansion improving services, and compensating for a lack of a regional cost sharing formula for the capital region – will understand why this type of increase in the case (even if they don’t agree with it). After Edmonton kept an illogically tight-lid on spending during Bill Smith‘s reign as Mayor, City Council is now facing the challenge of catching up with the growth that Edmonton experienced in those years, and property taxes are one of the only sources of income that a municipality has to turn to.

According to a 2004 Canada West Foundation report on spending in Edmonton:

Total operating spending in 2003 (measured in per capita terms and adjusted for inflation) was 9.8% lower than in 1990, and under-investment in capital has also unleashed a sizeable infrastructure backlog, which could be as high as $3.2 billion over the next ten years.

The report also states that property taxes in Canada only make up a small portion of the total taxes. Across Canada, all forms of property tax comprise less than 9¢ out of every tax dollar paid. Also interesting is a February 2007 Edmonton Journal editorial titled ‘Low taxes, low quality of life‘ highlighted a study by Michael Petit for the U.S.-based Every Child Matters Education Fund:

…forms of social spending also tend to get cut when governments buy into the “gospel of wealth” and begin slashing taxes, the very kinds of programs that were targeted in Alberta budgets during the Klein era. Petit said child care, foster care, social workers, preschool programs and physical activity for young children are also critical in creating healthy, productive children. And where these programs have been cut by government, private and not-for-profit sectors have not been able to fill the gap.

“(The study) dispels ideologically driven myths that government-supported programs are ineffectual and that taxes are evil,” Petit said. “It shows that some states do much better for children than others.”

I don’t see taxes as the demonic socialist wealth transfer scheme that some more less forward-minded political watchers do, but I do recognize that if Edmonton is to become the smart world-class city that it should be, turning to the outdated ideology of Ronald Reagan won’t cut it.

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