Tuesday, April 21, 2015

Smoke & Mirrors Accounting??

2015 Nanaimo Financial Plan
0% Tax Increase For 2015
(Except for the 1% Asset Management Tax)

After considerable time spent by this new council trying to understand the city's financial plan for 2015, the five year plan was finally given first three readings at the April 20 council meeting.

It seems that some councillors didn't like the plan because it cut too much from the budget, while others didn't like the plan because it didn't cut enough. However, that was a moot point as we are now at the drop-dead dates for getting our ducks in a row to set this years tax rate. Bear in mind that if they had not given approval last night the city would not be able to put the needed bylaws in place to legally collect taxes this year.

Councillors Brennan, Pratt and Thorpe all expressed their concern that by holding the line on taxes this year, we are merely postponing the inevitable in future years. They seem to have little confidence in a core service review revealing opportunities to control spending at city hall.

The overuse of the term 'Asset Management' tax I presume is to somehow make that increase more palatable by saying it goes to asset management, something I had always thought my regular taxes were going to support.

How can staff wages be raised by 2% and yield a 0% tax increase? (Smoke & Mirrors?)

I realize the following could be subject to some tweaking but I believe it fairly raises the question of how can we raise city hall wages by 2% without increasing taxes?

The 2014 Financial Statement indicates a wage and salary cost of $58,876,116 which does not include a raise being negotiated by IAFF nor does it include RCMP wages. The statement also reports that the total revenue from taxes was $94,551,269 for the year.

A 1% tax increase is equivalent to $945,551. A 2% increase in wages and salaries is equivalent to $1,177,522. This begs the question of how staff wages and salaries can increase by an amount that is greater than a 1% tax increase, while not increasing taxes??

Smoke & Mirrors???


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