From the Calgary Herald – Nov 20, 2008

Can we all take a breath? After the extraordinary furor of the last couple of weeks, city council is finally doing what it should have been doing all along: rolling up its collective sleeves and examining the budget line-by-line.

While we leave them to the work, it’s worth analyzing how we got to this point.

It’s clear that we have had an enormous amount of drama over a relatively small difference of opinion — the people who crowded City Hall to call for increases no greater than the rate of inflation probably spent more on bus fare to get there than they would save monthly if they got their wish.

With a bit of hindsight, we can also see this entire “tax revolt” was orchestrated. Certain council members, particularly Ald. Diane Col-ley-Urquhart, fanned the fear people are feeling about the global economic meltdown, using some well-worn anti-elite language completely devoid of context.

Facts like the ranking of Calgary among major cities on property tax (the lowest) or historical tax increases (below the rate of municipal inflation over time) or how much an ugly bridge would cost (maybe 15 per cent to 20 per cent less than a beautiful one) were largely ignored. This couldn’t possibly be more about someone’s mayoral aspirations in 2010 than the issue at hand, could it?

Colley-Urquhart and her allies were aided and abetted by the media. Another Calgary newspaper was almost gleeful in its rabid coverage, bringing to mind French mobs calling for the head of Bronco Antoinette. Even the august journal in your hands was not immune. On Monday, a headline screamed that city spending has more than doubled since 2001; it wasn’t until the 29th paragraph, on Page B4, that the patient reader learned that this increase is below the population growth plus inflation for that time period.

There are a lot more reasons for disgust here–aldermen claiming they didn’t realize that when they approved a project that the money would come from the budget eventually; a provincial MLA getting in on the city-bashing until informed that his own revenue and spending growth are far beyond the most profligate alderman’s craziest dreams; and a council that, in the midst of cutting frivolous spending, approves $1.6 million for a gym for its own employees, as if that’s the best way to improve employee retention (a sweaty worker is a happy worker, it seems).

However, it’s better for all of our mental health to forget about the politicians for a second and think about what we’ve learned.

First, our patterns of urban sprawl have real costs.

It may well be that the aldermen have lost all sense of proportion–how can you spend more than $2 million renovating a meeting room? –but the real reason that the city has trouble keeping its costs under control is because of the unmitigated sprawl that we built until recently.

A study in Perth, western Australia, found that a home built in a new area cost $86,000 more in government services than one built in an existing area.

This answers one mystery– how come all the new taxpayers coming to Calgary aren’t reducing the tax we all pay?

If they live in a new suburb, they are actually a net cost, not a net benefit. They will never generate enough in additional property taxes to make up the difference.

So, folks in Brentwood who have complained about both the new development around the LRT station and the increase in property taxes, you’re off the island.

Similarly, Colley-Urquhart cannot oppose both tax increases and development next to Fish Creek station. To hold both views is indefensible pandering.

Anyone who lives in Cranston or Tuscany, Taravista or Evanston, or any other brand-new suburb, you can’t complain about tax increases either. The price you paid for your house was artificially low, and all other taxpayers are paying to supply you with roads, buses, firefighters, police officers and, especially, clean water.

This isn’t to say that all city spending is sacred. The second big lesson is that everyone agrees that there is waste and inefficiency in the city. It’s just that no one knows where it is.

The system is classic bureaucracy– no rewards for under-spending, no incentives to save money.

The good news is that there are plenty of techniques to fix this–from modified zero-based budgeting to formal program review to a system where all departments are expected to budget for an initial cut rather than an increase each year.

Our city council would do us all a great favour if, coming out of this debacle, it incubated a new culture, one based on outcomes rather than protecting turf, throughout the city administration.

Naheed Nenshi teaches at Mount Royal College’s Bissett school of Business.

Bettercalgary.ca

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