· Lion’s share of municipal property tax hikes spent on labour
· 70 cents of every new dollar of taxes went to salaries, wages, benefits
By Jordan Bateman, BC CTF. Most of the extra money collected by B.C. cities in property taxes is going to labour, according to a Canadian Taxpayers Federation (CTF) analysis of dozens of municipal annual reports posted on various city websites.
In 2013, B.C.’s 30 largest cities brought in $490 million more in property taxes than they did five years earlier. This tax revenue came through a combination of property tax rate hikes, higher property assessments, and tax base growth.
But those cities spent $345 million more on salaries, wages and benefits than they did five years earlier, meaning 70 cents of every new property tax dollar was eaten up by labour costs.
“If it feels like you’re paying more in property taxes but not getting much back in new services, you’re right,” said CTF B.C. Director Jordan Bateman. “Since 2009, B.C.’s top 30 cities spent 70 cents of every new property tax dollar on salaries, wages and benefits.”
Some cities, including Vancouver, West Kelowna, West Vancouver, Delta, and the City of North Vancouver actually spent every single nickel of higher property taxes on labour – and then dipped into other municipal revenue sources for even more.
“How many times have we heard municipal politicians cry poor and raise our taxes?” said Bateman. “Yet that money goes back out the door in labour costs just as fast as it comes in. Vancouver, for example, brought in $66 million more in property taxes in 2013 than it did in 2009. But it spent $73 million more on labour, meaning all that growth, all those tax increases, all that money sent in by Vancouver property owners went straight to city executives, managers and unions.”
This CTF analysis complements other recent work done on municipal labour costs, including this Ernst and Young study showing municipal wages have increased twice as fast as provincial government wages since 2001 and this Fraser Institute study showing 17 Metro Vancouver cities are grossly overspending the combined rates of growth and inflation.
An infographic of B.C.’s top 13 tax-and-spend-on-labour can be found HERE.
Raw data on for B.C.’s most populous 30 municipalities can be found HERE.