Every year in late November and early December there is much wailing and gnashing of teeth over the “property tax increase” in the City budget. As I wrote in a letter to the editor, if the proposed “increase” is anything less than the inflation the City faces plus population growth then you effectively have a tax decrease.
As I’ve been digging through the City’s website, annual reports and financial statements my main focus has been trying to collect useful data with respect to Saskatoon Transit, as you may have noticed from some of my other posts.
I have also managed to collect property tax increases, population growth figures and the like and have noticed a predictable, but potentially troubling trend.
Not unsurprisingly property tax “increases” have not kept pace with inflation plus growth. I’ve used the Consumer Price Index (CPI) above only because that’s what was available in the City’s annual reports.
To their credit, the City has recently started to calculate a Municipal Price Index (MPI), as many other cities do, since the Consumer Price Index is a poor reflection of the kind of inflation faced by a municipality. A great many of the items in the CPI “basket” of good are things that relevant to the average consumer, but have little bearing on a municipality. Few municipalities purchase groceries, kids clothing or consumer electronics. Few consumers purchase large quantities of asphalt, concrete, or diesel fuel. Expecting a municipality to face a similar inflation to that of the average consumer is intellectually dishonest.
The real concern here though is the trend. Not only are property tax “increases” not keeping pace with inflation plus growth, the spread is widening. Effectively property taxes are decreasing. Which could be a good thing, or it means more of the same crumbling roads, inadequate snow clearing, and what passes for public transit.