CFIB Report - Municipal Spending Out Of Control

The Canadian Federation of Independent Business released a report this week that slams local governments for out of control spending. The CFIB uses a very simplistic formula that compares the increase in municipal spending between 2000 and 2008 with population and inflation growth over the same period and suggests that municipal spending increases should not exceed the population/inflationary increase.

The report ranks the City of Williams Lake as having the 4th highest per capita spending of the 25 BC municipalities with populations between 10,000 and 15,000 with $1656/capita. The report also shows an increase in operating expenditures of 43% in the 8 previous eight years compared to an 11% increase in population and inflation, concluding that there was excess spending in 2008 of $4.1 million.

The obvious problem with the CFIB report is that it only considers expenditures and does not factor in new or increased revenues that off-set increased expenditures. Some examples of new or increased revenues during this 8 year period include Gaming revenue, traffic fine revenue and Provincial grants for non-capital programs to name a few.

In addition, the report does not acknowledge the fact that many increases in operating expenditures are beyond the control of the municipal government. Some examples include policing costs (RCMP), regional solid waste (CRD) or the costs of complying with new or enhanced regulations.

The CFIB report suggests that if the City of Williams Lake had maintained operational expenditures in line with population and inflationary increases, expenditures in 2008 should have been $4.1 million less than they actually were. There is no disputing that operating expenses have increased substantially in the past eight years. However, to reduce the municipality's operating expenses by $4.1 million would result in profound impacts to services provided by the municipality. The City provides cores municipal services to its residents, very few of which are discretionary. For example, RCMP and fire protection alone cost a total of $4 million annually. Water and sewer services are essential, roads must be maintained, garbage must be picked up, our airport and transit provide mobility and parks, recreation and culture add to quality of life. To reduce or eliminate any of these, or other services the City provides I would argue would not bve acceptable to our residents.

The CFIB report does bring to light the fact that municipal spending has increased over the past eight years. However, far more analysis of revenues, local priorities, service demands and historic spending decisions are required in order to determine that a particular municipality's spending is "excessive".