CNV taxes: There is more to it than you have been told

As you may have read, the mayor and council are blaming the tax increases in CNV to increase on the new Provincial Employer Health Tax, a tax brought in to replace the Medical Services Plan.

They are not entirely wrong, but it’s only part of the story they have chosen to tell us. Yes, the Employer Health Tax does have an effect on the 2019 City operating budget, but there are other factors at play as well on which our Mayor and council have chosen to remain mum, or worse, are not finically literate to understand the various factors that go into tax increases.

The City of North Vancouver property taxes are increasing by 4.25 per cent. The increase consists of a 2.25 per cent increase in the operating budget and a 2 per cent increase in infrastructure funding. The operating budget has been increasing significantly in the last few years: $1.6 million from 2016 to 2017, $2.5 million from 2017 to 2018, and $3.4 million from 2018 to 2019.

But first let’s look at the Provincial Employer Health Tax. Indeed, the City does have to pay $650,000 for this new tax but this is only 19 per cent of the $3.4 million operating budget increase. So why are City staff and Council blaming the property tax increase on the Health Tax? Probably because the provincial government is an easy scapegoat.

In fact, the $1.3 million in salary increases is the largest component (38 per cent) of the $3.4 million 2019 operating budget increase. The year over year increase has been quite alarming in my views: From 2016 to 2017, the salary increase was a mere $537,000. From 2017 to 2018, that increase was $914,000. And now we are looking at the $1.3 million number.

So what is the reason for the salary increases that impacts your tax bills? The City tells us that additional staff are required for the overall increase in development activity as well as the complexity of the work being required. But the City does not assign new staff to specific projects. Does the City have good justification for the extra staffing, or does Council determine the maximum tax increase residents will bear, and then hire staff based on the increased tax revenue?

Who questions the increase in City staffing? Certainly not the Mayor and Council. If you look at the budget debate, they are more concerned with such issues as increasing the number of park benches along Lonsdale Avenue—and of course blaming the province.  But there is nary a discussion over municipal salaries and neither is there any control over salaries that are far higher than private sector and provincial salaries.

I have also found the city’s operating expense calculation worrisome. I did a little math and found out that city has magically made the operating budget increase seem smaller than they actually are. They have done that by adding all the expected tax and non-tax revenues from new development (totalling $2.3 million) and subtracted this from the $3.4 million increase in operating expenses.

Now in the City’s calculation the increase in the operating budget is only $1.1 million. From a pure accounting perspective, this doesn’t make sense. The first rule of accounting is not to net revenues and expenses so as to present a full disclosure of finances.

 What can the tax payers do? We could insist on transparency and ensure that the city provide financial information that shows the true picture of the City’s finances, not just the preferred one. We should also insist that the City have a proper business case to increase staffing and other budget items. We can only be true stakeholders in our city’s future if if we have meaningful–and complete–information of the what is happening in the present.

Shari Lazslo is an accountant and a CNV resident