Windsor’s Taxes Above Average, Analysis Finds

Frontier Centre, Local Government, Media Appearances, Uncategorized

Windsor is a high-tax, high-cost municipality and “a substantial drain” on senior government funds, according to an analysis of the financial performance of Canada’s 30 largest cities.

The report, entitled the 2007 Local Government Performance Index (LGPI), was released Tuesday by the Frontier Centre for Public Policy in Winnipeg.

It’s conclusions were dismissed by local officials, who said it drew unfair comparisons between cities.

“I write it all off,” said Mayor Eddie Francis. “It’s not accurate to compare an Ontario city to those out west. In Ontario the municipalities deliver social services. Out west, the municipal property tax base does not support social services. That one area alone should dismiss the report.”

The western-based public policy think tank said an examination of the city’s financial statements, coupled with data from Statistics Canada, shows Windsor’s taxes were 46 per cent higher than the average of all the cities in the study during 2006.

Total revenue — the amount of money the city takes in — was 65 per cent higher than the average. Expenditures were 75 per cent higher. The level of reliance on government grants was 203 per cent higher than average. All this “indicates a large appetite for public funds,” the authors conclude.

On the positive side, the report says Windsor “is in a relatively comfortable debt position, with long-term debt 28 per cent below the average” of other cities in the study, including Toronto, London, Kitchener, and major cities in the West, Quebec and the Maritimes.

Report author Larry Mitchell said his group, which describes itself as ideologically independent and non-partisan, said the information gleaned for the study was of a general nature — of the type that can be obtained by any citizen — and was not intended to provide in-depth analysis.

He said the report did not rank cities because it would be difficult to compare cities in different regions because their economies, growth and house prices can be so different. But he said Windsor would be “in the middle of the pack” in terms of its economic performance.

Compared to other cities, Windsor spends more on “niceties,” such as libraries and recreation facilities relative to the amount spent on “necessities” such as roads and sewers, he said.

Co-author David Seymour acknowledged it was difficult to compare cities without falling into an “apples and oranges and pomegranates” situation.

Francis said the city has just had its bond rating upgraded by Standards and Poors from AA- to AA because of declining debt and improving financial flexibility. The city’s long-term debt has dropped from $230 million five years ago to $154 million this year.

“Standards and Poors did a full analysis of our financial picture and upgraded our credit rating,” said the mayor. “This is the recognized and respected, best rating agency. Their reputation precedes them…. I never heard of this group (Frontier Centre) before.”

Windsor treasurer Onorio Colluci said the think tank’s report listed social services as a “nicety” when, in fact, it is mandated that it be paid for by the municipality in Ontario. “That’s flabbergasting,” said Colluci. “A comparison is only valid once you’ve established a level playing field.”

Coun. Alan Halberstadt, who had also not seen the report, said it would be wrong to dismiss it entirely.

“It doesn’t totally surprise me,” he said. “I think basically city hall has a structural problem. Our costs have built up over the years, largely because of our collective agreements,” he said, referring to contracts with the city’s unionized workers. “We’ve tinkered with it over the years with difficult budgeting sessions, going line by line. But we’re at the point where we have two choices. Get out of the some of the services we’re in or change the collective agreements.”