O'Brien's plan for freezing taxes
By Randall Denley, The Ottawa Citizen September 10, 2010 2:44 PM
OTTAWA — The last time he ran for mayor, Larry O’Brien had a firm promise to freeze taxes and no real plan. This time, he has a more realistic promise and a plan that could work, if voters and councillors have the stomach for it.
In an eight-point plan to be released Saturday, O’Brien proposes a series of tough actions that could plausibly freeze your taxes, although the O’Brien plan will certainly cut services as well. The key elements are a two-year freeze on the city’s overall wage spending, freezing departmental budgets, freezing the taxpayer subsidy for OC Transpo and a “value for money” review of all city services.
O’Brien is further promising to use the dividends from the tough new approach for spending on “city-building projects.” The message is that O’Brien wants to restrain the cost of the city’s mundane services so we can afford to spend on city-enhancing initiatives like Lansdowne revitalization and light rail.
O’Brien is vowing to personally propose a tax-freeze budget, every year. That would replace the staff- and councillor-driven budget proposals of the past and it’s an appropriate responsibility for a mayor. Obviously wiser after a term in which zero really meant 14 per cent, O’Brien is not guaranteeing that council will accept a tax freeze. He is promising to lead the way toward that goal.
The key to O’Brien’s plan is freezing the city’s $1.26 billion wage budget. O’Brien is not intending, as was previously reported, to freeze workers’ pay. He will negotiate toward that goal, but it’s not something a candidate can guarantee.
The important point, O’Brien says, is that a tax freeze and a freeze in overall wage spending will give the city some leverage in union negotiations. Advertising a willingness to increase taxes 2.5 per cent, as opponent Jim Watson has, pretty much guarantees pay increases of that size for city employees, O’Brien argues. He says, “two and a half per cent is a very union-friendly number to pick.”
The mayor says he doesn’t want to freeze taxes simply for the sake of it, but to “drive change.” Faced with the prospect of job reductions, O’Brien hopes that the city unions will be more flexible on wages and working conditions.
Freezing the overall amount spent on compensation achieves the same bottom-line goal as a wage freeze, but it implies staff cuts. That will almost certainly mean service cuts, too.
The biggest squeeze would be on OC Transpo. O’Brien wants to hold the taxpayer subsidy at $175 million. That won’t keep costs from going up. What it would mean is less bus service, higher fares, or both.
Bus riders won’t like the consequences of O’Brien’s plan but it draws attention to a fact that city councillors have chosen to ignore. OC Transpo management is predicting that service expansion and wage costs will drive city taxes up 1.5 to two per cent a year, just for OC Transpo alone. O’Brien wants to hit the brakes.
Even with an overall wage freeze, achieving the target of zero won’t be automatic. Costs for police, fire and ambulance service go up every year. O’Brien has vowed to make those services a priority, so the implication of his plan is that city spending on other services will actually decline.
Perhaps the best part of O’Brien’s plan is his determination to smoke out city council candidates on their own budget plans. He has lined up a separate group to poll all the people running for council on whether they will support his tax-freeze plan. That will make it tougher for candidates to engage in the dodging and weaving they love so much.
Jim Watson clearly wants to make this an election about taxes and O’Brien’s failure to freeze them. Not that Watson could freeze them either, but that’s another story.
Having overpromised and underperformed, it will be difficult for O’Brien to regain credibility on taxes but he has to do it to have a hope of re-election. O’Brien needs to persuade the public that when it comes to taxes, he’s still 120 proof and Jim Watson’s just a spritzer.
The plan the mayor will unveil Saturday ought to achieve that goal. This time, O’Brien has identified plausible ways to freeze taxes and he can certainly produce a budget that will achieve that goal. Whether the details will be palatable to council or the public is another matter. People like to believe that taxes can be frozen without cutting services. That’s just not the case. O’Brien knows that, now, and his new goal is to be the guy who tries hardest to get to a low number. Realistically, that’s the best anyone can do.
Contact Randall Denley at 596-3756 or by e-mail,
[email protected]
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