Local Government Organization in the Capital Region is the name of a very useful 35-page report written in 1999 by Dr. Robert L. Bish, Professor Emeritus at the University of Victoria. Bish effectively argues against amalgamation (what other places call the unicity concept, municipal reform, or consolidation movements), and show that generally, the process doesn’t save money and actually often ends up costing tax payers more. He has some interesting things to say about what scales, economically, and what doesn’t — and how this affects quality, too.

What’s so valuable about Bish is his international perspective — he’s originally from the US (California, Indiana, Washington, Maryland), taught at UVic from 1981 until the late 90s, and now, in retirement, lives in Port Townsend, WA (according to his webpage). I was particularly intrigued by another of his texts, also on his webpage, which explains funding structures in US cities (see Local Government Finance Issues in the United States, 2002).

He argues that property and business taxes are good insofar as they bond the municipal government (and its expenditures) to the residents. Any tax that becomes some sort of abstraction — where the tax payer no longer has any idea what his taxes are actually funding — contributes to what I would describe as a democracy deficit. People complain, but generally turn off, tune out, don’t care (except on some general level). Bish appears to be an advocate of a more immersive democracy, where voters care deeply about how their money is spent because (1) they know it’s their money (from their property or business taxes) and (2) they can see how the money is being spent (because it’s being spent locally, by governments they elected and whose members remain accessible to the public).

Bish also points out, of course, that US cities (particularly since the mid-90s) have many more taxation tools at their disposal than Canadian cities (which, he doesn’t say outright, are merely “creatures of the Provinces,” lacking the autonomy they deserve — which in turn also creates a democracy deficit, since we’re under tutelage to senior levels of government). Among those tools are the ones that I would advocate for, namely a direct share of both sales taxes (in Canada, that would be PST and GST) and income taxes, since both of these are linked to the economy much more closely than property taxes are.

But that’s the very reason why reliance (over-reliance?) on these is a bad idea, according to Bish. In economic good times, cities get used to having the added cash, but when there’s a bust or a recession, they’re left scrambling. Ok, I get that. But to my mind that still doesn’t mean that cities shouldn’t be able to collect some part of these taxes directly, perhaps not by municipality but by region (what in the US might be called counties, and what we have here in the form of the CRD, the Capital Regional District).

Returning to the topic of amalgamation, one of his arguments against it should be heeded by Victoria in particular. In the 1999 document cited above, Local Government Organization in the Capital Region, he points out that the City of Victoria gets around 52.5% of its property tax revenue from businesses, which is a considerably higher percentage than the other surrounding municipalities. Victoria has more businesses because it is a “core” or “central city” for the rest of the region — which is exactly the argument the city now uses when it asks other municipalities to chip in some money to help with policing the downtown — except it’s not clear what the others would get in return.

The leadership can’t seem to communicate that effectively, or, more importantly, show what we’d get. Perhaps running a city government is like writing compelling fiction, where authors take the directive “show, don’t tell” to heart.

Municipalities like Oak Bay are the first to protest loudly against amalgamation, claiming that Victoria wastes money (it does not) and is a basket case (it isn’t), and that amalgamation would therefore hurt …Oak Bay.

But it cuts both ways, as Bish points out. In fact, in his view, Victoria could well be the loser under amalgamation:

There does not appear to have been a study of the costs and benefits to the City of Victoria of its core city position, and while it is not unusual for central cities to claim that they are exploited by suburbanites who come into the city, there is yet to be a case where the city government and city businesses thought that they would be fiscally better off if the suburbanites stayed away. (p.21)

… because of course, if you’re relying so strongly on business taxes, and the suburbanites are obviously coming downtown to do business, whether it’s to shop or to eat at restaurants or to use services, you don’t want them to stay away.

Most pause-provoking, however, is this:

The impact of amalgamation on core city finances can be very important unless taxes are related to benefits in decentralized sub areas. This is because it generally costs more to provide equivalent services in spread out residential areas than in denser areas. Thus, any financing of services over the entire region will spread the central city business tax base over the entire region instead of leaving it to finance services in the core city. In fact, one of the most recent criticisms of geographically large municipalities, such as have been created in the Southwest of the United States, is specifically that the wealth of downtown business is used to subsidize the cost of residential services in outer areas, to the detriment of preserving the core area. This is something that is not happening in the capital region because each municipality must pay for its own services from its own tax base and CRD expenditures for regional activities are only a small proportion of overall property tax revenues. It is surprising that advocates of amalgamation do not seem to have been paying attention to this issue. (p.23)

That’s a pretty good argument against amalgamation, if, that is, one is talking about amalgamating all the municipalities under the CRD (some of which are quite rural). I agree with Bish here, but I wonder if things haven’t changed enough to warrant an amalgamation between the four core municipalities — if only to give all four a vote in matters pertaining to “our” downtown. As I pointed out in the previous entry, at present we’re dependent on the City of Victoria voter base for policies that affect the “core city” — that is, the core or central city for the region. If it’s a regional city, however, shouldn’t those other citizens have a voice in shaping it? Perhaps outright amalgamation isn’t the answer — after reading Bish’s report, I have a better understanding of the CRD’s role, although I don’t understand it enough to know how structures could be built that allow those councilors from those other three core communities to have more of a say in matters that affect primarily only one core municipality, namely the city.

Bish is also a great fan it seems of what he terms easy entry for new governments, by which he means that anyone with even very modest means (a few hundred dollars) can take a run at a council seat. Basically, I agree with him, but here, too, the issue cuts both ways. I attended a number of the 2005 “candidates meetings” and they were often an out and out goon show. It’s scary to see who thinks they can run for office — that “easy entry” aspect makes it …well, easy for anyone to take a crack at it.

Sure, it’s sublimely entertaining at the “meet the candidates” events, but running a city on pet peeves isn’t my idea of good government. And when you pay councilors $25,000, or the mayor $74,000 (plus expenses) for work that typically stretches into 12+ hour days, you won’t get leaders from other fields clamoring to take the job on. They’ll stay where they are, leaving this field to the Don Quixotes. That’s a gross and unfair generalization, of course, and often enough Don Quixote doesn’t get elected, and typically there are enough good candidates running to fill the seats, and we have hard-working, good people on council, …but still. In an ideal world, you’d get leaders from other, related, walks of life to take the job on — they’d have to be people whose days are 48 hours long so they could accomodate running the city as practically a volunteer commitment, while they continue to run their other affairs, too.

And that’s a work of fiction yet to be written.

Posted: 12|15|07 at 2:58 pm. Filed under: cities, taxes, victoria.

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