Thread by @AaronGenest

Today is the #yxe election, again, so I'm going to talk about one of my favourite subjects: taxes.

In particular, "why are my taxes going up every year faster than inflation in Saskatoon?"

The short answer? Because your parents made poor decisions.

The long answer is a bit harder. We're suffering from an infrastructure debt common to many cities our size and age that's the result of rapid growth in the 50's-70's, a false assumption that low taxes increased competitiveness, poor density planning up until the last decade,

and a massive shift in infrastructural load (because of population movement) from rural districts to urban districts.

Let's look at each of those in turn.

1. Rapid growth in 50s, 60s, and 70s mean that there are a lot of neighbourhoods in Saskatoon that are now reaching the age where expensive infrastructure needs to be replaced. This is new: most infrastructure has a 40-70 year timeline and we don't have a lot of streets older.

So suddenly, Haultain, Holliston, Meadowgreen, Caswell, Mayfair, City Park, Greystone Heights... they all need major work: sidewalks, sewers, water mains, drainage, roadways... almost every neighbourhood within Circle Drive has major infrastructure needs that are outstanding.

Which brings us to (2) tax rates. I called it a false assumption that tax rates influence migration and we can argue over that all day, but let me ask you this: when was the last time you moved because taxes were lower somewhere else? Moving is very, very expensive.

And it's hard to move: you need a job, to find schools, the willingness to change social circles, etc. So basically, high taxes don't generally influence urban-urban migration unless, and this is critical, unless you have lots of bedroom communities with lower taxes.

People with money _do_ tend to move to the edges of a municipality if they can still access the municipal services. This migration _does_ happen today and in the last decade or two in Saskatoon, but it did NOT happen significantly in the 20th century.

However, our municipal taxation policy was predicated on that, since it's the model that Calgary, Winnipeg, and other large cities around us were using. So we had low taxes (& low business taxes) compared to other municipalities to manage a problem that didn't really exist here.

When you combine (1) and (2), it means that you're unable to afford to do upkeep on existing neighbourhoods: you're just not making enough money.

Which brings us to (3). One way to make more money for a city is to sell land. So we did. For a half-century, yxe sold lots of land.

All on the edge of town. This effectively punted the problem downstream: the tax revenue was still insufficient to fund infrastructure and services in older neighbourhoods and now we were adding new ones in a ponzi scheme to hide our ongoing deficit.

Then, to add to this problem, we had (3) a massive shift in population. @nenshi once told me that in the last 100 years the ratio of economic output of rural:urban moved from 80:20 to 20:80. Most of that happened because people moved to cities.

When a large portion of your population lives rurally, the problems of managing the society are distributed more evenly and, critically, provincial governments have more of a mandate to help. Provincial governments raise taxes via income tax for precisely this reason.

It also means that when you build economically in a province, you get more taxes. Cities don't have this model. When #yeg attracted new tech companies by advertising their downtown bike lanes (yes, companies moved from other countries because of this), it cost the city...

But the city didn't actually make more money from the high paying jobs that went with that. They might as well have attracted ditch-digging jobs... it would have almost the same economic impact on city finances. The province, however, made lots more money in taxes.

So when the economic engine moves to cities along with the population, but cities don't benefit from the increased economic activity and get the additional load of population and needs, the system starts breaking.

This last point is kind of subtle, but important.

Cities aren't incentivized to grow in quality. Their taxation model is a ponzi scheme based on growing in population. Any improvements in quality come because city leaders believe it's _right_, even though it's going to make their funding situation even more untenable.

So why are your taxes going up?

To pay for things your parents should have paid for; to pay for poor decisions about growth; and to pay for a broken Provincial/Municipal taxation and funds transfer system.

Also, that's why you don't have every residential street cleared of snow 5 times a year: you get _precisely_ what you pay for.

#justsaying #yxevotes #yxecc