The government published its version of budget highlights but it overlooked many important facts. In an attempt to correct those deficiencies, here is a citizen's version of highlights from the 2004-05 budget.

• Provincial debt is $39.452 billion, $5.617 billion (16.6%) higher than it was when the BC Liberals took office.
• Revenue from income tax is projected to be $5.005 billion, $971 million lower than before the tax cuts.
• Revenue from corporate taxes is $506 million lower than before the tax cuts.
• The budget for the Ministry of Children and Family Development is $1.382 billion, $171 million lower than 2000-01 and a cut of $70 million from last year.
• The budget for Human Resources is $1.301 billion, a further cut of $117 million from last year.
• 14 Ministries are slated for budget cuts totaling $803 million.
• The forecast allowance, set at $750 million when the Liberals presented their first budget, was reduced to just $100 million - not much room for error, but errors won't be revealed until after the next election.
• $124 million was added to the bottom line by changing the method of accounting (fully including schools, universities, colleges and health authorities).
• Despite claims about more money for education, that money doesn't appear until 2006.
• People with valuable homes get a break with an increase in the threshold for clawing back the homeowner grant from $525,000 to $585,000.
• All of the income tax cuts for most middle and low income taxpayers have been clawed back with increases in regressive taxes and fees.

Endlessly repeating that the budget is balanced won't make it so; the numbers may add up differently when the Auditor General signs off in June 2005 (after the next election). The law doesn't really require that the budget be balanced; it says "The main estimates for the 2004/2005 fiscal year or for any subsequent fiscal year must not contain a forecast of a deficit for that fiscal year." In other words, the law requires that the forecast not be for a deficit, but 16 months after the budget is tabled, when the Auditor General expresses an opinion on the closed books, he could find that a deficit exists. How reliable is the "forecast" made by Finance Minister Gary Collins? Is it anything like his promise that tax cuts would pay for themselves? Is it like the promise not to sell BC Rail?

It is understandable that Collins wants to claim success even in the face of failure, but it is dangerous to confuse wishful thinking with reality. A mistake of 1% in the assumption for the growth rate of real GDP can have an impact of $300 million in provincial revenues, but it will be after the next election before the Auditor General reports on how the books close on the optimism expressed by Collins today.

The hard data show that retail trade and exports are down. The only bright spots in the BC economy are construction and two months data from the labour force survey (which is contradicted by the survey of employment, payroll and earnings (pdf)). Prior to releasing his budget, Collins was asked by Opposition House Leader Joy MacPhail about the difference between the surveys, but he got it wrong. The Labour Force Survey showed a job gain of 50,700 between November 2003 and November 2002, but the survey of employment, payroll and earnings showed a gain of just 8,584 jobs (an annual growth rate of just 0.53%). The BMO Financial Group predicted that BC's real GDP grew only 0.9% in 2003, that would mean yet another decline in real per capita GDP since population grew by more than 0.9%. Data from Statistics Canada on BC's GDP won't be available until April, but several key economic indicators are due out next week, investment intentions on February 25, and both retail trade data and the survey of employment, earnings and hours on February 26.

Collins may not have learned about misplaced optimism, but most other British Columbians had their lesson. Since making $1.5 billion in income tax cuts, and $790 million in corporate tax cuts, Collins has been increasing taxes and fees in order to recover lost revenue. Before Christmas he illegally increased tobacco taxes and also raised government's markup on beer, wine and liquor. That was a $100 million tax grab. In last year's budget he increased the gas tax by 3.5 cents per litre and thereby grabbed $211 million per year. In that budget he also had a $25 million per year increase in tobacco taxes. The previous year Collins increased MSP premiums by 50% and estimated that would bring in an additional $358 million per year. In 2002 he also increased the sales tax by an estimated $250 million per year, and yet again increased tobacco taxes by $150 million per year. The dollar figures attached to those tax grabs are directly from Collins' budget documents. Without looking at numerous smaller fees, from driver licenses to parking fees in parks and hunting and fishing licenses, the big ticket items mentioned above total $1.094 billion in increased taxes and fees. Collins' changed who pays as he clawed back over two thirds of his income tax cuts.