Strategic Thoughts

bannerspacerAbout Me | Mail Me | My Stuffbannerspacer2

February 20, 2004

Budget Distortions - Not exactly Lies
($203 million tax grab)

The Campbell Liberals are using tricky words that can mislead the public without going so far as to actually lie. Last year they said that they put money back into the Ministry of Children and Family Development. The truth is that they cut $135.4 million in fiscal year 2003-04 and the current budget calls for an additional cut of $70.6 million. Their claim of putting money back into the budget is based on cutting "just" $70.6 million rather than $191.0 as previously planned. That is like saying you should feel good because only one of your limbs is ripped off instead of all of them. $70.6 million will be cut from services to developmentally disadvantaged adults and from child protection.

The Campbell gang is at it again when they say that they put $80 million more into the welfare budget. The truth is that they cut $253.5 million in fiscal year 2003-04 and the current budget calls for an additional cut of $116.9 million. Their claim of putting money back into the budget is based on cutting less than originally planned, but there will be less for the needy, not more.

One of the worst examples of tricky wording came from Premier Campbell when in response to information that budget documents show families worse off under his government; he said "they have more in their pay cheques". Reducing income taxes may have increased pay cheques, but higher gas taxes, higher MSP premiums, a higher sales tax, higher school taxes and higher fees for dozens of services means that families have less money for groceries.

An appendix in the budget compares the taxes paid by several "typical" families in different provinces and it is possible to compare those appendices from year to year. Last year, the appendix estimated that a typical two income family of four earning $30,000 would have a total tax bill of $5,371 (including provincial income tax, subtracting child benefits, adding property tax, subtracting the homeowner grant, and adding sales tax, fuel tax, MSP premiums, federal income tax and GST). This year the appendix said that same family had a total tax bill of $5,553. Finance Minister Gary Collins attempted to pass the buck to the municipalities when, on CFAX's Joe Easingwood show, he said that the increase was the fault of the municipalities because they increased property taxes. He's wrong (again). Collins would have you forget that the province sets the property tax rate for rural areas and for schools. On March 4, 2002, the Ministry of Revenue announced a 2% increase in the tax rate for both rural property tax and school property tax; this year a 2.1% increase in the school property tax rate was announced (whispered on page 87); that is on top of the increased take the province receives from inflated property values. Property tax is a line item in Collins' budget. It estimates that the province will receive $1.655 billion in property tax revenue in 2004-05; that is $203 million (14%) more than it received in fiscal year 2000-01. Maybe Collins should apologize to the municipalities for blaming them for his tax shift. Last year his budget document admitted to $96 million in increased average gross residential school property taxes because of inflation over just two years ($34 million in 2003-04, and $62 million in 2004-05 before the newly announced rate increase).

It is possible to go through dozens of examples of "typical" families but every family is different. The appendix to the budget does not include higher drug costs, tuition fees, license fees, parking fees, eye glass exams, the Hydro rate increase or dozens of other items that affect each family differently. The hard fact is that the lower and middle income families have been hurt as the Campbell government heaped taxes and fees on them in order to pay for the really big income tax cuts given to the six figure set. No matter how they play with tricky words, families who are paying more know that they have less in the New Era.

 

About Me | Mail Me | Navigation | Top
© 2004 David D. Schreck. All Rights Reserved.