Problem 1: Inequality in Who Pays For Infrastructure and Services

As mentioned before, we are one big community who all use services offered by all the municipalities in our area.  Residents from Hythe use the Beaverlodge pool beside Beaverlodge residents, County residents from Clairmont quad in the Dunes area along with City residents.  When I install siding in Sexsmith, I use all of Sexsmith's streets to get around; farmers from LaGlace use City streets to pick up supplies...the list goes on.

If everyone in the area gets to regularly use the infrastructure and services on an equal basis, shouldn't everyone also equally contribute towards the costs as well?

Unfortunately this is not the case right now.

There are a number of ways that we can analyze who is paying what costs.  The first way is to look at how much the municipalities are paying for the cost of delivering services in the area.  Between 2009 and 2012, $789 million was spent on municipal services in the GP region.  Here's how it was broken down:

Municipality	Total Expenses	% of Regional Expenses	% of Population
City of GP	$515,621,098	65.4%	66.8%
County of GP	$227,081,101	28.8%	24.7%
Town of Beaverlodge	$18,835,413	2.4%	2.9%
Town of Sexsmith	$14,923,435	1.9%	2.9%
Town of Wembley	$7,007,001	0.9%	1.7%
Village of Hythe	$5,121,503	0.6%	1.0%

As we can see, each municipality is paying a share of municipal services that is roughly equivalent to their population share, although the County does pay a slightly larger piece.  While in some spending areas, some municipalities pay more, it generally balances out overall.  For example, the City covers around 82% of the region's Recreation & Culture costs, but this is offset by the County who pick up about 37% of the region's Transportation costs.

Great! What's the issue then?

The issue arises when we look at how much each residential taxpayer is paying based on which municipality they live in:

Municipality	Residential Taxes Paid	Average Res. Tax per Dwelling	% of Regional Residential Taxes	% of Population
City of GP	$63,772,526	$2,702	75.30%	66.80%
County of GP	$15,674,556	$1,854	18.50%	24.70%
Town of Beaverlodge	$1,832,191	$1,868	2.20%	2.90%
Town of Sexsmith	$1,799,160	$2,004	2.10%	2.90%
Town of Wembley	$901,989	$1,572	1.10%	1.70%
Village of Hythe	$699,000	$2,118	0.80%	1.00%

*See note on calculations at bottom of post

Here we see that City residents are paying a much greater share of all the residential taxes that are collected in the area.  In fact, the average dwelling in the City paid $2,702 in taxes in 2012 compared to an average of $1,854 in the County...an $850 difference.

But Rory, this doesn't make any sense.  If the municipalities are paying an equal share, but residents aren't, what's the deal?

Good question.  Here are the answers:

1. Some municipalities have additional revenue streams that help keep their residential taxes low. 

2. Some municipalities have the provincial government pick up the tab for a number of their services.

Let's look at each:

1. Revenues

In Alberta, there are two main sources of property tax that the provincial government assesses and collects: Linear assessment and Machinery & Equipment (M&E)

Linear assessment includes things like pipelines, oil & gas wells, electrical transmission lines, and telecommunication towers. M&E is the assessment class that includes industrial complexes like the Weyerhaeuser and Canfor mills and large equipment like compressors and storage tanks.  Municipalities get "rent" essentially for having all this within their jurisdiction.

So who gets this money?  Let's take a look at 2012 numbers:

Municipality	Linear Revenues	Linear Revenue per capita	Share of Regional Linear Revenues	% of Population
City of GP	$1,876,031	$34	7%	67%
County of GP	$23,565,319	$1,158	92%	25%
Town of Beaverlodge	$75,200	$32	0.30%	2.90%
Town of Sexsmith	$140,971	$58	0.50%	2.90%
Town of Wembley	$21,738	$16	0.10%	1.70%
Village of Hythe	$0	$0	0%	1.00%

Municipality	M&E Revenues	M&E Revenues Per Capita	Share of Regional M&E Revenues	% of Population
City of GP	$670,662	$12	5%	67%
County of GP	$12,450,744	$612	94%	25%
Town of Beaverlodge	$9,126	$4	0.10%	2.90%
Town of Sexsmith	$45,911	$19	0.30%	2.90%
Town of Wembley	$1,599	$1	0%	1.70%
Village of Hythe	$0	$0	0%	1.00%

Municipality	M&E/Linear Revenues Combined	M&E/Linear Revenues Per Capita	Share of Regional M&E/Linear Revenues	% of Population
City of GP	$2,546,693	$46	7%	67%
County of GP	$36,016,063	$1,770	93%	25%
Town of Beaverlodge	$84,326	$36	0.20%	2.90%
Town of Sexsmith	$186,882	$77	0.50%	2.90%
Town of Wembley	$23,337	$17	0.10%	1.70%
Village of Hythe	$0	$0	0%	1.00%

I don't really need to provide much commentary here.  The inequality is quite mind blowing.

In addition to the Linear and M&E, municipalities receive grants from the provincial government.  Again we see some major inequalities in how the grants have been dolled out between 2009 and 2012:

Municipality	Provincial Grants Total	Provincial Grants Per Capita	Share of Regional Provincial Grants	% of Population
City of GP	$104,377,975	$1,897	61%	67%
County of GP	$53,473,296	$2,628	31%	25%
Town of Beaverlodge	$3,697,644	$1,563	2.10%	2.90%
Town of Sexsmith	$6,068,235	$2,510	3.50%	2.90%

Is it fair that one municipality receives nearly a third of the provincial grants while having one quarter of the population?

As we can see, there are some major inequalities that exist on the revenue side, leading to a greater residential tax burden for urban taxpayers.

2. Expenses

We also need to look at the expense side where inequalities also exist.  The biggest inequality right now is in regards to policing.

In Alberta, municipalities under 5000 people and all MDs and Counties are not required to pay for policing; the expense is paid for by the Province.  In contrast, the City paid $13.6 million for policing in 2013.

In other words, the City spent about $250 on policing for every person living in the City, while our neighbours were required to spend almost nothing (I say "almost" because the County does pay for 3 RCMP officers to enhance what is given to them).

To conclude, there are some major inequalities that exist in who pays for municipal services in the region.  Now, I do realize that this whole issue is not as cut and dry as I've laid it out.  For example, grants that come to one municipality do benefit others.  Although the County received the grant for the Dinosaur museum, the City and Towns will benefit from increased tourism in the area. 

Also, I recognize that to support the pipelines and industrial complexes, the County does have a little extra burden on its transportation infrastructure.  However, objective evidence has shown that the extra revenues many rural municipalities receive far exceeds the additional infrastructure costs.  So while I don't think the goal should be perfect equality, the scales are heavily tipped in the rural municipalities' direction and changes are needed.  I look forward to sharing what those changes could be.

 Next post ----> Problem 2: Poor Regional Planning

*I've included all the residential property taxes that are paid in the given year for simplicity sake.  If you look at just the portion that goes to the municipalities and not the province, you find City residents are actually paying 79% of residential taxes vs. 15% in the County.  This goes to show that there are inequalities in who is paying for the education and seniors lodging portion of our property taxes as well.  This can be another discussion for another day though...