Slow economy, unfunded liabilities pressure Vancouver 2011 budget
With taxpayers facing a two percent tax increase in this year’s budget — actually four percent after a proposed shift from business to residential taxpayers — it’s sobering to see the continuing impact of the recession on city revenues.
City licence and permit revenue, although rebounding, is still far below 2008 levels. City finance director Patrice Impey is forecasting this revenue will total about $23 million in 2011, still $5 million below what was generated in 2008.
That’s equivalent to about one percent of tax revenue. (These numbers are not evident in the report but came out during today’s budget presentation.)
A large element cash of this is generated by building permit activity, which is summarized to the end of October here. This year the city has issued about 5,200 permits of all types for total construction activity of $1.4 billion. Last year, only 4,425 permits were issued for a value of $796 million.
Contrast those numbers to 2007, when permits had totalled only 4,140 to the end of October, but the value was $2.1 billion.
A second chunk of next year’s revenue — about another $5 million — is being tucked into a reserve fund now sitting at about $31 million. This money is intended to cover the liability the city faces for the accumulated sick time and vacation time of city employees, which totals $83.9 million. If previous councils had maintained this reserve, council would have an additional $5 million to spend on services this year — equivalent to another one percent of taxes.