We need a better budget process

Opinion

Hey there, time traveller!
This article was published 28/01/2025 (234 days ago), so information in it may no longer be current.

Brandonites can feel a sense of relief that their city council has arrived at a draft 2025 budget that includes a lower property tax increase than many expected. They have ample reason, however, to question the process used to ultimately arrive at that lower-than-anticipated increase.

As was reported yesterday, multi-hour council deliberations on Friday and Saturday resulted in our mayor and city councillors approving a draft budget that includes a 6.9 per cent hike in property tax rates for the current year. That is substantially lower than the 11.7 per cent increase that was originally called for in the proposed budget prepared by city administration.

In order to arrive at that lower tax increase, council did not engage in the ritual of drastic cuts and raiding of reserves that we have seen in past years. Rather, the reduced rate was achieved in part by allocating approximately $900,000 in unspent surplus funds from the 2024 budget toward this year’s budget. That alone accounts for almost two percentage points of the reduced rate.

Beyond that, the Manitoba government’s announcement that it is paying the entire $1-million cost of repairs at the Western Manitoba Centennial Auditorium saved the city another $500,000. That amounts to another (approximately) one per cent reduction in the tax increase.

Finally, a correction to the expected operations budget for the new Maple Leaf Soccer Complex — it was $250,000 too high for the year — allowed for the tax increase to be further reduced by approximately 0.5 per cent.

Those savings alone reduce the originally projected 11.7 per cent increase to 8.2 per cent. Other savings, which include cutting $450,000 that was originally budgeted to pay for a Brandon Police Service psychologist ($150,000) and begin paying for a second BPS building ($300,000), pushed the increase further down to the final 6.9 per cent number.

Many Brandon home and business owners are no doubt happy that the tax increase is much lower than originally projected, but they should also be asking three important questions. First, this is the second consecutive year that the property tax increase is lower than the increase called for in the MNP report. That report laid out a decade-long path toward financial stability for the city, funded largely through hefty annual tax increases.

Has council abandoned MNP’s recommendations, or have they punted some costly financial challenges down the road for a future city council to grapple with, in the form of even larger tax increases?

Second, why is it that a significant portion of the savings were only discovered during council’s budget deliberations last weekend, and not several weeks ago? Were our mayor, council and city administration all unaware until sometime on Friday as to how large the 2024 surplus really was?

The same goes for the projected operations costs for the soccer field. Did nobody notice until last weekend that the projected numbers were way too high, and did not reflect the fact the field won’t open before July at the earliest?

Third and most importantly, is a two-day budget deliberations process, just before the budget deadline, really the best way for our city council to arrive at an annual budget for a city the size of Brandon? Is such a marathon process, under pressure-cooker conditions, really conducive to make good budgeting decisions?

The key to a good outcome — for example, a budget that meets the city’s needs at an affordable cost to taxpayers — is a good process. This past weekend’s budget-making process exposes a number of serious flaws that may be preventing council from consistently making the best decisions.

Those defects include the fact that important information was discovered and/or disclosed to councillors far too late in the budgeting process. The late disclosure of that information prevented councillors from giving it careful consideration prior to deliberations beginning, and prevented the public from providing any input.

Beyond that, there is no dispute that tired people do not make good decisions when under serious time pressure, especially when important new information continues to materialize throughout the process.

It is tempting to look at this year’s budget and believe that all’s well that ends well. The reality is, however, that an 11.7 per cent proposed tax increase would have never been on the table if our city council and administration had all the information they needed prior to last weekend’s deliberations.

We would have been looking at a far lower tax increase. A lot of public anxiety and bad publicity would have been avoided.

Brandon needs a better budget process. Our mayor and council would be wise to begin designing that process well in advance of next year’s budget deliberations.