Here’s a little quiz to determine how well you know your city.
What would you estimate the City of Edmonton’s payroll was in 2010? If you said more than $1 billion, you would be right on the money. (No pun intended.) As indicated in the city’s annual report, the cost for salaries, wages and benefits in 2010 was $1,079,964,000.
Now a little more difficult question. What were the total revenues available to the city in 2010? If you said close to $2 billion, again you would be right on the money. Total revenues include taxes, user fees, money from Epcor, government transfers, fines and penalties and the like.
The surprising thing here is that the taxes available for municipal purposes were actually less than the cost of salaries wages and benefits. That number came in at $897,048,000. That means that all tax revenues went to paying employees, which left a shortfall of $182,916,000 to be made up from other revenues.
Now an even harder question. What was the growth rate in salaries, wages and benefits during the last five years? You might suspect they grew at a rate more than the rate of inflation and you would be right.
The rate of inflation from 2005 to 2010 was about 13 per cent. Given that number, what would you see as the likely increase: 17 per cent, 20 per cent, 25 per cent? Those would seem like reasonable numbers. However, they are all wrong. The rate of growth in salaries, wages and benefits from 2005 to 2010 was about 53 per cent. In 2005, salaries wages and benefits were $703,729,000.
Now a growth question for you. How much has the population of Edmonton grown since 2005? In 2005, the population of Edmonton was about 703,000. In 2009, it was about 782,000, an approximate increase of about 10 per cent.
If you think the city’s main purpose is to create jobs with your tax money, you should be happy as a clam.
However, if you think the city’s job is to provide the services you want and need, all these numbers will probably depress you. The city is looking at a tax increase for next year in the area of 4.5 per cent. Think of it as giving a raise to all those people who make sure our snow is cleared, our sidewalks fixed and our buses run on time.