Wednesday August 20, 2014

Focus should be on inefficiency


Premier Brad Wall mused recently about raising “education” property taxes and using the money to fix roads and build bridges.

While it’s inappropriate to tell the public you’re taxing them to fund K-12 “education” and then turn around and use the money for something else, it’s also unnecessary. There’s still plenty of inefficient spending in government that should be rooted out before ever considering raising taxes.

Instead of taking the easy way out and jacking taxes, Premier Brad Wall, and his government, need to do two things.

First, the Wall government should keep going after inefficient spending by: pursuing a number of options; eliminating unnecessary programs, partnering with the private sector to save money, delaying unnecessary spending and scaling back pay and benefits for public sector employees. Once they implement these savings, those dollars could be used to help pay for infrastructure needs.

In the past, the Canadian Taxpayers Federation, a donation-based taxpayers’ watchdog organization, has praised the Wall government for taking advantage of such opportunities. For example, hospitals in Saskatchewan formed a partnership with a private company to clean linens in hospitals. The partnership is expected to save taxpayers over $93 million over the next decade.

Talk about great news, more of those partnerships need to be pursued. Think of all the government services that could potentially be performed by private businesses; payroll services, park management, highway pothole repair and dozens of others.

The Wall government should develop a list of services that could be tendered and then encourage not just businesses, but existing employees to bid for such services. The City of Indianapolis did this in the 1990s and saved its taxpayers millions of dollars.

The savings came not only from hiring businesses, but getting existing employees to put in bids that were based on cutting management fat and other inefficient spending. Frontline employees had known what needed to be cut for decades but never had any incentive to do anything about until their jobs were on the line.

The Wall government should also take action on things like government employee pension plans. Instead of ducking the issue and letting the matter get worse and worse, the government should stop the bleeding. For example, instead of continuing to let new judges join a really expensive (for the taxpayer to fund) pension plan, new judges should be put in a less costly plan.

To illustrate how this is a big problem, consider that the shortfall in the judges’ pension plan in Saskatchewan grew from $89 million in 2010 to $135 million in 2013.

The same problem doesn’t exist for provincial politicians or those who work for departments and crown corporations as the provincial government (under the NDP) started putting those employees in less costly plans back in the late 1970s. Surely Premier Wall has the courage to finish the job off and move judges, hospital workers and others into less costly pension plans?

The Wall government also deserves credit for downsizing the bureaucracy by over 1,900 positions over the past few years. No doubt it wasn’t easy, but consider that things seem to be operating just fine without those extra 1,900 positions.

That brings us to the second thing the Wall government needs to do; demand the same type of reform by municipalities, school boards and health regions. They too should be looking under every stone for savings, scaling back benefits and cutting unnecessary positions.

Gone should be the days of municipalities, health regions and school boards simply begging for more money. Everyone knows there’s fat to cut there too.

One thing is clear, if Premier Wall and other organizations continue to look for savings, they can find them and there will be no need to penalize everyone with higher education property taxes.

Colin Craig is the Prairie Director for the Canadian Taxpayers Federation



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