Text of the ‘Responsibilities for Roads’ Document

[This is the fourth in a series of posts on service costs in Local Service Districts (LSDs) in New Brunswick. I suggest reading these previous posts, which add context to the information presented below:

In 2011, the New Brunswick government moved towards reform of the system of local governance by adopting some elements of the Finn report. By gradually transferring responsibilities (and tax points) for provision of local services to Regional Service Commissions, the Province hoped to relieve itself of certain costs and also transfer decision-making for certain politically sensitive issues to the regional commissions. Financial analyses carried out by the Province in previous years indicated that property taxes collected from rural New Brunswick (in particular the unincorporated Local Service Districts) were insufficient to cover the costs of local services. This means that once local service delivery is completely transferred the Regional Service Commissions, property taxes in at least some parts of rural New Brunswick may rise, and rise considerably.

Among the documents released as part of the process of transition to the new system was one entitled ‘Responsibilities for Roads’. In brief, this document sets out an eight year transition period during which responsibilities for local road maintenance and repair would become a local responsibility. The Province would no longer fund snowplowing and maintenance of what it deemed to be local roads. Those would become the responsibility of rural municipalities, towns and villages and/or Regional Service Commissions. There would certainly be some tax implications in this transfer, especially for rural areas with falling populations and a weakening  tax base.

The ‘Responsibilities for Roads’ document was once found at this URL:

 http://www2.gnb.ca/content/dam/gnb/Departments/trans/pdf/en/Publications/Responsibilities_for_Roads.pdf .

However, it seems to have been removed or relocated.  I had previously downloaded a copy of the document and have placed the text below (and here’s a link to the downloaded pdf   –   Responsibilities_for_Roads).  I don’t know why the document has been removed – perhaps the government is no longer intent on downloading responsibilities for local roads, perhaps the issue is deemed too politically sensitive for display, or perhaps the plan is ‘under review’.

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How Much Does It Cost To Run A Local Service District (LSD)?

[Note: I suggest reading these two previous posts, found here and here, on this subject for additional background material.]

Do residents of Local Service Districts (LSDs) in New Brunswick pay too much or too little for the services they receive from governments?

That is a question that has been raised before in this Province and we will see it raised again across New Brunswick, especially now that the Province has moved forward with some of the recommendations of the Finn Report, namely the creation of the Regional Service Commissions (RSCs). The latter are charged with delivering ‘local’ and ‘provincial’ services on a regional basis. For LSDs, that means that services that have been provided to residents of LSDs by the Province (e.g. road maintenance, snowplowing, policing) are gradually being transferred to the RSCs, which have been given the task of providing those services on a cost-recovery basis.

For several decades, the Province has levied a tax rate (referred to as the ‘Special Provincial Levy’) of $0.65 per $100 of assessed value on LSD residential properties to pay for those services. Over the next few years, that $0.65 will gradually be shifted from the ‘provincial’ to the ‘local’ portion of property taxes and the RSCs will be given the task of recovering enough in tax revenue to pay for those services. Will the existing LSD tax rates provide RSCs with enough revenue to cover service costs? As the cost of a number of those services has increased significantly, LSDs that have experienced a slow rise (or decline) in the assessed value of properties may see substantial hikes in property taxes to make up any deficiency in revenue.

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Funding of Political Parties in New Brunswick

Parties need funds to both develop and promote their platforms, and then convince the electorate to vote for them. Where does the money come from?

The Political Process Financing Act (PPFA) provides for the partial funding (from tax revenues) of registered political parties in New Brunswick and also specifies how individuals, corporations and unions may also contribute funds to political parties. Provincial financing of political parties was originally based on a $1 per vote formula (indexed to inflation; e.g. the amount per vote allotted in 1981 was $1.30). However, in 1991, the formula was changed and currently allocations are capped according to amounts set in the provincial budget. A revised formula is used to calculate funds for each party (based both on the proportion of votes received in the previous election and the available budgetary allocations). These amounts are paid out in quarterly installments, but note that, while allocations are determined by fiscal year, parties report their financial information by calendar year. The Act also regulates how parties may raise other funds, from individuals, corporations, or unions. A contributor may not donate more than $6000 per year.

Charts below show trends in funding sources over a four-year period, 2009-2012. Data were obtained from annual and semi-annual financial returns (filed by parties as required under the Act) provided by Elections New Brunswick. Reimbursements for auditing costs and ‘in-kind’ contributions are not included in the charts. It is unfortunate that Elections NB does not simply place these returns on their website, preferably in a searchable format. The reports also contain lists of individuals, corporations, and unions donations to a particular party. Contributions greater than $100 are subject to public disclosure. Although the data can be obtained simply by sending an email request to Elections NB, I am not sure that the non-searchable (electronically) PDFs they supply really meet the spirit of that ‘public disclosure’ criterion.

Parties have the option of filing audited returns on an annual or semi-annual schedule (calendar year basis). Most parties file annual audited returns, but the NBLA files audited semi-annual returns. NBLA totals shown below are the annual totals of the two semi-annual reports for each calendar year.

Annual allowances from provincial revenues under the PPFA totalled $506,506 in calendar year 2009 (divided among the three parties eligible) and $654,052 in 2012 (five parties eligible).

Charts contain the following acronyms:

PCNB – Progressive Conservative Party of New Brunswick; NBLA – New Brunswick Liberal Association; NBNDP – New Brunswick New Democratic Party; GPNB – Green Party of New Brunswick; PANB – Peoples’ Alliance of New Brunswick

PPFA – Political Process Financing Act – Election Financing Manual (funds received from government budget allocations in a given calendar year via the PPFA formula); IND – Individual donors (sum of donations of <$100 and >$100); CORP – Corporate donors; UNION – Union donors

The charts show contributions from each source category by calendar year and party. By hovering your mouse over each section of the bar, you can see the dollar amount (rounded to nearest dollar) for each source for that party and year.
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Service Costs in New Brunswick Local Service Districts (LSDs) – Text of the Comptroller’s Report May 2008

The Finn Report (also known as Building Stronger Local Governments and Regions: An Action Plan for the Future of Local Governance in New Brunswick) was released in December 2008 and contained a number of recommendations regarding local governance in New Brunswick. The Report was produced by the Local Governance Commission that had been established in September 2007 by Premier Bernard Lord and was headed up by Jean-Guy Finn. The Graham administration (which held office when the Report was released) failed to act on the Report but a number of those recommendations were eventually adopted by the Alward government in 2011.

With respect to Local Service Districts (LSDs), the Finn Report relied heavily on the findings of the 2008 Review of Local Service District costs carried out by the Office of the Comptroller (Review of Provincially Provided Services in Local Service Districts May 2008). The main finding in the Comptroller’s Report (which was actually an update of a similar report done in 2002) was that the costs of services supplied to LSDs by the Province were significantly greater than revenues available from property taxes collected from LSD residents and businesses. That is, the analysis suggests strongly that the Province is funding service delivery in LSDs by using other revenue sources  available to it (e.g., income tax revenue, or property tax revenue from non-LSD residents), as well as property tax revenue collected in LSDs.

The reforms put in place in 2011 will result in transfer of various service delivery responsibilities from the Province to Regional Service Commissions and/or local municipalities. In other words, many (if not all) of the ‘Provincial’ services delivered to LSDs and rural communities will, over time, become ‘local’ services rather than the responsibility of the Province. It is hard not to conclude that a motivation for these reforms was a desire on the part of the Province to see that these ‘local’ service costs were paid for by local property taxes, rather than income and other tax revenues. The Comptroller’s Report is thus important, as calculations in the Report appear to support the idea that property taxes are not covering the costs of service delivery in LSDs. A major source of the shortfall in revenue appears to result from the fact that the $0.65 assessment (per $100 of property value) for provincially-supplied services has not increased for several decades.

The Comptroller’s Report is not available directly from the Government of New Brunswick website. I obtained a copy and have converted it into a web document, as shown below. This involved stripping away much of the formatting of the original report, but some re-formatting has been done to add clarity. I believe the text and data have been reproduced accurately, but, if any errors are found, please advise me.

[Note – this is the second post on LSD service costs and governance. I suggest reading the first post in this series prior to this one. Additional posts on this topic will follow.]

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