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chemgear · 11-01-2018, 09:24 AM

https://www.cbc.ca/news/canada/calga...heck-1.4886988

The bid corporation touts gains of $4.4 billion for the city, $1 billion in wages, over 15,000 jobs, and a 10-to-1 return for city funds invested. It's one of the main talking points of the Yes campaign and of the bid corporation.

But they're mistaken. Demonstrably so.

First, the broader employment and GDP gains are based on questionable economic models that few economists take seriously.

A particularly bold claim by the bid corp. is that Calgary will receive back $10 for each $1 the city puts in.

This is creative accounting.

It counts as "money coming back to Calgary" such things as: spending on soldiers, police, and so on. It counts spending by Calgarians themselves on such things as Olympic tickets and merchandise — money that would likely have been spent on other things anyway. It also counts spending on compensation for Olympic staff that aren't Calgarians. And it counts imported materials, equipment, and so on.

The city raises just over half its property taxes from businesses, and just under half from homeowners. Split between the two, the $390-million cost is equivalent to more than $350 per residential property in the city and nearly $15,000 per non-residential property (i.e., business).

We don't know how the city plans to fund this, but let's presume it simply takes out more debt. This means future interest costs and repayments that would require something around a 1.3 per cent increase in annual property taxes, or $25 annually for the median home owner, but significantly more for the typical business. (This is napkin math, but gives a good sense of scale.)

The city is already challenged by rising property tax bills on businesses in the city, as downtown vacancy rates are high. Without higher bills for residential property owners, business have made up much of the slack. The Olympics may make this challenge even more difficult.

Given such constraints, finding money for Olympic infrastructure means taking it away from somewhere else. It's fair enough to prioritize the Games above other projects, but we must recognize that is the choice before us. This is true even if the government borrows more to cover the costs — the trade-off is merely pushed into the future.

Public funds have alternative uses. It's a difficult reality. But it's a reality nonetheless.

11-01-2018, 09:24 AM	#1775
chemgear Franchise Player Join Date: Feb 2010 Exp:	https://www.cbc.ca/news/canada/calga...heck-1.4886988 The bid corporation touts gains of $4.4 billion for the city, $1 billion in wages, over 15,000 jobs, and a 10-to-1 return for city funds invested. It's one of the main talking points of the Yes campaign and of the bid corporation. But they're mistaken. Demonstrably so. First, the broader employment and GDP gains are based on questionable economic models that few economists take seriously. A particularly bold claim by the bid corp. is that Calgary will receive back $10 for each $1 the city puts in. This is creative accounting. It counts as "money coming back to Calgary" such things as: spending on soldiers, police, and so on. It counts spending by Calgarians themselves on such things as Olympic tickets and merchandise — money that would likely have been spent on other things anyway. It also counts spending on compensation for Olympic staff that aren't Calgarians. And it counts imported materials, equipment, and so on. The city raises just over half its property taxes from businesses, and just under half from homeowners. Split between the two, the $390-million cost is equivalent to more than $350 per residential property in the city and nearly $15,000 per non-residential property (i.e., business). We don't know how the city plans to fund this, but let's presume it simply takes out more debt. This means future interest costs and repayments that would require something around a 1.3 per cent increase in annual property taxes, or $25 annually for the median home owner, but significantly more for the typical business. (This is napkin math, but gives a good sense of scale.) The city is already challenged by rising property tax bills on businesses in the city, as downtown vacancy rates are high. Without higher bills for residential property owners, business have made up much of the slack. The Olympics may make this challenge even more difficult. Given such constraints, finding money for Olympic infrastructure means taking it away from somewhere else. It's fair enough to prioritize the Games above other projects, but we must recognize that is the choice before us. This is true even if the government borrows more to cover the costs — the trade-off is merely pushed into the future. Public funds have alternative uses. It's a difficult reality. But it's a reality nonetheless.