Alberta budget news

[Dion]

Why increasing Alberta’s taxes is such a dumb idea

The need for new schools and hospitals could more easily be serviced if the province was prudent on program spending (and thus created room for capital expenses).

For example, program expenditures are the largest portion of the provincial budget. In the 2011-12 fiscal year, the province spent $45.1 billion (program, capital and interest payments combined). Of that, one per cent was spent on debt interest, with 13 per cent for capital expenditures; fully 86 per cent went to programs.

More capital spending could be afforded with current tax levels if the government didn’t continually overspend on the operating side of things.

To illustrate, imagine, if over the past five years, the province awarded inflation-only raises to teachers instead of raises that were double the rate of inflation. Or on the corporate side, imagine if the government choose not to subsidize carbon capture to the tune of $682 million between 2011 and 2015. Money would have been freed up for infrastructure.

But such moderation has not been a hallmark of Alberta’s government for some time. After accounting for inflation and population growth, per capita program spending rose to $10,526 in this current budget year. That’s up almost 10 per cent from 2005 levels ($9,594 per person).

Those who seek higher and new taxes might recall this basic truth about human beings: People do not naturally flock to a place where the temperature can plunge to -30 C, or where it can snow in June. People come to Alberta, historically, because it provides opportunities.

If Alberta’s overall tax burden shifts to the level of British Columbia or Ontario (where four seasons exist), the province might find itself in a nasty pickle: Less economic activity and less revenue than expected, but higher taxes — and an irritated population.

'

http://www.calgaryherald.com/opinion...933/story.html

[3 Justin 3]

Am I totally out to lunch or is Alison Redford a rubbish Premier?

[Slava]

Originally Posted by transplant99

Since you dont "defend the PC's"....you tell us.

Which scenario is better?

Considering both promised a balanced budget less than a year ago, I would say its equally as pathetIc.

[Dion]

Originally Posted by Slava

Considering both promised a balanced budget less than a year ago, I would say its equally as pathetIc.

I don't know about that

Leader Danielle Smith says cabinet salaries will be reduced 30 per cent, wiping out the hike the Progressive Conservative cabinet gave itself after the 2008 election.'

http://www.thestar.com/news/canada/2...all_bills.html

[GP_Matt]

Originally Posted by Slava

Considering both promised a balanced budget less than a year ago, I would say its equally as pathetIc.

So the PC's with full access to an entire budgeting department tasked solely with creating the new budget said things were great and missed by 6 billion dollars. The WRP looked through the PC's numbers and said they were optimistic and that spending should be reduced to make sure we don't have a deficit. As it turns out the WRP were being a bit optimistic and under their campaign plan only managed to save 3 billion dollars, leaving them off by 3 billion.
The Liberals on the other hand promised 3 billion in tax increases which would still have them blowing the budget by 3 billion. Following your reasoning that is equally pathetic.
I didn't look up the NDP promises.

Both sets of figures though do not account for any reaction that the Liberals or Wildrose would have done if elected.

[Slava]

Originally Posted by GP_Matt

So the PC's with full access to an entire budgeting department tasked solely with creating the new budget said things were great and missed by 6 billion dollars. The WRP looked through the PC's numbers and said they were optimistic and that spending should be reduced to make sure we don't have a deficit. As it turns out the WRP were being a bit optimistic and under their campaign plan only managed to save 3 billion dollars, leaving them off by 3 billion.
The Liberals on the other hand promised 3 billion in tax increases which would still have them blowing the budget by 3 billion. Following your reasoning that is equally pathetic.
I didn't look up the NDP promises.

Both sets of figures though do not account for any reaction that the Liberals or Wildrose would have done if elected.

Why should we accept less than what was promised by any party? You can take it to the bank that if the Liberals were elected I would expect them to keep their promises as well. Its hardly asking too much of a party to let them set the bar and then expect them to clear it. I have no idea why you apparently think otherwise.

[GP_Matt]

Originally Posted by Slava

Why should we accept less than what was promised by any party? You can take it to the bank that if the Liberals were elected I would expect them to keep their promises as well. Its hardly asking too much of a party to let them set the bar and then expect them to clear it. I have no idea why you apparently think otherwise.

Is your premise that "All parties were wrong therefore the PC's can be forgiven"

Their budget was the furthest from the truth even though they were the only party that had a department full of people working on said budget. The Liberals received some office funding as the official opposition which would allow them to hire a few employees to do things like comb through the budget looking for errors. The WRA had no/minimal funding at the time but more donations coming in. They also had someone go through the PC budget. Both parties found 3 billion dollars worth of inconsistencies in the PC budget and stated in the election campaign that that should be fixed. The PC's denied this and ran on a campaign that everything was great.

The fact that the other two parties found half the errors in the PC budget should be noteworthy. They should not be dismissed for missing the other half of the errors.

[Slava]

Originally Posted by GP_Matt

Is your premise that "All parties were wrong therefore the PC's can be forgiven"

Their budget was the furthest from the truth even though they were the only party that had a department full of people working on said budget. The Liberals received some office funding as the official opposition which would allow them to hire a few employees to do things like comb through the budget looking for errors. The WRA had no/minimal funding at the time but more donations coming in. They also had someone go through the PC budget. Both parties found 3 billion dollars worth of inconsistencies in the PC budget and stated in the election campaign that that should be fixed. The PC's denied this and ran on a campaign that everything was great.

The fact that the other two parties found half the errors in the PC budget should be noteworthy. They should not be dismissed for missing the other half of the errors.

My premise is that all of the budgets proved wrong because of their reliance on fossil fuel revenue and needing to predict that price. The Wildrose were planning to slash spending, which would've affected the delivery of services, but we never did find out where they were cutting. The one big ticket cut for them was CCS and that was a red herring because it wouldn't have saved anywhere near as much as they alleged. We knew that from day one, and I had them running a deficit even with their resource revenue being in line. Honestly, when you say the Wildrose had the budget at the same level as the Liberals would've, I'm skeptical. My guess is that you could add another $1.5B to that figure based on the carbon capture alone.

Regardless though, the PCs have spent money where they said they were going to. The opposition parties all said that it was too optimistic, and maybe it was, but no matter which party won we would be looking at a deficit according to your figures.

[GP_Matt]

Originally Posted by Slava

Regardless though, the PCs have spent money where they said they were going to. The opposition parties all said that it was too optimistic, and maybe it was, but no matter which party won we would be looking at a deficit according to your figures.

I agree with you there, although I no longer have any insight with the WRA.

It will take a lot more than six months to fix the mistakes of the PC's.

And now I found out that the new Spartacus has started so I will be gone for a while.

[transplant99]

Originally Posted by Slava

My premise is that all of the budgets proved wrong because of their reliance on fossil fuel revenue and needing to predict that price. The Wildrose were planning to slash spending, which would've affected the delivery of services, but we never did find out where they were cutting. The one big ticket cut for them was CCS and that was a red herring because it wouldn't have saved anywhere near as much as they alleged. We knew that from day one, and I had them running a deficit even with their resource revenue being in line. Honestly, when you say the Wildrose had the budget at the same level as the Liberals would've, I'm skeptical. My guess is that you could add another $1.5B to that figure based on the carbon capture alone.

Regardless though, the PCs have spent money where they said they were going to. The opposition parties all said that it was too optimistic, and maybe it was, but no matter which party won we would be looking at a deficit according to your figures.

Great...now that we have established this...which deficit is a better one...

3 Billion dollars or 6 Billion dollars?

[Slava]

Originally Posted by transplant99

Great...now that we have established this...which deficit is a better one...

3 Billion dollars or 6 Billion dollars?

It's not that easy though. Are we cutting an extra $3B today only to have to make that up when costs rise? Because with interest rates at historical lows I'd be inclined to borrow today, build the capital projects we need and not be forced into this when labour, materials and everything else cost more than they do today.

[Azure]

Hasn't it already been established that the 'capital projects' are not the biggest part of the budget? Program spending needs to be cut.

[Slava]

Well tomorrow is the Economic Forum here in Calgary and I'm really looking forward to attending. I will post my thoughts and experiences here in case people are interested. The panelists they have lined up look really interesting and it would be hard to say that its not diverse and well respected. You can see the list here.http://alberta.ca/Economic-Summit-Panelists.cfm

I would be remiss if I didn't at least suggest my thoughts heading into this. I am extremely interested in this forum. I've done a fair amount of reading and "research" so that I make sure that I can keep up to what I hope is a good discussion of Albertas future. That said, I agree with Danielle Smith () when she says that the outcomes from this forum are likely pre-determined. I don't agree with everything he says here, but here is her editorial from the Herald this morning.http://www.calgaryherald.com/opinion...#ixzz2KK2G9KRO

[crazy_eoj]

Originally Posted by Slava

It's not that easy though. Are we cutting an extra $3B today only to have to make that up when costs rise? Because with interest rates at historical lows I'd be inclined to borrow today, build the capital projects we need and not be forced into this when labour, materials and everything else cost more than they do today.

Alberta has spent more on the capital budget in the past 10 years than many of the other provinces combined. How has that helped so far!?

This was after the left's incessant bleating of the 'infrastructure deficit' because of Klein spending roughly the same amount as other provinces.

Time to face reality, we can't all live in a palace with streets paved in gold.

[crazy_eoj]

Originally Posted by Slava

My premise is that all of the budgets proved wrong because of their reliance on fossil fuel revenue and needing to predict that price. The Wildrose were planning to slash spending, which I HAVE DECREEDwould've affected the delivery of services, but we never did AGREE WITH THEIR STATEMENTS ABOUT where they were cutting. The one big ticket cut for them was CCS and that was a red herring because it wouldn't have saved anywhere near as much as they alleged. We knew that from day one, and I had them running a deficit even with their resource revenue being in line. Honestly, when you say the Wildrose had the budget at the same level as the Liberals would've, I'm skeptical BECAUSE WE ALL KNOW THE LIBERAL TAX PROJECTIONS, ALTHOUGH BASED ON INFLATED ECONOMIC GROWTH AND IGNORING NEGATIVE EFFECTS OF INCREASED TAXES, WERE ENTIRELY REASONABLE. My guess is that you could add another $1.5B to that figure based on the carbon capture alone. BUT AGAIN I MUST REITERATE THE LIBERAL PROJECTIONS WERE PERFECT

Regardless though, the PCs have spent money where they said they were going to. The opposition parties all said that it was too optimistic, and maybe it was, but no matter which party won we would be looking at a deficit according to your figures. AND THE SIZE OF DEFICITS DOESN"T MATTER

fyp

[Slava]

Maybe you can tell me this though: if we can raise taxes and cover all of the spending requirements isn't that "living within our means"? Seems to me it is. Once upon a time I earned roughly 10% of what I do today, and in both cases I lived within my means on a personal level....

[GP_Matt]

Originally Posted by Slava

That said, I agree with Danielle Smith

I didn't think I would ever see this written. Do you mind if I take it out of context and apply it in my mind to the end of every political post you make?

[crazy_eoj]

Originally Posted by Slava

Maybe you can tell me this though: if we can raise taxes and cover all of the spending requirements isn't that "living within our means"? Seems to me it is. Once upon a time I earned roughly 10% of what I do today, and in both cases I lived within my means on a personal level....

We need to set REALISTIC goals as to what a 'spending requirement' is. Setting goals based only on spending is totally useless. That's exactly what the PC's have been doing for the past decade. Want better hospitals? Lets double spending. Want happier teachers? Lets double salaries and pay their pensions out. Economic slowdown? Let's quadruple infrastructure spending!

We should be bench marking our OUTCOMES and striving to find VALUE. There is no explanation why we cannot compete with similar provinces to deliver better health outcomes for less dollars. There is no explanation why it costs Alberta twice as much to build roads as it does in BC or Saskatchewan. Why does the Alberta government need three times as many managers to do the same job as private industry? How has the public service grown at double the rate of population but there has been no improvement in services or delivery?

Increasing spending has not solved ANY of the problems in Alberta. It's time to find some real solutions.

[Slava]

sure, but what if the realism is that our taxes are too low? I totally get that no one wants to pay more, but it seems like the Wildrose and their supporters are focused purely on cuts. We've seen that this is almost surely not going to get it done though; so why discount the increasing revenue side of the ledger?

I know that politically its a whole different mindset, but I'm hoping that the province makes economic decisions based on something other than ideology and rhetoric. I recognize fully that tomorrow is unlikely to result in that (as I noted above), but I still hope for this.

Oh, and btw one of you heroes in Ralph Klein increased spending by about 125% in his tenure. So while people point to him as some economic savant who could get things in line and make the tough calls it just wasn't the complete story.

[yads]

Originally Posted by Slava

sure, but what if the realism is that our taxes are too low? I totally get that no one wants to pay more, but it seems like the Wildrose and their supporters are focused purely on cuts. We've seen that this is almost surely not going to get it done though; so why discount the increasing revenue side of the ledger?

I know that politically its a whole different mindset, but I'm hoping that the province makes economic decisions based on something other than ideology and rhetoric. I recognize fully that tomorrow is unlikely to result in that (as I noted above), but I still hope for this.

Oh, and btw one of you heroes in Ralph Klein increased spending by about 125% in his tenure. So while people point to him as some economic savant who could get things in line and make the tough calls it just wasn't the complete story.

I would be fine with raising taxes only after the government has demonstrated that they actually did cost cutting first. Real cost cutting measures, like rolling back public sector compensation to be more in line with the private sector; reducing management overhead and implementing real delivery benchmarks in the highest spending areas. Until that is done, I don't event want to see them entertain the idea of raising taxes.