Who would deny that our island needs a vital economy? And who would deny that the economy is a fundamental consideration in the upcoming incorporation referendum?
So let’s take a look at our choices from a hard-nosed “dollars and cents” perspective. There are important financial considerations attached to our vote on incorporation — perhaps more than we have thus far recognized.
Many questions have already been raised about the tax burdens that might arise from opting for a municipality, such as covering the costs of maintenance of roads, policing and other vital services that are currently funded by the province. But alas, we have few concrete data to go on. Those presented by the incorporation study have been challenged on various counts, and at the very least they beg for much more information than we have been given. But of one thing we can be sure: the province has carefully reviewed the prospective balance sheet, and concluded that some 20-million bucks as an inducement for us to cut our ties is “chicken feed” compared to the burden the province will continue to shoulder if we say “no” on Sept. 9 — a burden that they would be more than happy to download on us if we say “yes.”
If Salt Spring opted to become a municipality, it would in all likelihood have to make up for a significant financial shortfall after the provincial “gift” has been exhausted. To do so, it would have two, not mutually exclusive, options: one would be to increase the tax levy on existing island properties; the other would be to increase revenues by aggressively promoting new development, with the aim of attracting more people to the island, whether as residents or as tourists.
The option of increasing the tax levy would undoubtedly lead to a decline in property values, for the simple reason that higher taxes increase the cost for homeowners to live here. With the second option, the municipality would attempt to increase revenue to its coffers in a variety of ways: expanding and densifying residential areas; encouraging new commercial and industrial ventures; providing more tourist accommodations (hotels, motels); making room for increased harbour traffic with new or expanded marinas and floatplane docks; and more.
But a push for rampant development has its own downside. A significant increase in population, both permanent and temporary, would add further strain on the already heavy demand on our drinking water, particularly during the ever-drier summer months. As well, ramping up development would require more roads and more of all kinds of other infrastructure — from schools to health facilities, water and sewage treatment centres, police stations, and so forth. There has been little, if any, discussion of the cost to taxpayers of all the new infrastructure that would be required with greater development stimulated by a municipality — all of which would result in higher tax burdens, in addition to stressing the island’s delicate ecology.
While the very thought of more development may well delight the island’s business community, the party wouldn’t likely last very long. Increasing stress on the island’s ecology would inevitably contribute to trashing the very feature that draws residents and tourists here in the first place. Let’s not forget what it is that visitors refer to when they come to Salt Spring and tell us that we “live in paradise.” Our island is still a relatively pristine, thriving rural and marine environment, not the next suburbia of cookie-cutter developments, box-store malls and cemented-over coastline.
Years back, Salt Spring was already flagged by tourism experts as teetering on the verge of over-development. It wouldn’t take much for our island to gain the reputation of being short on water, ever-busier with intolerable traffic and a bit of a zoo in downtown Ganges. What this would do for the island’s economy and property values is clear: they both would likely tank.
Then too, should the “yes” vote win out in a close call, we might well risk a major exodus among those islanders who remain strongly opposed to incorporation, because the concept and practice of a municipal government is not compatible with their idea of peaceful island life. Another exodus would likely occur as people would start seeing their tax burdens go up. A mass exodus would not only put downward pressure on property values; it would also lead to a reduced demand for goods and services supplied by island businesses, creating a ripple effect that would further depress the economy.
Bottom line: there is much more at stake than a vote for a different form of governance. A vote for incorporation is a vote that carries high economic risk for all islanders. In investment lingo, the downside risk appears far greater than an upside potential. Investors faced with such choices will generally walk away, unless they have a high tolerance for risk-taking. What is at stake here is the risk of becoming doubly impoverished: confronted by both higher taxes and lower property values. And while this outcome is not a certainty, it’s not a gamble we need or can afford to take.
David Rapport holds a doctorate in economics and has served as a senior advisor to governments and international agencies. Luisa Maffi holds a doctorate in cultural anthropology and is co-founder and director of the international non-profit Terralingua.