Can car tabs start Vancouver’s economic engine?

City cannot ask county to solve Vancouver’s budget problems

John McKibbin is president and CEO of the Greater Vancouver Chamber of Commerce.
Eighteen months ago the city of Vancouver met with the Greater Vancouver Chamber of Commerce’s Board of Directors and said they have a shortfall of $2.4 million facing them in 2005. The Chamber’s initial response was to ask the city to hold the line and make cuts. We also said if the city has a long term structural financial problem it should be dealt with comprehensively. First, we recommended a small working group to scrutinize current city spending levels and determine basic service level for police, fire and roads that should be maintained. Second, the group made recommendations on how to finance those services over a ten year period.

When the city group considered funding options for maintaining services they looked at the B&O tax, which they phased out some years ago. The Greater Vancouver Chamber has consistently fought this notion as a bad idea, even though the city could raise up to $15 million through B&O.

The city can only consider those few options that the state allows. The option to raise and collect a vehicle excise tax or a local option gas tax is not granted to cities by the state. These options are granted only to the counties. However, the city of Vancouver and the county do not share budgets nor priorities of government. Asking the county to solve the city budget problem is unrealistic as an immediate answer to the city financial problem.

With the above option not in play, the city has to consider what is allowed. One option is an increase in the annual business licensing fee. When the city council received strong feedback from business owners that a three-tiered increase in the business license fee was unfair to smaller businesses the city council asked for additional comments from business through the Greater Vancouver Chamber of Commerce. The Chamber again undertook the difficult task of inviting representatives from greater Vancouver area business organizations to a meeting to offer their views and discuss the possible solutions.

The consensus was that there are no easy solutions. The essence of the Greater Vancouver Chamber of Commerce’s position is that we support jobs and community. We do not want to see further erosion of our public safety, do want to see investment in jobs, and do not want a renewal of the B&O tax the city dropped some years ago.

The city has proposed to go to the citizens of Vancouver next year and ask for a property tax levy lid lift to pay for public safety. We supported that. They wanted to raise the sales tax to pay for basic roads, 20 cents on a $100 purchase. We supported that too. They wanted to raise 3 million dollars for new road capacity tied to building new jobs. We supported that as well. This will likely require an increase in the annual business license fee.

The Chamber has participated in each and every step of the way over that past year and a half, protecting the interests of business from the B&O while supporting a healthy local economy through basic services provided by the city.

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