The lifeblood of Local Authorities

Introduction: Stabroek News has invited the People’s Progressive Party/Civic (PPP/C), A Partnership for National Unity and the Alliance for Change  to submit a weekly column on local government and related matters.  The PPP/C has declined the offer.

Alliance for Change column


By David Patterson

 

The main source of revenue collection for local authorities worldwide is the collection of rates and taxes; these are charges levied on property owners within the boundaries of towns/cities to offset the costs for provision of services such as garbage collection, street lighting and maintenance of roads and drains. In every sense rates and taxes are the lifeblood of a municipality, the City of Georgetown is no exception.

In Guyana, these rates are computed based on values contained in a valuation list prepared by the Valuation Department, a section of the Ministry of Finance. The process is straightforward. Every five years this department undertakes a physical inspection of every property within the boundaries of the City, assigns a value to each property and thereafter the City Council can compute the taxes payable by property owners. The computation of taxes is simple using an established formula, the bigger and more opulent the property, the more taxes the property owner pays. The justification for this is that the larger the property, then it will utilize a greater proportion of the City Council’s resources.

20140327AFCThe Valuation For Rating Purposes Act states that such a valuation list shall be prepared every fifth year; but in no case should this list remain in force beyond 10 years, the last valuation list for Georgetown came into effect on January 1, 1997, some seventeen years ago. The reasoning behind updating the City’s valuation list every five years is to ensure that all new buildings, erections and extensions are captured thus allowing the City Council to increase its revenue in line with the development of the City. Additionally, owners of the new erections and extensions will require services from the City Council which it can ill afford to provide since its revenue collection would not be increased.

The Government is in the habit of boasting that a sign of the strength of our economy is evidenced by the number of new multi storey buildings and spacious mansions being erected under their watch, most of these new erections are owned by their friends, family and favourites. However little is said about that fact that these new mansion owners are not paying their fair share of taxes; we have cases of multi storey hotels which regularly host Government activities paying rates of the single story timber building that was listed in the 1997 valuation list. Mansions built by the nouveau or newly rich that attract the same rates as the pensioner’s country cottage in the same street. This is wrong. A hotel that has hundreds of vehicles coming to it regularly will obviously contribute to the deterioration of the roadway more that a two car family of three. Another reason why the City Council is hamstrung to keep pace with its mandate – its revenue collection is in no way related to the ‘development’ of the city.

In 1999, the Government signed an agreement for a US$20M loan for Urban Development with the Inter-American Development Bank. One of the components was to be the reform in the property tax system, which was to lead to a better funded and functioning City Council. However, greater independence of local authorities is the fear of this government, thus the programme ended in 2005 without any measurable success, all reports and data collected for updating the valuation list of the City remains locked away in the Ministry of Local Government. Yet annually, the City Council complains about the lack of resources to accomplish its mandate, the dilapidated, untidy and unhealthy state of the capital city is visible proof of the effects of stifling the lifeblood of the City.

The lack of resources however, is no excuse for the continued ineptness of the current City Council, which on a daily basis provides comic relief to its citizens, the latest episode being the cancellation of a statutory meeting over the privilege to say prayers. As the country prepares for long overdue Local Government Elections, citizens needed to be reminded that holding of these elections will not in itself resolve the many ills that plague the city. It is the first step. Our next major challenge would be to loosen the government’s stranglehold on the lifeblood of the council, since without adequate resources little can be achieved regardless of intentions and promises.

We must have Local Government elections. We must implement the processes where the City can collect the revenue due to it. The battle for the restoration of Georgetown will not end with Local Government Elections alone.

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