Green Economics -- A Proposal for debate

A Green Economics Proposal

Decentralizing decisions and building a community-based economy;

A discussion paper

Part I

The NGA (New Green Alliance) principles declare that we are in favour of decision making at the lowest / smallest appropriate level. We also advocate the democratization of our society to give meaningful input to decisions back to the citizen.

The NDP (New Democratic Party) and other "left" parties have long ago been tarred with the idea that all they stand for is big government controlling everything and putting the socialist bureaucrat / politician's nose into everyone's affairs and everyone's business. The spectre of huge government depriving the citizen of freedom has been the big boogeyman used against all leftist parties. Perhaps this has been done with some level of justification, and even when not justified, it has been the thing in public conception that has been a millstone around leftist movements.

Since the NGA has not got that image, and since we are against that very same centralized domination of people's lives and for true democracy and citizen power, how would an NGA government restore decision-making and control to smaller community bodies?

If we listen to provinces and municipalities and health boards, etc, we hear the same tune; that all have local service responsibility with little or no local money raising capacity, and so no real power to carry out their mandates.

Provincially municipalities have access to property and business taxation as a revenue generator, but this has created inequities that the provincial government has attempted to cover with grants and grant formulas to municipalities and to school divisions.

What would be wrong in taking a percentage of the PST and gasoline tax (and others) generated within a local jurisdiction and returning it to that jurisdiction as revenue so it can make decisions locally? Along with the new revenue source would go new local decision-making and local service responsibilities.

An argument would be made that PST revenues are "generated" at points of commercial transaction, and that is more and more the larger commercial centre, and so those larger municipal centres would garner an unfair portion of the tax.

Counter that concern with the idea that those same commercial centres are likely to be the key service centres for many of those same purchasing citizens, and the idea seems more fair. If municipal amalgamation were encouraged to follow logical community regions, we might also have a more rational system of local government organization. If an urban commercial centre also had responsibility for providing services to its rural support base, there would be much greater incentive for citizens thinking about each other as partners and members of the same civil society.

We want to see rural revitalization, and support for the family farm. That needs local communities with local economies. Just as the NGA supports a revised system that recycles locally generated wealth back to the local community on a provincial and national level, we also should be encouraging that to be happening on a smaller scale within the province and within regions. If the local community got a percentage of the gasoline tax back as direct rebates to the municipality for road maintenance and repair, there would also be an incentive for local residents and municipalities to support the local town gas station instead of filling up in the city for one cent per litre less. Gasoline taxes are generated from driving on off-highway roads too!


The same would go for groceries and other purchases made by rural consumers. When we think of the amount of money that cycles through a farm producer's hands, that represents a significant commercial benefit to someone. While production costs are PST exempt under current rules, not all expenditures are production costs... etc. While this approach needs a lot of additional consideration and analysis, it might provide a basis of giving back power to the local level ALONG with the capacity to carry out the tasks.

If this were part of a Saskatchewan Certified Plan, communities that have gotten on board the Sask Certified program to make for more effective communities might receive incentives by getting an extra percentage rebate on the PST.

The idea of using the PST rather than income or property tax for this "return of revenue plan", is that it is a commerce-based taxation revenue, and something that people determine to some degree by deciding where they spend money to some degree.... so there would be incentive for local people to support local economies because the benefits return to the local community. We advocate community-based economics, this could be one way of encouraging it to happen.


Part II

After circulating the essay above, I received some feedback raising a few questions. Part II of this essay is my reply to those communications:

Currently we fund local services in various ways, but locally raised taxes are not up to the task so we collect taxes provincially and redistribute them to local authorities such as health districts, school boards, municipalities, and other groups. the "Provincial " money comes from income taxes, corporate taxes, and PST and other fees and license fees. Frequently this means that it is also a provincial department or bureaucrat that determines the local need and then doles out the money or even administers it directly. With that kind of central control of collecting and spending public money, the local community has very little control of how it collects or spends monies or how it fits local priorities.

There is no "central' source of money... even resource royalties belong to all the citizens, and all public money is raised from the community. The consumer and taxpayer generate the money but often it is then quickly removed from their control and handled by a central government that people feel is remote to them and out of touch with their plans for their own futures.

When I suggest a PART OF THE PST be routed back to the communities in which it was generated, for them to control, I do not think of that as "new" or "free" money, but rather money that would go back along with the mandate to fund and direct services at the local level that are now funded and
directed from a central government source.

Centralized collection, planning, allocation and provision of services at a local level is not all bad. To have equity of service and even efficiency, central roles are desirable and essential... but not always and not in as many things as is currently the case. What is bad about this centralization is that local communities lose any sense of being in control of their own futures, and lack the power to make local decisions about that future. With the loss of any sense of control also goes a sense of responsibility for local improvement. What also happens is a resentment and "blame the big guy" response for things that are wrong.

What I want to see is some way of bringing into effect the NGA principle of restoring local decision-making and to build a local community-based economics. These things won't happen unless there is a decentralization of decision making... a democratization and empowering of the citizen. These won't happen unless the citizen and the local community have the capacity (financial) of making decisions and then carrying them out. Just doling out funds from a central account won't do it either. All you get is communities fighting with each other for "big daddy' to give them a bigger share, without having any responsibility to increase the size of the pot.

My thought is that if local communities have access to a portion of funds they generate themselves, there is an incentive to try to generate more funds locally. This is where citizens and community organizations would be encouraged to build a local economy instead of supporting the further centralization of commerce and services that is destroying rural life in Saskatchewan.

The Saskatchewan Certified idea I had floated earlier was an idea for rebuilding pride in Saskatchewan, in Saskatchewan products, in Saskatchewan institutions and in Saskatchewan Communities. By working to goals set out in the Saskatchewan Certified plan, a community would be working to socially and environmentally responsible and sustainable goals. That requires local decision-making and it should include the development of a community-based economics that would sustain the economic and social life of the local community.


To help this happen, the redirection of a greater percentage of PST to local control and decision-making, you give the community the tools to realize their goals. For example, if one of the goals of the community under a Saskatchewan Certified plan was to upgrade water and sewer infrastructure and to upgrade the recreation resources for the community's young and older citizens, the allocation of an additional percentage of PST generated in that area to that area in order to carry out those plans would make sense. That way, they would not have to wait for a Regina bureaucrat or a provincial budget to determine when and if they would get money for these projects and how they would be done. Instead of waiting for the central authority to decide things for them, they could make their own economically feasible plans. If they needed more money, they could generate more by having a greater generation of PST within their community (a greater level of local commerce). That would give them more funds and would support the local community. Citizens would see that shopping for their groceries or clothing or hardware in the local town rather than in the city would help them build their senior's centre or to upgrade the skating rink or to get safe drinking water faster. Right now the only options local groups have to fund local decisions for local services is to do volunteer fund raising and HOPE for some central government matching grants. Again, that removes the decisions from the local community and makes it "political"... who is your MLA or how can a government buy the next election, etc.

I do not believe that the province should give up revenue generation ability unless it also delegates the concomitant service provisions that are being funded by the revenue being considered. Just giving up revenues centrally while keeping the same spending responsibilities would bankrupt the province with major economic impacts that none of us want to see again!

I would like to insert a short story that illustrates my point of retuning control to the local community.

Back in my days of living in the west end of Prince Albert and my role as a Community School principal and one of the people helping the West Flat Citizens' Group to get off the ground, I attended a provincial conference for deputy ministers and regional directors and supervisors of the Health, Social Services and Education departments. They had been called together to get the "word' about the government's plan to create the "child-first" "integrated services' model for Saskatchewan. That was a long time ago, and there has been a great deal of talk and so little real action since then.


Anyway, at the end of the session someone ( whose name I don't recall) got up and announced to those civil servants: "When you get back to your departments and to your communities, your role is to assist the local community to bring about improvements. It is not your role to determine for them what those improvements are to be. If you ask your community what they think would make it a better place for them to live, and they tell you that they think it would be good to get dog shit off the sidewalks, it is NOT you job to tell them that there are better and more important things for them to be doing. Your job is to ask them how they think you can help them get the dog shit off the sidewalk. When that goal has been realized, the community will come up with a new idea of what to do next, and again, your job is to help them realize that goal. That way they will develop the kind of community they want to be and they will also develop strategies to keep the dog shit off the sidewalk and to do other things that will really make it a better community."

I appreciated that speech, and then over the years that followed found that the people who were charged to carry the message out in action, ignored those wise directive and just kept on having discussions and turf protecting strategy sessions.

The speech that was so thoroughly ignored is the kind of philosophy, which if followed by a central government, will help our communities to grow, and which will have NGA principles come about in public policy.

I don't know a great deal about the Craik community project, but from what I have heard, that would be a great example of a local community making decisions for themselves. How would things work better if they actually had access to a part of the tax revenue that they generate and which is now being controlled by the provincial bureaucracy?

[This essay represents very preliminary thinking on this issue. I invite feedback to help identify problems with the concept, or to identify alternate ways of realizing the objectives of democratizing our society and of building a community-based economics. ]

Additional feedback from Jason:

"[And to be honest, while I have some questions about particular policy points (ie, I still am not sure how we will maintain equitable tax distribution if portions are paid back to more economically busy centers),] "

Gerald's reply:

When I propose decentralizing taxes to local governments I am expecting that this will include a decentralizing of services to be funded by these taxes as well. The real difference is that local communities can make local decisions.

The larger urban centres vs rural areas and tax revenue generation should not be that much of an issue. In most cases in our province the functional community includes urban centre and its surrounding rural spaces. [Reminds me of county systems] People work in town and cities and live in rural spaces in RM's. Rural people access many services in the urban centre from library to recreation to medical to retail and others, and we already recognize much of that with hospital levies on rural areas, regional library levies on RM's , shared water works, waste recycling, etc.

What a decentralization of taxes and service provision should achieve is a consolidation of the real functioning communities that do exist at various levels and help them to make key decisions for their futures. It might even promote a rationalization of local government boundaries (badly needed)... but dictated by the decisions of local peoples, not an arbitrary centralized plan.

If there is a community within a city, as is the case in larger cities, there can be a partial further decentralization to wards ,etc. There would be ways of keeping this from helping the rich get even greater share of the tax pie, and have the poor finance fancy ice rinks in rich neighbourhoods.

That can be achieved in part by "assuming" that each citizen resident pays the same sales tax and allocating tax return according to population located in, let's say, each city ward to a ward/community council. Acting on such an "assumption" would even have an equalization effect, because the wealthy probably do spend somewhat more in their local communities and would contribute a greater portion of revenue that will be shared/allocated on a per-person basis. In a larger community area such as an urban centre and a rural surround that really functions as part of that larger community, the same principle could be applied so that the resident population be used as the basis for deciding share of tax return. The total sales tax return would be as determined by the level of sales tax commerce transacted within the designated area, so there is still the incentive to do business within your own community.

I think another benefit would be an increased importance on electing competent and responsible local governments. If the decisions they make are going to really impact on local communities and they will be providing real services beyond what is the case now, that will generate more interest in and commitment to effective and responsible local government.

I think that these outcomes are definitely within the thrust of NGA principles of decentralizing decision-making and supporting a community-based economics.

Jason, I really appreciate your comment. it is most useful to the debate in that it spelled out what your concern/hesitation was with the decentralized tax idea. That forced me to get more specific and develop an argument that I had not done earlier. Thanks. That is what good debate and discussion does to the benefit of all and toward a much more productive decision. A simple reaction of "I don't like that idea" or "I don't think it would work" without any further detail about the objection does not contribute to the process. In most areas of our society we tend to get too much of the latter form of criticism, and it does not move us forward at all.