Should civic politicians get a third of their pay tax free?

KAMLOOPS — Municipal politicians receive a benefit a lot of people might not know about — a third of their stipend is tax free.

It’s been that way since I remember, and it’s there in consideration of the day-to-day expenses incurred by municipal office holders. Under the federal Income Tax Act, elected members of provincial and territorial governments, school boards and some other bodies receive certain breaks as well — referred to as “non-accountable allowances.”

Justin Trudeau proposes to take that away as of 2019, which basically means at the beginning of the next term. There’s good and bad in this.

As someone who might be affected, I have no objection to it, in principle. Municipal politicians are reimbursed for expenses in a number of different ways and, to my way of thinking, the one-third tax-free provision has become just a benefit of elected office rather than an expense allowance.

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Depending on how local governments respond to its removal, however, Trudeau’s plan could be counter-productive. Don’t forget municipal politicians decide how much to pay themselves.

While some tie raises into inflation, some ask citizens’ committees for advice, and others set the mayor’s salary and then councillors’ pay as a percentage of that (which is what Kamloops City council does), ultimately the decision is up to the politicians themselves.

Which means, all they’d have to do to offset the impact of eliminating the one-third tax break would be to give themselves a corresponding pay increase.

I sincerely hope that won’t be the case, even though the federal government’s white paper on the subject states the reason it won’t take effect until 2019 is — and I quote — “in order to provide affected organizations more time to adjust their compensation schemes.”

Many City councils and regional district boards might be overly tempted to use the one-third take-away as a good excuse to start boosting their own pay, thereby costing taxpayers more.

I certainly hope not.