John Jensen

I'm back after a bit of hiatus with a number of posts lined up.  First off, a look back to the 1980s. Just before Christmas I grew interested with having a look back at the financial records of the City to see how it fared during the tough economic times of the early 1980s.  Since it seems pretty clear that we are entering such a period now, are there any lessons that could be learned? Before looking at the numbers, it's important to remember just how bad things were:

• Inflation was rampant.  In 1981 it was 14.5% per year in the Vancouver area, and only got down to 4.3% in 1984.
• The unemployment rate jumped from 6.7% in 1980 to 15% in 1984.
• Mortgage rates reached as high as 18.5%.

So how did the City fare?  Thanks to the helpful staff at City Hall, I was able to look at their copies of the Financial Statements for the City from that period, as well as the budget bylaws for the years 1979-1984. Reviewing them is tricky because of population growth during the period and the very high levels of inflation.  I wanted to make sure that apple-to-apple comparisons were made, so for each year I took the raw numbers and adjusted them by the population statistics for the year as well as for the inflation deflator number for that year. Some highlights:

• Licence and fee revenue, surprisingly, was not hit hard by the recession.  From 1980-1984, the City received about 15% more licence and fee revenue than it had budgeted for.  This may have been because there was a significant amount of provincial spending in Lower Lonsdale at the time -- the Lonsdale Quay complex, the ICBC headquarters, and the new BC Rail headquarters were all built at this time.
• Contributions to the General Capital Fund, however, suffered.  The City ended up contributing 15% less than it had expected over the period.
• Between 1981 and 1982 property taxes collected apparently shot up markedly -- 46% in one year!  That's "only" 42% after inflation and 32% per capita in real terms, but it's still a huge increase.  Not surprisingly, there was a decent surplus that year and taxes decreased in following years.

I'm still looking at this data but will post one chart.  Here's per-capita property taxes, spending on programs (ie not on projects, fund contributions, or general government services), and GCF contributions, all converted to 2008 dollars:

I'll package up all the bylaws, financial statements, and spreadsheet into a downloadable zip file in case anyone else finds this to be of interest. Updated -- you can download it all here: cnv_1979_1984.zip.