As the Olympics approach I am trying hard to get into the mood and share some of the fun and excitement. But I am having a problem. I can’t find the excitement. And no one seems to be having any fun, nor do many think they will even when the Olympics start. The evidence for this is everywhere – in the polls, in the bars, in the coffee shops, around the water coolers and in the media.

I supported the Olympics, in the government when the original decision was made to make an application, during the Vancouver vote and in the forums and discussions about it before and after the vote. I supported it because I believed it would showcase our beautiful city, inspire and perhaps shame us into really doing something to meet the needs of the people in the downtown east side, support our athletes and give us a chance a to celebrate our city and really have some fun. I believed that people in the province and the city would get to participate in the major events and that local businesses would have an opportunity to embrace and profit from the event. I really did believe that in Vancouver it could be the people’s Olympics.

Sadly, I was wrong. Ordinary people see it. They are surly and resentful about the whole thing. It shows in the frustration of many small business people, who have been banned from even mentioning the Olympics in their signs and promotions. They have in effect been told to butt out – these Olympics are not for them. Hard to imagine unless the money is everything. It shows in the herding of the homeless off the downtown streets and into the east side ghetto. This you can see with your own eyes if you go for a stroll on Hastings from Burrard to Main. Suddenly there are no homeless and few panhandlers until you get to Abbot, after which during the day the streets are a bee hive of homeless street people suffering from all kinds of maladies. That is where they have been pushed – out of sight, out of mind. Until its over.

Try as I might I don’t now feel like we are going to be having any fun. I don’t see that many feel they are going to be having any fun.

Mostly now I wonder why, and what went wrong. It will take time to figure it all out but already some of the main reasons are clear. They include:

1. The complete preoccupation with big money. Local business are being put under close watch and tight control because any reference to the Olympics by them might bring protests from the big money sponsors and advertiser. So there is no flexibility, no room for good will embraces by local businesses and no openings to get into the swing unless you have paid. This has turned the whole thing into a gross, vulgar event. How can there be a feeling of excitement when you have suppression of expression worthy of a police state? And why didn’t we have managers and politicians who pushed back on this?

2. The fixation on security. Security costs will be over $ 1 billion. Police and military will be everywhere. Ugly fences, barriers, and temporary structures secured by reminders of the Berlin wall are popping up all over. Already one should not be surprised to be challenged by a creepy security officer for being around some place that seems to have no security significance. We hear abut security zones and no go areas, but the descriptions are impossible to understanding. Its creepy. It’s no fun.

3. Constant reminders about congestion, traffic control, crowd management, pedestrian channeling and a whole host of other things that tell us only one thing – the Olympic managers are afraid of the people. We are their worst nightmare. We are told over and over again where we can’t go, what we can’t do, and what we can’t see. Mostly the message suggests that we should stay away. Especially seeing as how there will be so many rich and important people around. Our presence would take away from their enjoyment. That makes it pretty hard to have fun.

4. Pricing and availability of tickets. Somebody, somewhere in the whole Olympic organization lost their way a long time ago. Few local people got tickets. The one’s that did paid enormous prices. Now all we hear is that you can’t come, because you don’t have tickets and if you want one -say to the opening ceremonies you can get a poor seat for $2000. What are they thinking? How did they manage to stage opening ceremonies for example that are completely beyond the reach of any but the wealthiest. Didn’t anybody think about how to do this to be inclusive, not exclusive.

5. Irresponsible and needless spending. All of us hear that we have to accept cut backs, and that there is no money for housing, the poor, the arts, culture, schools, suffering communities outside Vancouver and on and on it goes. But no one ever seems to say no when it comes to Olympic spending. Need an improved highway – no problem – spend over $1 billion when much less would do. Need better transport form the airport – go ahead – spend a couple of billion and line the contractors pocket with a $400 million windfall over costs that no one will take responsibility for. Want a new building here, a fancy street boulevard there, a new temporary structure over there better built than any homeless shelter – go ahead – no problem if its for the Olympics. The city is literally dripping with dollars spent on extravagances that don’t make sense in these times of hardship. Have you seen the multi-million dollar refit of the ice rink at Robson Square? Have you heard about the $500 million dollar Olympic legacy retractable roof for BC Place? Meanwhile people who are suffering and in need and many important social priorities are being ignored. And the rural areas and communities in the interior are facing serious economic and social problems. The government’s response to them is that we hear your pain, but there’s no money. All of those has created a cognitive dissonance that helps explain the anger and the grumpiness.

6. Fun for the privileged but not for the people. The lack of availability and price of tickets are like a slap in the face to ordinary people. Perhaps it is true, as Vanoc claims, that this is just how big international events have to be these days. But if there is no other business model, than I think most people would prefer we stay out of the business. It is hard to believe that smart people could not have thought of someway to make local attendance easier and more affordable. And then we have the spectre of the Premier, Mayor, Cabinet Ministers, Liberal MLA’s and City Councillours voting themselves expensive taxpayer paid tickets to attend expensive events, ostensibly to encourage investment in our city. This is of course a silly rationale – no serious investor is going to be influenced by a free ticket, a steak and a bottle of fine wine with some petty local politician. As it is, seeing the way things have turned, these self serving politicians are seriously close to losing their social license to use and abuse our taxes and our city amenities.

7. “Help” for the homeless coming in the form of spin, temporary shelters, and security fences. This hardly needs elaboration. The sweeping claim made that a big benefit of the Olympics will be a resolution of the homeless problem because we cannot afford to have the world see this embarrassing scar on the heart of our city has turned out to be empty and meaningless. This is shameful and to most of us embarrassing.

8. And perhaps most of all, stiff, boring, no-fun leaders. Fun events are by definition populist events that resonate with mainstream residents. This is not happening. This Olympics reeks of elite privilege. Part of the explanation is that not one of the leading personalities has a populist bone in his or her body. They are all stiff, humourless, uneasy with people and impossible to imagine having a good time on their own, much less with real people. Gordon Campbell? A fun guy? I don’t think so. Gregor Robertson? Can you imagine having a genuine conversation with him? I doubt it. Furlong. Yikes, not someone you would even think about partying with. Ditto for Cabinet Members and City Councilours. The truth is there is no fun loving face of the Olympics. They are all constitutionally unable to have fun, palpably afraid of real people, and only comfortable with celebrities and the rich. And the leaders define the event. So this one is not going to be about people and having fun with them.

I still think the Olympics is a good idea. And I believe it will still come off as a well managed international spectacle. But handled differently it could also have been the people’s Olympics. It could have been a celebration. Sadly, however we are stuck with the no fun, elite Olympics. For most it will be two weeks discovering what it feels like to live in a police state run by humourless apparatchiks. That’s not the kind of Olympics I had hoped for. And it didn’t have to be this way. It is so much less than what it could have been, if we hadn’t ended up with these unimaginative, humourless, fear obsessed people in charge.

We are being told by government and Vancouver city officials that while the Olympics is a feel good event, Vancouver residents and visitors can’t go so far as to express themselves in ways that might embarrass the city. Three recent changes in laws and policies that add significantly to the powers of the provincial and city governments and their police forces wil help ensure that this won’t happen. All three bring back a few too many reminders of the 1936 Olympics in Berlin, when the government ripped down signs and took gypsy’s camping on streets and in parks off to shelters and jails as part of a campaign to make Berlin look better. All three need a much harder look.

The first is the well-publicized set of by-laws approved by the cities of Richmond, Whistler and Vancouver under a new provincial law that permits the cities to enter residences and other private property with only 24 hours notice to remove or cover up signs during the Olympic period. No distinction is made on the basis of the content of such signs, so it is not just to stop people from using the Olympic logo and symbols to advertise their products.

Next we have a new provincial law that will let police remove people who are ‘sleeping’ on streets and force them to move to shelters or jail. Documents quoted by the Vancouver Sun state “The officer takes a person to a shelter. If the person is not accommodated at the shelter, alternative accommodation may be found. As a last resort, and in order for the police to discharge their legal responsibility, the individual maybe taken to police cells… “.

Now we have the news that the Vancouver police are acquiring a high tech sonic device that can be used to cause grievous pain from a distance, making it very effective as a crowd control weapon. While the police insist that it is to be used only to improve communications, they and other experts confirm that it is also used by forces elsewhere for crowd control.

Of course the politicians insist that these measures will all be used benignly. They are not intended to be used to intimidate or interfere with the rights of people to speak freely either through speech or signs, or with their right to participate in organized protest. And we are assured, they are not intended to stop people from doing things simply because their behavior embarrasses visiting athletes, officials, and political leaders or tarnishes Vancouver’s image. After all governments are not permitted to do such things under the Constitution, and to do so would offend all of our basic values.

But we can we rely on the intentions of the police and security forces. Not likely. Remember the APEC meetings? I was a senior government official at that time, and thought I had seen it all, but I was shocked at the determination of the police and security officials to suppress behavior they didn’t like. The police and other authorities can be counted upon to make full use the powers they obtain, regardless of the intentions of the politicians who pass them. We can be sure that the police will push the envelope when faced with pressure to crack down on folks who make BC and Vancouver’ look bad’. That is the insidious thing about these kinds of laws –they are justified with good intentions but then applied on the basis of what they say. I have little doubt that protest signs will be ripped down, organized demonstrations will be broken up, and people will be lifted off the streets whenever the police, Olympic officials or government leaders dislike what they see or hear, whether or not there is a real security threat. And the Constitution can only prevent the use of these laws retroactively – that is after someone has mounted a successful court challenge. By that time it will likely be too late. And the police know that. So too do the lawmakers.

These laws mean only one thing – that the feel good message of the Olympics will be protected from any awkward protests or behaviors, regardless of our rights and values. That will be one of the legacies of the Olympics. It is not the one that most people hoped for. And it need not have been. The police have all the powers they need under existing laws. Our local and provincial leaders should know better. But of course they know that what they are really doing is giving the police and security forces the permission they want to use the heavy had when things don’t go as they want. For some reason politicians aren’t capable of resisting the demands for more police powers, so long as they have a cover for granting them. In this case it is the Olympics. I supported the Olympics but not to see them used to justify this kind of thing.

And kudos to the two city councilors from COPE (a civic political party) who voted against the Vancouver by-laws on signs.

Municipal governments all across the province are busily developing their budgets for the next tax year, which starts January 1, 2009.  Most will be trying hard to restrain their budgets.  The affects of the recession are now being felt full force and one can bet that taxpayers are not going to be receptive to paying substantially higher taxes.  Many city and local councils can expect vigorous public opposition to tax increases imposed to help close the revenue-expenditure gap.

But what is a responsible council supposed to do? After potential cuts reach a certain pain threshold, there will be tremendous pressure to raise tax rates.  But it is doubtful citizens are going to be as receptive to tax increases of the magnitude they swallowed last year. For instance in 2008 Vancouver residential taxpayers were stuck with an increase of almost 8%, almost 6% points higher than the rate of inflation. It doesn’t seem very likely that homeowners will have much appetite for a similar increase this year.

Part of the challenge for councils is to distribute the tax burden among different tax categories or property classes in a sensible and fair way.  The property classes each have their own tax rates or mill rates set by the councils as a percentage of market value of properties.  Getting the right balance of rates is challenging both politically and in terms of good policy.  There has been intense political lobbying over the past few years about differences in tax rates across classes of property. In particular business and industrial taxpayers have been active in protesting the fact that they typically pay tax rates that are significantly higher than homeowners as a % of the value of property.  These differences in most municipalities reflect a long standing view about fairness, responsibility and balance.

Last year Vancouver Council responded to this pressure by setting a lower rate of increase of taxes paid for business properties compared to residential properties. There was little public discussion about it, no doubt in part because the traditional anti-tax lobby, dominated by business, accepted it as a business friendly move.

While it is not clear what will happen this year if the same thing is done, it will not be surprising if there is a fairly strong negative reaction from homeowners, particularly if some vocal critics are inspired to take the lead.

An important question to ask is whether these differing rates of increases in property taxes are  the best way to help the business sector, if business needs or deserves a break.  The amount of tax paid by business depends on two things – the market value or sales price of business property and the tax or mill rate for business properties.  The market value of all business properties increases each year in response to the increase in the value of the small number actually sold.  This value is determined by the British Columbia Assessment Authority using formulae that relate properties that have not changed hands to comparable properties sold in the market.  Market values depend upon the revenue and costs including property taxes of businesses actually sold on the market.  The lower the taxes the higher the market values of properties actually sold, and the higher the value of all business properties on the tax rolls.

One of the clear results of a property tax break for business is that the market value of business properties increases in response to the lower tax rate. Indeed, based on the iron law of economics, the increase in property values will exactly offset a tax decrease.  In other words a tax cut or a lower rate of increase is in a short time translated into an offsetting increase in business property values.  Of course other things may affect property values as well, but that doesn’t change the argument about tax changes taken separately.

In part to deal with this potential erosion of tax changes, changes in property values are determined ahead of tax changes because assessments are done the year previous to the tax year.  In this way the municipality can shelter the property taxpayer from immediately having the gains of lower tax rates being undermined as a result of direct consequent increases in property values.  The municipality sets a target revenue number for business properties as a class each year, based on a rate against last year’s assessed values.  But what should be the basis for determining the share of revenue attributed to each class of property? Typically the question is approached by looking at the relative share by class of aggregate assessed values.  For instance, should business share of the change in the overall tax bill be proportionate to its share of the increase in total assessed values for all classes of property?  Or proportionate to its share of residential and business property values in aggregate?  Or a lower proportion, as the tax shift advocates propose? But because the tax rate will be an important factor in determining the following year’s assessed values, relative assessed values do not provide a fixed continuing basis for determining how much of the burden each class of property should bear.   Objectively, the relative shares can only be determined by drawing on some other means upon which to base the appropriate proportionate share of the tax load by class.

If the share is to be shifted in favour of a particular class, upon what underlying  principle is the proportion to be based?  If it is based on the relative aggregate assessed values for each class, changes in this proportion will be driven to a considerable degree by the relative changes in tax rates themselves.  Indeed it must be that the aggregate value of business properties is increasing more rapidly under this scenario so far as the affects of taxes are concerned, undermining in part through time the argument for tax relief.  There is something odd about following a principle for these purposes that has, as one of its major impacts, changes in assessed values through time that work against the principle.

There is also an important question about who really gains.  Since relative tax relief increases the market value of business properties over time, the cost of acquiring properties goes up and so too does the cost of doing business, eroding the benefit of the tax relief.  And this erosion falls immediately and most heavily upon new, usually young start-ups who are purchasing or renting property.  Indeed the supposedly preferred tax treatment puts the new and younger business operators at a competitive disadvantage, which is the opposite of what most people would want to see.

Of course factors other than taxes affect increases in aggregate market values in each class as well.  If prices of residences rise more rapidly than business properties because of demand, there will be a more rapid growth in assessed values of residential properties compared to business properties without any additional servicing costs.  But we can also ask, is this a good reason to increase the share of taxes paid by homeowners? Perhaps, but then the opposite should hold when business properties in aggregate increase in market value at the same rate or more rapidly than home prices, as could very well be the case in a number of municipalities over the next few years.  Will there then be a pause in the shifting of the tax burden when this happens?

It is time for a principled discussion by councils and their taxpayers about the reasons for and affects of the tax shifts that some are pursuing away from business and to homeowners, and for transparency about the shifts.  Otherwise tax changes go to those who push the hardest and who are most successful at winning the lobby game.  This never a good basis for setting tax rates but it is a particular concern now when homeowners and new start-up businesses are under financial pressure and thus very vulnerable to tax burdens.

And if business needs special help, it might be better to look at things that will be more effective in terms of results, like targetted support for young start ups, as well as high growth and high value sectors, knowledge dependent hubs and small independent business.  Or to lobby hard for a lower corporate tax rate for small business.  More on this last point another time. But these arguably make a lot more sense than blanket property tax shifts from business to residential taxpayers.