Editorial | Next move, Mr Vernon

Richard Vernon, the new, young chairman of the St James Municipal Corporation (StJMC), is, on the face of it, getting a handle on things. At least he is saying the right things, including identifying the source of the substantial amount of money needed to fund his council.

The good thing is that he is not proposing to open new avenues of funding. Neither is he merely asking the central government for additional help. This is money owed to the StJMC.

The issue now is for Mr Vernon to collect it. Which, as with his other pronouncements, is one of the basis on which he will be judged.

At his inauguration after the local government elections a month ago, Mr Vernon pledged to run a transparent administration, including resuscitating the dormant Local Public Accounts Committee (LPAC) – a body whose job is to review the performance of the local government with respect to the quality of its service delivery, ethical standards and accountability. The committee’s chairman must be a person who is not an elected member of the council, while up to half of the all members can be similarly selected.

But while the establishment of these committees is a requirement of the law, insofar as they have existed it is merely with a limp. They received little attention and had even less influence.

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Mr Vernon’s commitment is therefore significant, and one to which this newspaper will hold him to account – as we will with respect to his other obligations under the Local Governance Act.

For instance, the finance committees of municipal councils (they are supposed to oversee the financial affairs of the local authorities) are also required to have up to half non-elected members, depending on allocation of membership between the majority and minority councillors.

This committee, and its operation, will be important if Mr Vernon is serious about collecting the nearly J$3 billion he says is owed to the St James Municipal Corporation.

Speaking at last week’s biennial trade expo of the Montego Bay Chamber of Commerce and Industry (MBCCI), Mr Vernon lamented that property owners and business operators in St James were not paying their taxes and fees, thus denying the municipality of a substantial portion of the funds it requires to deliver services to the community.

A portion of the finance for municipal governments comes from the licences and other fees they collect from businesses in their jurisdictions and for the services they provide.

According to Mr Vernon, of more than 6,000 businesses operating in his parish, 72 per cent were delinquent in paying their local rates.

“Only 28 per cent of businesses are paying for your licence to operate in the space within the municipality,” he said.

Those who do not pay owe “over $200 million”, placing additional pressures on the finance of the corporation.

But fees contribute a relatively small portion of the finances of the municipal authorities. The bulk of their resources comes from the 90 per cent of the property taxes collected in their jurisdictions, to which they are specifically entitled. The remaining 10 per cent is allocated by the central government to the municipalities on a needs basis.

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Additionally, 25 per cent of motor vehicle licence fees collected by the central government goes to the parishes, with 75 per cent of that amount allocated on the basis of miles of parochial road in each municipality as a percentage of the amount of such roads in the island.

But according to Mr Vernon, in a parish where 60,038 parcels of land are registered, 57 per cent of owners are either in arrears or non-compliant with their taxes.

“...Only 43 per cent of St James is property tax-compliant, resulting in a deficit of $2.5 billion,” he said.

Given that 90 per cent of the amount would go automatically to the municipality, that represents J$2.25 billion of which the StJMC is being deprived.

Mr Vernon is right to urge residents of the parish to do better in meeting their civic responsibilities. But moral suasion will not be enough in getting substantive change. That has to be underpinned by strong and creative enforcement measures.

Aggressively collecting local fees and charges is entirely the responsibility of the St James Municipal Corporation and leadership provided by Mr Vernon.

However, collecting property taxes is a central government responsibility that rests with Tax Administration Jamaica (TAJ). So just talking about the deficit will not mean much to St James.

In addition to whatever else he does locally to encourage property owners to pay their taxes, it is in Mr Vernon’s interest to seek partnerships, and to do innovative things with the finance ministry and TAJ, to ensure the outstanding debts reach the StJMC’s coffers.

That will require a new approach to parish management – and not just in St James.