No, it's actually working as designed.
The idea is that most things that have to do with cities are just taxable income - Propaganda makes Gildar coalesce from the air and the citizens are picking them up, the merchant is doing a brisk business in the main square, the gold miners are bringing home the nuggets, but unless you are collecting taxes from them, the Empire sees no income.
I'm not saying I like the thinking behind it, but I have to say that it works great as a game mechanic.
And is a lot better balanced that most things in this game, so I would hate to see it changed... not until other, borked mechanics are straightened out.