Sir: Recent reports in the media have raised alarms about residential municipal tax increases, suggesting that average residential tax increases are running close to 5%. Administration and council thought a 1.2% provincial educational tax reduction would apply to the residential properties and it doesn’t, so the tax rate on residential will be higher than expected
Let’s all take a deep breath. Most residential tax bills are nowhere near 5% higher than last year. Here’s why: Municipal taxes have basically three parts:
• Tax rates – the percentage of property assessment that is charged as taxes. This is decided by municipal council, within rules set by the province and with advice from municipal administration.
• Property assessment – this is decided every four years by Municipal Property Assessment Corporation (MPAC), a provincial agency, based on current market values of properties.
• Tax bills – calculated as tax rates multiplied by property assessment. This is the amount you are charged as taxes on your property.
Let me ask you – which of these three parts are most important to you? The first and second are paper numbers that don’t really affect you. The latter comes out of your wallet or bank account. That’s the one you want to pay attention to.
That figure is also the number that funds your community services. Cut it and you starve community services – police, fire, library, roads, sidewalks, bikeways, sanitary and storm sewers, street lighting, etc.
So what’s the reality? Most residential property owners had a reduction in the assessed market value of their property. So what? Most are not planning on selling right now, and anyway the market value of their property has recovered since the evaluation at the bottom of the market. The reduced assessment of their property value gives them a lower tax bill even with an increased tax rate.
Commercial and industrial property owners are making out like gangbusters. Their tax rates have gone down with the unexpected help of the provincial education tax reduction and so have their property assessments, so their tax bills are nicely reduced. The municipality may claim that this makes C-K more attractive to new businesses, but we are already competitive on tax rates and more than competitive on property costs, so the commercial-industrial rate reductions are throwaways of municipal finances that could be used for community improvements. Skyline Properties, the ethanol plant, Dan Warrener, Dean Bradley, Walmart, Target and Home Depot, etc. don’t need our welfare. They deserve fair and competitive tax rates, but they don’t need us to be a bargain basement.
The bottom line is we’ve thrown away a painless opportunity to increase the municipal tax revenues that are needed to fund community improvements. The result is Chatham-Kent continues to offer a deteriorating quality of life that will continue to drive away potential new residents and businesses. Council and administration have been obsessed with the tax rate, and have forgotten to manage the tax bill.
Let’s invest in our communities and turn this around!