TSBP Council Is To Blame For Large Tax Increases

Editor, Wiarton Echo:

In a September 29, 2010 all-candidates meeting, mayoral candidate John Close took the mike, casually walked among the audience, and confidently promised to deliver a 15% tax rate decrease over two years. Many in the audience took this as a promise to reduce taxes by 15%.On October 25th 2010 the electorate showed their support for the 15% tax reduction.

Did we get a 15% tax reduction?

Tax increases in total and on the average property were as follows:

2007 0.4%
2008 6.2%
2009 3.3%
2010 9.7%
2011 7.2%
2012 5.2%
2013 3.4%

Property taxes have increased 40.3% since 2006.

Instead of the promised 15% tax reduction from when the Mayor was elected in 2010, we got a 16.6% increase.

The real taxes are the taxes required to pay current expenses plus whatever is required to maintain our assets and treasury.

Since 2010, the current council has run down our assets and depleted the treasury.

I don’t have complete numbers for the asset and treasury depletions because former CFO Neifer refused to provide asset values. But the 2013 budget does include a transfer from reserves of $779,351, which is equivalent to a ten percent tax increase.

I estimated that the real tax increase, that is the nominal tax increase corrected to maintain asset and treasury balances, is over 50 per cent since 2006, over 40 per cent since the current council took office in 2010, and over 17 per cent just since 2012.

Councillor Jim Turner’s claim (Echo February 27) that council did not increase taxes for 2013 is false. In fact average taxes increased by 3.4 per cent. And the only reason that the tax increase is that low is because council decided to pay for their profligate spending by letting our assets fall apart and by depleting reserves.

Property taxes have increased 40.3% since 2007. Tax rate is the same as it was in 2007.

How is this possible?

Because it matters not that the tax rate increase is zero. Tax rate is irrelevant.

If there had been 10,000 properties in 2012 and a 10 million dollar total tax levy requirement, then the average taxes per property would be $1000.

Say for illustration that assessments for all properties doubled in 2013, but the total tax requirement was held constant at ten million dollars.

What would be the average tax per property for 2013?

It would be $1000, exactly the same as in 2012.

You would have a 100 per cent assessment increase, but zero change in taxes.

Because assessments have no bearing on total and average taxes.

And because tax rates have no bearing on total and average taxes.

Total and average property taxes are completely determined by how much council plans to spend. Taxes are completely controlled by council.

Jim Turner’s claim that “provincial assessors” are to blame for the tax increase is false.

Councillor Turner claims that only “10 cents of each dollar we collect from you is for council to direct towards things you tell us you want or need”.

This is rubbish. 100 per cent is supposed to be for serving the resident’s.

The point that Mr. Turner is missing is that much of the budget is inappropriately and in some cases illegally spent for the benefit of private interests and private interest groups, including grants, legal expenses, airport costs and many others.

If all of these improper expenses were eliminated, tax increases could easily be held to the rate of inflation without depleting our assets.

Mr. Turner claims that with growth you get more taxes and can spread municipal costs thinner. This is incorrect. With growth you do get a larger assessment, but you also need more services, which cost more money, and requires more taxes. If the increase in service costs is greater than the new taxes available from new assessment, then taxes actually go up for everyone.

When I spoke at a budget meeting in April of 2012, (before I was banned for the crime of absentmindedness), Mr. Turner walked out saying “I don’t need another lesson in economics”.

I’m not necessarily saying lessons would help, but it is quite clear that Councillor Turner needs every lesson he can get.

Craig Gammie
Town of South Bruce Peninsula

Advertisements
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s