Annual mill rate versus base tax debate begins

Tyler
Tyler Clarke
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Coun. Charlene Miller is seen during Monday’s executive committee meeting, during which she opened the floodgates of conversation by suggesting that an existing base tax be shifted onto the mill rates. 

A split council has commenced their annual debate on the merits and pitfalls of mill rates versus base tax.

Coun. Charlene Miller kicked off the debate at Monday’s executive committee meeting, during which she argued for greater reliance on mill rates.

“For the business people out there and for my people who are on fixed incomes, that would be more sensible to have it that way than the way it is,” she concluded.

The base tax versus mill rate debate boils down to councillors’ stance on how the tax burden is spread throughout the city.

Base taxes are a flat rate all residential property owners pay, whereas mill rates are levied against properties’ assessed value.

As such, a higher base tax means a greater tax burden on households of a lower value, whereas a higher mill rate disproportionately affects those whose residential properties are of a higher value.

Residential property owners currently face three base taxes -- a $60 snow management and infrastructure base tax, the $189 municipal roadways base tax implemented last year, and the $27 Pineview Terrace Lodge base tax.

The $60 snow management and infrastructure base tax received the brunt of debate on Monday, during which its merits were called into question.

The base tax was introduced a few years ago under “an illusion of trying to keep that tax rate percentage low,” Coun. Lee Atkinson explained, noting that without the new base tax the tax rate percentage increase would have been in the double digits.

“It’s like playing a game of saying we’ll give you a four per cent tax rate increase but we’ll give you a base tax that actually raises more.

“I think that to put it on the mill rate factor would have been a more fair option, especially for small businesses, and for homes that are less expensive, this is fair across the board.”

Miller asked that half of the currently uncommitted $60 base tax be placed onto a mill rate.

A base tax of $30 raises between $650,000 and $700,000 worth of revenue, city finance director Joe Day explained, noting that this would bump up this year’s mill rate-driven tax rate increase by 2.5 per cent.

Satisfied with the city’s current 4.5 per cent tax increase, Dionne argued against Miller’s idea.

“So if they want to see if they can get it past council that we’re going to join the other big cities in the province and raise our taxes seven per cent like everyone (else), I encourage them to do that, but at this point I don’t support it,” Dionne said.

Although the mill rate would technically increase by an additional 2.5 per cent if it absorbed a $30 base tax, all residents would also see their base tax drop by $30.

Across council chambers and ideologies, Coun. Martin Ring reiterated his support of a greater base tax.

Last year’s introduction of the $189 municipal roadways base tax “did what I think most of us thought it was going to do when we brought it in, and it did arguably lower taxes in the new residential areas,” Ring said.

“They noticed it and they appreciate it, but what people need to realize is that they’re still cutting a cheque -- for some of those residential properties -- for $6,000 or $7,000 for residential property tax, which is a significant chunk of change.”

For the business people out there and for my people who are on fixed incomes, that would be more sensible to have it that way than the way it is. Coun. Charlene Miller, on shifting a base tax onto the mill rate

 

The tentative 2014 tax increase

The city’s tentatively approved tax increase for 2014 stands at 4.5 per cent on the mill rate.

Existing residential base taxes remain in place, including the $60 snow management and infrastructure base tax, the $189 municipal roadways base tax, and the $27 Pineview Terrace lodge base tax.

There’s also a library mill rate jump from .730 mills to .750 and an unchanged Alfred Jenkins Field House mill rate of .580.

When also factoring in the education mill rate of 5.03 (unchanged since last year) those owning a residential property valued at $238,000 will see their taxes go up $66.71 over last year -- a 2.5 per cent increase that brings it up to $2,712.39.

 

Commercial properties

Commercial properties are taxed at a higher rate than residential properties.

Everything from mill rates to base taxes are higher for commercial properties, whose base taxes are imposed at a higher, varying rate.

Requesting a lessened burden on commercial properties, Coun. Don Cody made note of this on Monday, pulling aside the municipal roadways base tax as an example.

Residential property owners pay $189, whereas commercial properties valued up to $150,000 pay $710 -- a rate that dramatically increases in accordance with property value.

“As soon as you start looking at adjusting those commercial ones, it has to fall back on residential,” Ring cautioned.

A commercial property valued at $507,100 will pay $20,294.32 this year -- a 2.4 per cent jump from last year, representing an additional $493.10.

 

An even greater base tax?

At Monday’s meeting, Coun. Tim Scharkowski asked administration to prepare a report for next year’s budget on the implications of adding essential items onto a base tax.

A similar report came out at this time last year.

If police and fire costs were spread evenly throughout the city as a base tax, residential property owners would pay about $500 for police and $200 for fire service, representing a $700 base tax.

In a report Day put together using last year’s figures, this would translate into the owner of a residential property valued at $140,000 seeing a tax increase of $283.

A residential property valued at $240,000 would see a tax decrease of $14 and residential properties valued at $340,000 would see a tax decrease of $311.

The mill rate versus base tax debate is expected to continue at the next city council meeting, on Monday, April 7, at 5 p.m. 

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