Monday, January 21, 2008

Taxes forecast to rise… and rise, and rise

A survey of property tax and utility charges in 24 major Canadian municipalities by the City of Edmonton (PDF) found that London homeowners paid the fourth-highest municipal property taxes as well as combined property taxes and utility charges in 2007, based on a sample of 25-30 year-old 1200 sq.ft. detached houses on 6000 sq.ft. lots (see chart below). Londoners also paid the sixth-highest total property taxes per capita in Canada when school levies are added — a disproportionate burden on residents whose median family income and property value are lower than the median for Ontario cities. While methodologies for calculating representative tax figures differ between studies to produce varying results, London property tax burdens consistently score near the top provincially as well as nationally in survey after survey (see here and here).

Deputy Mayor Tom Gosnell is correct to point out that the Ontario provincial government downloads services to municipalities whose costs are not borne by property taxes elsewhere in Canada — given the taxes collected provincially in addition to municipal taxes, this is certainly an indictment of the Ontario government's financial management. But the inability of the municipal government to control these costs have been vastly exaggerated to defer anger over rising tax rates in London when discretionary spending constitutes the majority of spending in the City's budget. Gosnell also ignores the fact that London receives much higher-than-average funding from government grants… a fact that should not be lost on any of the 337 Ontario municipalities that, unlike London, do not receive any portion of the province's $314 million gas tax funding to cities.

Controller Gord Hume, on the other hand, dismissed the City of Edmonton's survey by citing a 2007 BMA Consulting report presented in the City's budget review (PDF showing that property taxes on a similar sample are lower in London than the provincial average. However, most Ontario cities with higher actual property taxes are located in the Greater Toronto Area where median incomes and property values are much higher than in London, and, especially in the case of Toronto, where municipalities bear or at least attempt to bear much higher service burdens, rightly or wrongly. Hume's defense deflects the question of government spending in London, which is entirely consistent with his position as Council's foremost apologist for spending.

Whatever the merits of various municipal surveys, it is clear that it is not just a prohibitive regulatory regime but London's taxes that are a deterrent to the kind of economic growth that could generate above-median incomes and property values in the absence of other natural competitive advantages. More to the point, they are an unnecessary burden to Londoners who do not enjoy the benefits of that potential economic growth. Avoiding the question of spending, per Hume, is aimed at creating the perception that taxes are a natural phenomenon, beyond nothing more than just a little tweaking by politicians. But the failure to exercise control over the costs of downloading as is allowed by provincial legislation for many of these programs is neither natural nor unremediable, as is the failure to demand accountability for spending in the City's own departments before they go over administration's generous extra-inflationary targets. Unfortunately, the City's approach to spending is exemplified not only by the attempt to create new services where existing services might already suffice as in the proposed $1.7 million per year call centre, but by the active refusal to even consider obvious methods for the cost-efficient delivery of service. In the meantime, property tax levies are predicted to rise over 4 per cent each year through until 2012.


Anonymous said...

Like I said before, London needs to try harder. With Anne Marie and her kind supporting such things as the Ambassador Program and the Performing Arts Centre, I'm sure we can lead the way in property tax rates.

Next year we can be number one!

Donna Pitcher said...

Thank you for the reference to my blog, Haldimands Unheard Voice in your post.

It is always nice to see people getting involved with local issues, and educating the public, and that your site does indeed.

I hope you don't mind that I posted here the link at the bottom for people to sign my on line petition regarding the gas tax.

We as Ontarions were "promised" by Premier Dalton McGuinty, "Fairness" for Ontarions. How fair is the "gas tax" distribution when these monies are collected from "all" Municipalities in Ontario, but are only given to the few.

Therefore "337" Municipalities in Ontario that "do not" receive their fair share of the gas tax have no choice but to put that burden on their residential homeowners, as these monies are slated for "roads, bridges and transit".

Haldimand County is one of "337" Municipalities in Ontario that have been left out in the cold by Premier Dalton McGuinty.

The least we can try and do is ask for an inquiry or public hearing into the collection and disbursement of the gas tax revenues in Ontario.

Each one of us that drive and purchase gas in Ontario pay "14.7" cents per litre at the pumps to the Province of Ontario. The Province in return puts this money into the "general" coffer, and then grants only "certain" Municipalities the "gas tax funding". This needs to be investigated, as each Municipality in my opinion deserves and should demand their fair share.

So please pass this on-line petition to as many as you can, with many Municipalities in the same situation that we are, we can make a difference!

To: The Legislature of Ontario

Whereas; The Province of Ontario currently receives 14.7 cents from every litre of Gas sold in the Province;

Whereas; The Province of Ontario currently allocates these funds for roads,
bridges and transit;

Whereas; Not all Municipalities in Ontario have public transit;

Whereas; All Municipalities in Ontario however have roads and bridges in grave need of repair, and many Municipalities are under great financial burden do to the lack of funding;

Whereas; There are "445" Municipalities in the Province of Ontario, currently only "108" Municipalities receive gas tax funding from the Province of Ontario;

We the undersigned petition our Provincially Elected Legislators in Ontario to commence a Public Hearing into the collection and disbursement of the Provincial Gas Tax in fairness to "all" Municipalities of Ontario.


Donna Pitcher
Dunnville, Ontario