When is a tax increase not a tax increase?

Shell gameWhen blockheads don’t get what a levy is. This month, Collingwood Council voted for a tax increase that, through the admin’s sleight of hand, the bobbleheads believed wasn’t a tax increase. It was just the old shell game.

According to a story in the Connection (which also didn’t get it), headlined “No tax hike, but assessment increase will add to Collingwood residents’ tax bills”:

(Council) have also agreed to add a 0.75-per-cent capital levy, which will generate about $210,000 for the capital asset management plan.

A levy IS a tax increase. That’s why it’s called a TAX LEVY. Trying to call it by another name doesn’t hide the fact that it all comes out of the taxpayer’s pocket. It IS a tax hike because that’s where it appears: on your TAX bill. We don’t have a separate “levy” bill. We don’t send levy collectors house to house. It’s all dumped on our municipal property taxes. A levy IS a tax!

And Collingwood was reported to be one of the most-overtaxed municipalities in the province according to two of the CAO’s many consultants’ reports in the past 18 months. Wasn’t council paying attention when they were presented?

But hey, money grows on trees, right? Taxes, schmaxes. It’s only money. Your money. But now it’s their money. And they gave themselves a raise out of it, too.

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Screw the Taxpayer

Greedy administrationSitting down? Good. You might want a drink, too. A strong one. Ready? Get a grip on your chair. Here goes:

Collingwood is looking at a 3.9% tax hike for 2016. And that’s just its own portion.

Let me help you up. No, that isn’t wrong. It’s the proposed budget hike this council is contemplating. It was presented to council at an all-day meeting last week. The Connection reported on it, Dec. 2, in case you missed it (nothing in the EB, though).*

That municipal tax raise will be coupled with an increase from the county, sending your taxes skyrocketing up another several points.

Why, you ask, would council raise taxes when we have a surplus? Because it can. Because council is in thrall to the administration and does its bidding.

And you, dear reader, just have to grin and bear it. Have another stiff drink before you read the rest.

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Clarifying Municipal Taxes

CartoonSome candidates seem confused about municipal taxes this election. I thought I’d clear up a few facts about property taxes for your (and their) benefit.

Property taxes are made up of three components: the municipal portion (roughly 60%), the county portion (24%) and the education portion (16%). The rate (also called the mill rate) for each portion is set independently by its own body (the province sets the education levy).

The total rate is called the blended rate. The town’s portion is the town-own rate. Usually the blended rate is used because that reflects best what homeowners see. The rate depends on the type of property you own: residential, commercial, industrial all have different rates. Single-family and multi-residential are also different.

Let’s look at how taxes were calculated in 2014 for a single-family house valued at $200,000:

Total taxes payable will be $2,526.31, broken down as follows:

  • Education levy $406.00
  • County levy $608.00
  • Town levy $1,512.32

The value of your home – of every home in Ontario – is set by MPAC, the Municipal Property Assessment Corp. This is an independent provincial agency headquartered in Pickering. It sets the value of your home through a computer model that looks at the value of properties around you and at real estate sales in your neighbourhood.

This model means your home value can increase whether you do anything to it or not.

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How to Break Your Election Promises

[youtube=www.youtube.com/watch?v=ZqK97av7I3s]
Taxman: I was thinking of this Beatles’ song, recently, after council received the pre-budget report from the treasurer at last Monday’s council meeting. It’s dated, the song that is, but still eerily appropriate (I will have to learn to play it on my ukulele).

Last election, all of us who got elected ran on a platform of keeping costs and taxes low. Okay, that’s a fairly blithe promise; few candidates run on a platform of raising taxes and expenses, and fewer actually ever win a seat in any level of government.

It doesn’t matter if everyone knows taxes will go up after the election, or if there are seriously pressing needs to raise taxes. You don’t run on that platform.  Unless, of course, it’s to tax the rich – that seems a rather popular theme these days. Except, of course, among the rich. The 99% of us kind of like the idea… but I digress

This council has consistently attempted to cut costs, rein in spending and keep taxes low. That’s never easy, and often it’s very challenging, but we’ve managed to do so fairly well. In fact, the most recent auditor’s report (an independent audit) showed we have done it very well, in the past three budgets. The deputy mayor has cracked the whip and staff have pulled the oars. So far, the local ship of state has rowed in unison, avoiding the shoals of debt and taxation.

But it’s difficult to maintain a flat tax line. The world doesn’t work that way. Economies are always on the move.

Prices go up, costs go up, fee go up, old things need maintenance or replacement, new things need to be bought, collective agreements have built-in increases. Keeping a zero-percent increase is like the Red Queen’s race in Alice in Wonderland: you run as fast as you can just to stay in the same place:

Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else — if you run very fast for a long time, as we’ve been doing.”
“A slow sort of country!” said the Queen. “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

We don’t have the money or the tax base to run twice as fast. But at some point, we have to have some increases if nothing more than to play catch-up with out expenses.

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