Tag Archives: Municipalities

Flood fight hits $750M as tax relief offered

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The provincial government is improving compensation for flooded-out Manitobans — including paying property taxes for some of them — adding to a mounting flood-fighting bill that has already topped half a billion dollars.

Premier Greg Selinger announced a few changes to his government’s flood compensation program Monday, including raising the maximum amount for disaster assistance claims by up to $70,000 per property in some cases, and offering to pay the balance of this year’s municipal and school taxes for up to 3,800 people whose properties were damaged or destroyed by flooding.

Selinger said the cost of flood fighting, mitigation efforts and compensation for damage is now expected to be upwards of $550 million province wide for 2011’s flood. That figure doesn’t include a bailout package worth up to $194 million for the agricultural sector, which was announced last week.

Flood fighting, compensation and mitigation work — including more than $600 million spent expanding the Red River Floodway — totalled about $1 billion for the 1997 flood.

“There are extraordinary costs that come with extraordinary flooding,” Selinger said.

‘Extraordinary costs’

The government has already been running deficits for a couple of years, and the premier admitted a hit of several hundred million dollars is sure to cause some difficulty at budget time.

“There’s no question this was not in the plan, but you can’t make reality adapt to the plan,” Selinger said, pledging that the flood spending will not change his government’s pledge of getting out of deficit by 2014.

“Our commitment is to return to balance within the five-year plan and we’re not wavering from that commitment,” he said.

Selinger said the province will cover the pro-rated property taxes of some homeowners and cottagers from the time the flood hit the property in question until the end of 2011.

“The municipalities will tell us which properties they think deserve relief,” he said.

It’s expected those properties whose value has been affected by flooding will be eligible, according to government officials.

The province will pay the money directly to municipalities on behalf of the property owners, and expects the program to cost about $2.3 million.

The province will also be raising the ceiling for disaster financial assistance claims from $200,000 to $240,000 across Manitoba. For permanent homes in the Lake Manitoba area, the cap will rise from $200,000 to $270,000.

http://www.winnipegsun.com/2011/07/04/property-taxes-covered-for-3800-flooded-tobans

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City finds $14.6M for three projects

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City council found a way to spend an additional $14.6 million on a trio of existing projects and programs without adding a dollar to its 2011 spending plans.

In a series of votes, council increased the size of a tax-incentive program for downtown housing by $10 million, forked over another $3.6 million for the Canadian Museum for Human Rights and added another $1 million to a basement flood-proofing program.

But the extra spending won’t affect the city’s capital or operating budgets this year, as the housing money will be financed by future property taxes, the museum funds will eventually flow from Ottawa and the flood-proofing cash is being diverted from another part of the water-and-waste budget.

As a result, Winnipeg’s 16-member council approved all three moves unanimously, although the museum cash was the subject of debate.

The City of Winnipeg has already pledged $20 million for the Canadian Museum for Human Rights: $11.1 million of waived property taxes, $5.1 million of capital funding, $2.5 million in waived lease revenue and $1.1 million of refunded development and permit fees.

Council had approved $3.63 million of additional capital funding, with all of the money coming from Ottawa in the form of “payments in lieu of property taxes” — money federal institutions pay to municipalities instead of property taxes.

To make matters more confusing, the museum won’t receive any of the additional $3.63 million until the city pays back the province $11.1 million — again, using federal money. That’s because the city made its $11.1-million commitment to the museum up front, with the province forking over the cash on the city’s behalf.

Once this $11.1-million loan is paid back to the province and the museum gets its $3.63 million — probably no earlier than 15 years from now — the city will start keeping the money it receives from Ottawa, Katz said.

The financial wrangling is worth it due to the museum’s economic and educational benefits, the mayor said.
Daniel McIntyre Coun. Harvey Smith, however, expressed concern about the national museum’s repeated trips to the financial well.

As well, activist Martin Boroditsky appeared before council to argue grassroots non-profit organizations are struggling to balance their budgets and are more deserving of $3.63 million of public funds.
Katz retorted the issue is a not a matter of funding one organization over another, as the additional cash for the museum is a future consideration.

“It comes from revenue down the road. We’re not writing a cheque tomorrow,” Katz said.
St. Norbert Coun. Justin Swandel used stronger language.

“We should just shut up and get this done,” he said.

http://www.winnipegfreepress.com/local/city-finds-146m-for-three-projects-120847229.html

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Property Tax Controversy

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The Saskatchewan government is contemplating a delay in fulfilling two changes promised in last year’s budget, both of which will impact property taxes. One, the promise to shift education funding away from property taxes and onto provincial coffers, the second, to increase municipal revenue sharing. The former should be implemented immediately; the latter should be put on hold.

Municipal revenue sharing and school property taxes were both on the front burner of Saskatchewan politics for many years, though furor over property taxes was always greater. While British Columbia and the Atlantic provinces did not use municipal property taxes to pay for schools whatsoever, Saskatchewan relied on them more heavily than anywhere else in Canada. Last year’s budget was a giant leap forward as increased dollars from the province brought its share from 51 up to 63 per cent of total K-12 education funding.

But that wasn’t all. The province also took control of mill rates for school property taxes across the province, ensuring its increased funding would not simply lead to more spending by school boards and, therefore, a tax increase. Provincial funding was to increase even further in 2010-11, meaning general revenues would pay for 66 per cent of the total, leaving the rest to school property taxes. It is this further change that is now in jeopardy.

It’s a similar story for municipalities, who are now receiving record funding from the province. Last year’s budget dedicated 0.9 of the 5 per cent PST towards municipalities, scheduled to rise to a full 1 point in 2010. This meant the province, which gave $135 million to municipalities in fiscal 2008, would grant $167 million next year and would give $220 million in 2010. Again, that additional bump might not take place.

There are two main differences between municipal revenue sharing and school funding that make the latter the best choice for budget dollars. With the province taking over both the property tax and general revenue sides of school funding, lowering general revenues will have one of two consequences: less money for schools, or higher school mill rates to make up the shortfall. Bye-bye property tax reduction.

On the face of it, giving less money to municipalities would mean higher property taxes as well. But in an ironic twist, less money for municipalities might be good for taxpayers overall.

Like a fish that grows to the size of its environment, municipalities have simply taxed and spent more due to provincial revenue sharing. Consider that last year, even with record transfers from the province and higher assessment values, mill rates failed to drop in Regina and even rose by 2.87 per cent in Saskatoon. Ironically, the extra $7.7 million the City of Regina received from the province for revenue sharing was precisely equal to the amount given for salary increases at City Hall.

These dollars exclude the millions more given to municipalities each year through annual capital grants and special ‘stimulus’ grants. Projects driven by the deficit-spending federal government have also meant additional provincial funds of $25 million for Saskatoon and $20 million for Regina. This in and of itself is almost enough to offset the $53 million bump in funding that the province is reconsidering for the upcoming budget.

While it’s true that balancing the budget next year will take some difficult decisions, some are easier than others. In the battle of school funding vs. municipal revenue sharing, schools deserve to win hands down. Municipalities that want to overspend should have to justify their tax increases to citizens and not place the blame on another level of government.

http://canadafreepress.com/index.php/article/17516

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Business group says B.C. municipal tax hikes driven by salary spending

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Municipal salaries and benefits are the main culprit behind rising property taxes, says a B.C. small business group.

In its second annual municipal spending watch report, released Thursday, the Canadian Federation of Independent Business says that wage and benefit hikes are the main cost-driver behind growing municipal spending.

There’s a complete disconnect between the salaries and benefits in the public sector and the private sector,” said CFIB vice-president Laura Jones. “It’s completely unfair to taxpayers.” Jones estimates that municipal workers earn 10 per cent more than workers in business and industry, and 35 per cent more if you factor in benefits.

And there’s also wide variations in staffing levels, per head of population, the report shows. Abbotsford has five employees per 1,000 people, while West Vancouver has 29 and Whistler 46. “We need to start asking some questions,” said Jones. “Why does one municipality need 29 employees per thousand population, while another needs five?”

“There could be a lot more done to control costs at this level of government.”

Maureen Bader, B.C. director of the Canadian Taxpayer’s Federation, said that in North Vancouver, 91 civil servants made more than $100,000 last year, compared to 60 in 2006.

And in West Vancouver, 166 city workers made over $75,000.

“We’ve seen this across the province,” said Bader. “Self-interested pols are allowing municipal salaries to spiral out of control.”

Municipalities don’t face the same cost constraints as private industry, and can let tax-funded salaries go up without much, if any, restraint.”

Bader said most of the tax burden falls on business and industry, and in some municipalities the industry tax rate can be 20 times higher than the residential tax rate.

The CTF has called for a cap on proprety tax rates, and to create property tax rates for residents, businesses and industry.

“This will precent municipal politicians from subsidizing services to residents as a vote-buying tactic, while sending the bill to business.”

Retired financial manager Garrett Poleman, who is among a dozen members of a West Vancouver ratepayer-group, said “The big driver is definitely salaray and benefits, because that is 80 per cent of operational budgets,” said Poleman.

Hiring more staff brings higher salaries, and annual wage increases are steadily in the three-to-five per cent range.

“There’s been no barrier, no brake,” he said. “So you end up paying more taxes.”

And in Vancouver, property taxes could rise 4.8 per cent next year, and five per cent in 2011, just to cover salary increases of $26.7 million and $28 million respectively.

SFU public policy expert Doug McArthur said it’s not wages that are driving costs, but increased municipal services.

“If municipalities are growing services…you are going to see the overall wage and salary benefits growing,” said McArthur. “It’s a service sector.”

McArthur also said that big infrastructure projects like the millions spent on hockey arenas, Olympic venues and leisure complexes also hike up operating costs for municipalities.

“They are getting their capital project, but they are going to have to pay to operate them when they are finished,” he said.

Barry O’Neill, President of CUPE B.C., which represents 98 per cent of the province’s 37,000 municipal workers.

He said the CFIB numbers are being “plucked out” without back-up references.

“I don’t know where the evidence comes from,” said O’Neill. “It’s nonsense.”

Wage increases for municipal workers over the past 10 years have barely kept in line with inflation, he said, and they’re no bigger than the private sector.

A carpenter in the public sector is not making more money than a carpenter in the private sector, he said. “I never hear the CFIB talking about how you find other revenue streams,” he said.

http://www.theprovince.com/technology/Business+group+says+municipal+hikes+driven+salary+spending/2190132/story.html

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Municipalities' spending outpacing real growth

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While taxpayers feel the pinch, B.C.’s free-spending municipalities have been expanding their belts.

A report to be published today by the Canadian Federation of Independent Businesses shows that between 2000 and 2007, operating spending rose nearly 44 per cent at B.C. municipalities, while inflation and population growth increased by only 25 per cent.

Fully 129 of B.C.’s 153 municipal governments increased their operational spending at rates that exceeded what would be needed to keep up with inflation and population growth, says the report.

“That kind of spending is disrespectful to taxpayers,” CFIB vice-president Laura Jones said Wednesday. “And it’s really out of touch in this economic climate.” The report found that Prince George’s spending rose at 2.89 times the rate of inflation, the worst among large cities of over 25,000.

Twelve of B.C.’s largest municipalities spent at a rate more than double what could be justified by their growth in population and inflation.

Robertson said it’s important to remember the amount of downloading that has taken place on cities from the federal and provincial governments in recent years.

“But remember that cities manage only eight per cent of the tax base and are saddled with downloading — provincial and federal investment in infrastructure and their key responsibilities haven’t kept pace with the core needs.

“Affordable housing, child care, transportation: All of these are more and more on the backs of municipalities, and current spending reflects that. These are crucial services to the health and well-being of our cities and we can’t simply ignore them.” The report found that only 24 of B.C.’s 153 municipalities representing just 2.8 per cent of B.C. residents kept spending within population growth and inflation.

And it’s not getting much better.

The second annual B.C. Municipal Spending Watch report shows that local governments are not getting the message about fiscal prudence. Between 2006 and 2007, 92 of B.C.’s 153 municipalities widened this spending gap, while 61 narrowed it.

To cover the shortfall, municipalities have increased their revenues by 62 per cent over the seven-year period, to fund growth in operating and capital spending.

Property taxes have risen 62 per cent, user fees increased 95 per cent, and transfer payments from senior government shot up 121 per cent over the same period.

If local spending had been kept in check, the report says, people and businesses would still have $572 million in their pockets in 2007.

And property taxes would have been 14-per-cent lower.

“The conclusion is clear — municipalities have to get a lot more serious about keeping costs under control or our taxes are going to keep rising faster than our ability to pay for it,” Jones said.

Spending on operations just keeps going up, the report shows.

In 2007, spending per municipal resident was $1,142 in cities over 25,000, compared to $1,088 the year before.

The CFIB says 60 per cent of the typical municipal budget goes on salaries, which is the main driver behind higher taxes and fees.

“Given the current economic picture, you would think that municipalities would control their spending,” said Jones. “Unfortunately, that does not seem to be the case.” A survey of its 10,000 members found that most small businesses are demanding limits on municipal spending.

The report calls on B.C. to follow the lead of Ontario and Alberta, and hire a municipal auditor-general for B.C. to make local governments more accountable.

A whopping 85 per cent of small businesses want regular audits of public spending by civic authorities. They also want municipal spending capped to hikes no greater than population and inflation growth.

Some 55 per cent blame property tax as the most harmful tax to their businesses.

“The No. 1 thing they need to do is keep municipal wages in line with the private sector,” said Jones, adding government workers receive 35 per cent more in wages and benefits from similar workers in the private sector.

Two-thirds of businesses said local governments should focus on core services, and not provide services outside their jurisdiction.

The Canadian Taxpayers Federation agreed with the report’s findings.

“This very clearly shows that the provincial government must step in and cap property-tax rates,” said Maureen Bader, the group’s B.C.

“Spending is out of control. And the only way to bring it under control is to stop municipalities from just raising property taxes at will.”

http://www.theprovince.com/health/Municipalities+spending+outpacing+real+growth/2186197/story.html

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Understanding property tax numbers not that difficult

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Are property tax talks making your head spin? The numbers and the percentages – it can all be a bit overwhelming.
If you’re one of the few who understands it all, share the wealth. If you don’t quite grasp the concept, read on.

Grande Prairie city council passed the 2009 property tax, raising municipal taxes by 10.5% and bringing the overall rate to 9.4%. Confused?

Well here it goes.

Total property taxes are made up of the education tax (20%), which is set by the province, and the municipal tax (80%) set by the city. Both rates went up this year: Taxes for the educational system went up 6.3% and there was a 10.5% increase for the city. When combining the two rates, the overall increase in property tax this year works out to 9.4%.

The hike will see the average homeowner pay an additional $290 in property tax in 2009. A home assessed at $300,000 in 2008 paid $2,604. The same house’s assessed value decreased to $273,000 this year, but with the tax increase, that homeowner will pay $2,894 in taxes.

The city will collect a total of about $90 million in property taxes in 2009, of which $71.5 actually stays in the bank, while $19 million goes to the province for education taxes.

And now for the important part – where is your money going?

Some $11.5 million goes to capital projects, but does not completely cover the total capital expenses for the year. Costs are also paid with grants and the Municipal Sustainable Initiative – a 10-year provincial funding program that began in 2007, meant to provide municipalities with funds on an annual basis.

Projects for 2009 include the Aquatics Multiplex, $3 million for Aquatera’s community energy system and a third fire hall worth nearly $4.7 million.

Taxpayers contribute with $60 million of the total $98 million needed for the operating budget. The rest of the cost is covered through user fees, franchise fees, investments, unconditional grants and other sources of revenue.

For every dollar you pay in taxes, 30 cents goes to protective services, 26 cents to community services, 22 cents to public works, 19 cents to the school boards, two cents for government services and one cent for other demands.

http://www.dailyheraldtribune.com/ArticleDisplay.aspx?e=1556306

Property Tax Assessments to be Mailed Soon

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Property Reassessment Underway in Manitoba

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Property reassessment for the 2010 tax year is now underway to support fairness in property taxation, Intergovernmental Affairs Minister Steve Ashton announced today.

“Frequent reassessments are necessary to keep our property tax system equitable,” said Ashton. “While property assessments across the province are increasing, it is important to remember this does not necessarily result in an increase in your property taxes.  Usually only properties with above?average assessment increases may see a property tax increase.” Continue reading →

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