I READ HRM Coun. Jennifer Watts’ Sept. 24 opinion piece on tax reform and felt I must respond. First, bear in mind that with amalgamation, HRM became a very different entity.
No longer are we dealing with a municipality with a relatively dense and uniform population. Instead, within HRM, we have densely populated areas but also more sparsely populated areas with much larger lot sizes. These latter areas cost more to service since garbage collection, road repair and plowing will cost more per residence if the same level of service is to be offered. In fact, sidewalks, local transit and so on cannot be provided at a sensible cost per residence. Therefore, if you live in a less populated area, it is unreasonable to expect the same level of services as in the metro area.
• Equity
There are many ways to define equity, but in opting to pay for the cost of services received or available as a level of taxation, the Tax Reform Committee felt that this was far more equitable than basing taxes on an “assessment” which only had a high degree of accuracy in areas where there are frequent and recent property sales.
Anyone who has recently purchased a house will immediately pay based on that purchase price — thus discriminating against recent buyers, a group heavily weighted with younger home buyers and older people moving into condominiums. In fact, the assessment cap introduced as a political expediency by the province will continue to make the situation more inequitable over time.
The Tax Reform Committee’s proposal includes an increased level of support for lower-income taxpayers with more property tax relative to income and, in fact, the proposed surcharge on the small percentage of highest value properties was chosen to offset the estimated increase in cost of lower-income support.
• “We to me”
There was never any suggestion that reform should reduce public services. But it does not make economic sense to attempt to provide all residents with the same services without due regard to population density. Coun. Watts assumes people with modest homes have low incomes and those with large homes have, and continue to have, high incomes. The data from Statistics Canada show only a 22 per cent correlation between income and home value, not 100 per cent.
• Public consultation
Perhaps we chose a form some councillors do not approve of — or perhaps councillors wanted a slam-dunk answer, where there would be no controversy. I certainly met a large number of people who wanted to rant about the current tax system. We heard by a majority of about three-to-one that people wanted a system that “reflected cost of services and ability to pay.” People who liked the current system were very much in a minority. I can vouch for this as I attended every meeting.
• Validity of data
The data were from Statistics Canada for HRM. I believe that the economists Coun. Watts is referring to are those mentioned in a recent media article which gave an inaccurate figure of 37 per cent, not 22 per cent, for the correlation between home assessment and income. If the economists are implying that people with some of the large assessments used to have higher incomes, but now that they are older their income has fallen, that is probably true.
But if they cannot pay their taxes, HRM will put a lien on their home. Most people pay their tax bills out of current income and once their income falls, when they retire, there is little expectation it will return to a higher level. Forcing them from their homes does not sound like a just society to me.
• Making tax system easier to manage and assess
It seems Coun. Watts and the committee have some degree of agreement here. It was unfortunate councillors plunged into transit taxes before fully acquainting themselves with tax reform and debating the subject thoroughly. However, one of the key advantages of reform is it will force a far more accurate costing of services in different geographic areas of HRM, providing better information to council and helping them administer our large geographically diverse municipality.
• Environmental sustainability
Obviously, we failed to make our case clearly here. The very first thing the Tax Reform Committee agreed on was that any reform should support the regional plan. Our proposals do, while the current system does not. Under the proposed “recovering the cost of services in an area” approach, that is what a taxpayer will pay as their property municipal tax. More densely populated areas will pay less or perhaps have more services.
For condominiums and large apartment buildings, garbage pickup is more efficient, road service and maintenance cost less, and therefore they would benefit and pay less tax per unit. Single-family homes on large lots cost more to service and should pay for this; living farther from the city centre involves more highway use and more cost, so more tax/assessment. This encourages adherence to the regional plan, with growth in more compact space. At the same time, it permits freedom of choice in a fair manner for those who prefer a more rural home on a large lot.
• Conclusion
Yes, we need changes to our tax system. HRM is not just any city in Canada; it is ours, with its own unique advantages and challenges. Currently our property tax bills bear no relationship to the services that we receive or are available for us. This is an opportunity for council to lead and move to a more accountable system.
http://thechronicleherald.ca/Columnists/1145481.html
I READ HRM Coun. Jennifer Watts’ Sept. 24 opinion piece on tax reform and felt I must respond. First, bear in mind that with amalgamation, HRM became a very different entity.
No longer are we dealing with a municipality with a relatively dense and uniform population. Instead, within HRM, we have densely populated areas but also more sparsely populated areas with much larger lot sizes. These latter areas cost more to service since garbage collection, road repair and plowing will cost more per residence if the same level of service is to be offered. In fact, sidewalks, local transit and so on cannot be provided at a sensible cost per residence. Therefore, if you live in a less populated area, it is unreasonable to expect the same level of services as in the metro area.
• Equity
There are many ways to define equity, but in opting to pay for the cost of services received or available as a level of taxation, the Tax Reform Committee felt that this was far more equitable than basing taxes on an “assessment” which only had a high degree of accuracy in areas where there are frequent and recent property sales.
Anyone who has recently purchased a house will immediately pay based on that purchase price — thus discriminating against recent buyers, a group heavily weighted with younger home buyers and older people moving into condominiums. In fact, the assessment cap introduced as a political expediency by the province will continue to make the situation more inequitable over time.
The Tax Reform Committee’s proposal includes an increased level of support for lower-income taxpayers with more property tax relative to income and, in fact, the proposed surcharge on the small percentage of highest value properties was chosen to offset the estimated increase in cost of lower-income support.
• “We to me”
There was never any suggestion that reform should reduce public services. But it does not make economic sense to attempt to provide all residents with the same services without due regard to population density. Coun. Watts assumes people with modest homes have low incomes and those with large homes have, and continue to have, high incomes. The data from Statistics Canada show only a 22 per cent correlation between income and home value, not 100 per cent.
• Public consultation
Perhaps we chose a form some councillors do not approve of — or perhaps councillors wanted a slam-dunk answer, where there would be no controversy. I certainly met a large number of people who wanted to rant about the current tax system. We heard by a majority of about three-to-one that people wanted a system that “reflected cost of services and ability to pay.” People who liked the current system were very much in a minority. I can vouch for this as I attended every meeting.
• Validity of data
The data were from Statistics Canada for HRM. I believe that the economists Coun. Watts is referring to are those mentioned in a recent media article which gave an inaccurate figure of 37 per cent, not 22 per cent, for the correlation between home assessment and income. If the economists are implying that people with some of the large assessments used to have higher incomes, but now that they are older their income has fallen, that is probably true.
But if they cannot pay their taxes, HRM will put a lien on their home. Most people pay their tax bills out of current income and once their income falls, when they retire, there is little expectation it will return to a higher level. Forcing them from their homes does not sound like a just society to me.
• Making tax system easier to manage and assess
It seems Coun. Watts and the committee have some degree of agreement here. It was unfortunate councillors plunged into transit taxes before fully acquainting themselves with tax reform and debating the subject thoroughly. However, one of the key advantages of reform is it will force a far more accurate costing of services in different geographic areas of HRM, providing better information to council and helping them administer our large geographically diverse municipality.
• Environmental sustainability
Obviously, we failed to make our case clearly here. The very first thing the Tax Reform Committee agreed on was that any reform should support the regional plan. Our proposals do, while the current system does not. Under the proposed “recovering the cost of services in an area” approach, that is what a taxpayer will pay as their property municipal tax. More densely populated areas will pay less or perhaps have more services.
For condominiums and large apartment buildings, garbage pickup is more efficient, road service and maintenance cost less, and therefore they would benefit and pay less tax per unit. Single-family homes on large lots cost more to service and should pay for this; living farther from the city centre involves more highway use and more cost, so more tax/assessment. This encourages adherence to the regional plan, with growth in more compact space. At the same time, it permits freedom of choice in a fair manner for those who prefer a more rural home on a large lot.
• Conclusion
Yes, we need changes to our tax system. HRM is not just any city in Canada; it is ours, with its own unique advantages and challenges. Currently our property tax bills bear no relationship to the services that we receive or are available for us. This is an opportunity for council to lead and move to a more accountable system.
http://thechronicleherald.ca/Columnists/1145481.html
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