Lessons I Hope We’ve Learned from This Year’s Budget
Now that the tax notices have been sent, there's been quite a bit of feedback on the impact on both residents and business owners. Most home owners are facing a higher increase due to the flat taxes – the Pineview Terrace levy of $27, the $60 flat tax set a couple of years ago which has an undefined purpose, but which has been used in both previous years to balance the budget, and the new $189 flat tax which is directed to road repair and maintenance. Flat taxes have a greater proportional impact on lesser valued properties – only high value properties will have seen a lower than average increase. In my own case, our property taxes have increased by 19%.
This, of course, pales in comparison to the impact on businesses, particularly small businesses, where flat taxes have the same higher proportional impact as on lower value homes. Unfortunately, administration didn't provide specific examples of what the effect would be, but when I did some rough calculations based on how the $60 flat tax had translated into taxes on businesses from $300 to $3,000, it wasn't difficult to make the assumption that tripling the flat tax was going to hit small businesses pretty hard, and I said this before each budget vote, but to little effect, unfortunately. My motion to remove the $60 flat tax and put it back into the mill rate calculations was also unsuccessful.
As I said in an earlier blog, I don't like flat taxes, but I support the two directed flat taxes because they will be dedicated to set, and necessary, purposes, not used to balance the budget. The road maintenance flat tax was the only option that we could think of to make up for past neglect and misspending. If this tax proves to be more than we need for a year of work, then it can be reduced in the future. And the Pineview Terrace levy will be gone after 2015.
Tax increases are never popular, of course, even when they're necessary, but I hope that, as a council, we've learned from the almost universal negative response that we've received, whether formally, in the press, or in our casual encounters, and that we use this learning in next year's budget process.