Funding for Municipal Services
When talking to people about Municipal Government, the most common issue that seems to be brought up is property taxes. The Municipality of Maple Ridge has worked hard to limit increases in property taxes, and has budgeted for increases of 4% per year over the next 5 years (3% property tax increase plus a 1% infrastructure replacement fund). One problem with this is the Municipality is also responsible for collecting other taxes for Sewer, Water, and Transportation (Translink) that has, in some years, seen more significant increases than the municipal property tax portion of the annual bill. Another problem is the fact that the maximum provincial contribution towards property taxes, the home owner grant, has not changed since 2007. Municipal taxpayers primary concern is the total dollar amount they have to pay every year, not the fact that a specific portion of the bill has been limited to a cost-of-living increase.
When we compare Maple Ridge property taxes to other Metro Vancouver property taxes, the amount we pay is not significantly different from most jurisdictions. A reasonable comparison of Taxes & Charges on a Representative House can be seen on the Government of British Columbia Ministry of Community, Sport & Cultural Development Web Site. The issue not addressed by making comparisons like this is maybe property taxes are too high in all jurisdictions.
Calgary’s Mayor Naheed Nenshi argues that our current property tax system is unsustainable. CTV’s W5 recently interviewed Mayor Nenshi about this issue and have posted the video on their web site. The 10 minute video is well worth watching.
“If you were going to design the worst way to fund government,” he said. “You’d come up with something like property tax. We’ll probably hit a breaking point for most cities in Canada within the decade, where we simply won’t be able to fund our operations using only the property tax.”
The challenge with property taxes is that they are tied to the value of an asset rather than an ability to pay, so people with lower and middle-incomes are hit hardest by these increases. Making changes to Municipal funding, though, requires the co-operation of the provincial, and possibly federal, governments.
Larger infrastructure projects by municipalities often get funded by cost-sharing with senior levels of government. This sometimes works well but not all projects can get funded. Based on a recent article in the Maple Ridge Times “River Road Residents vent frustration at roadwork”, it would appear that both local residents and municipal engineering staff are in agreement that sidewalks and traffic calming should be installed but the project was turned down twice for grant funding by federal and provincial governments.
With the potential increase in TransLink funding via property taxes (see the Maple Ridge News “Mayors okay TransLink tax hike on leap of faith”) to fund much-needed transportation improvements, there will be significant discussions around appropriate levels of property taxes over the next couple of years. I would suggest that those discussions not be limited to TransLink funding issues alone but appropriate funding for all levels of government. There is only one taxpayer and governments need to co-operate to ensure that taxpayer does not suffer from too heavy a tax burden, while retaining sufficient sustainable funding to deliver necessary services.
I’d like to hear your thoughts on what changes we can make to create an appropriate balance between taxation and delivery of services. Please Contact Me or add your comments below.
Link: Maple Ridge Financial Plan 2011 – 2015 (pdf)