Homeowners to get hit hard by tax increase

An estimated 650,000 residential property owners around the Lower Mainland will dig deeper than ever this year, with average increases in municipal taxes and utilities ranging from $30 in Langley City to $159 in West Vancouver.

In addition, taxpayers will pay varying levies assessed by other bodies for such things as transit, schools and hospitals.

With inflation running at two per cent for B.C. last year, the hike exceeds four per cent at the top end in real terms.

Vancouver experienced the biggest jump at 6.35 per cent, and was followed by North Vancouver City, Richmond and Maple Ridge, all of which recorded a six-per-cent hike or greater.

However, in Vancouver, the politicians who ultimately determine taxation rates were unrepentant.

Coun. Peter Ladner, chairman of the city's finance committee, said Vancouver aims to keep budget increases at the level of inflation, but said voters had indicated they could go higher this year.

The average Vancouver property owner's bill for municipal taxes and utilities rose from $2,078 in 2005 to $2,210 this year.

"We went out to the citizens, we had focus groups, surveys and public meetings, and the response we got was that people could tolerate a tax increase above inflation if they were getting better services," Ladner said.

"They value services very highly, and were willing to pay more to get them."

He said much of the increase was created by salary increases for municipal employees, most of them in the two-per-cent range, although police and fire increases average 3.5 per cent.

The increase would have been close to four per cent had council not decided to take some of the tax burden off commercial property owners, Ladner said.

"We shifted some taxes from the non-residential to residential to give our small businesses a break, because they're still getting taxed at a rate six times higher than residences," he said "They screamed for relief and we gave them some.

"Without that, it would have been just barely over four per cent."

One of the beneficiaries of the city's spending of its residential property-tax dollars is the Lore Krill Housing Co-op on West Cordova St., which houses about 140 people. Some pay market rents, while others receive provincial subsidies.

President Wes Hosler said the co-op and its members get good value for their taxes.

"The city has a history of supporting co-op housing so I think our relationship with them is quite good," he said.

Hosler said co-op housing units in Vancouver benefits from reasonable leasing rates on the city-owned land they occupy.

"If we didn't get the leases from the city, it's quite doubtful there'd be as many co-ops as there are because the price of land in Vancouver is astronomical, and if we had to buy out the land and build the co-op, it wouldn't be economically viable."

In Richmond, which had an average increase of 6.1 per cent, the big-ticket item was savings for future improvements of the municipal water system, said revenue manager Ivy Wong.

"The property-tax increase was relatively low," she said. "It was the utilities that were high in Richmond. This year. we decided we were going to put [some money] away."

She said the savings are part of a long-term financial plan which was drawn up several years ago. Richmond aims to match the increase in the consumer price index (two per cent) plus one per cent for its annual budget, she added.

However, such arguments did not impress Sara MacIntyre, provincial director of the watchdog Canadian Taxpayers Federation.

"Total municipal revenue in all of B.C. has increased 44 per cent over the past four years," she said. "Local politicians are not adequately adjusting their mill rates to ease the bite of property taxes for homeowners.

"What are we getting for that money? Has there been any increase in your municipal services? No. Year in and year out, it's just a tax-grab by local politicians."

The federation is circulating a petition calling for a property tax cap throughout the province and has more than 1,000 signatures, she said.

She added the CTF has asked the provincial auditor-general to expand the role of that office to conduct value-for-money audits on public projects to see if taxpayers are getting a good deal.

MacIntyre said municipal politicians should be the last line of defence against fiscal mismanagement of public money, but are approaching their task the wrong way.

"They set their wish-list for the year, and then they calculate their tax rate based on meeting their wish-list expenditures," she said. "This does not provide any incentive for fiscal restraint or fiscal responsibility."

She said politicians should determine how much money is available to them, and limit their spending accordingly.

Ralph Forsyth, acting mayor of the resort municipality of Whistler, which has the lowest average tax increase in the Lower Mainland at 2.5 per cent, said councillors there made a point of keeping a tight rein on spending.

"I think it's belt-tightening on the part of our municipal staff, " Forsyth said. "I think a large part of it is our municipality embracing the concept of entrepreneurial government."

He said Whistler's municipal transit system has the highest cost-recovery of any transit system in the province, as does the municipal sports complex.

Demographer and urban futurologist David Baxter noted there is no reason for taxes to go up simply because property values rise or municipal populations expand.

"If you have more people, you have to provide more services, but you also have a bigger tax base because you have more property to tax," he said. "So population growth alone doesn't drive up property taxes.

"It will drive up total expenditure, but it shouldn't drive up expenditure per property."

He said what drives tax increases is a desire for increased public services.

"If we want more cops on the street per capita, we're going to have pay more and that's going to come out of our property tax," he said. "It's purely a political decision."

Although taxpayers can expect to see their taxes rise by the rate of inflation in order to stay even, any amount over that reflects the will of the elected officials. he said

"Anything above that, the reason is that we, the electorate, have asked our municipality to spend more money on our behalf," he said. "Or we haven't asked them, but they're going to do it anyway."

(prepared by Maurice Bridge/Vancouver Sun)