The City is ramping up its lobbying of the provincial government on property tax reform.
There's an interesting report on municipal tax policy from the City Manager in next week's
Council agenda (starting on page 84). It recommends the following:
Quote:
Resolved that:
1. Common Council requests that the Province vacate the levying of provincial property taxes to provide tax room for municipalities;
2. Common Council requests that the Province change legislation to provide municipalities control over setting tax classes and tax rates;
3. Common Council requests that the Province end the assessment freeze as quickly as possible;
|
This would be on top of a previous Council resolution pertaining to the taxation of machinery and equipment (currently exempt in NB):
Quote:
|
RESOLVED that Common Council make a request to the Province to remove machinery and equipment exemptions from the Provincial Property tax legislation. Furthermore, if the Province is unwilling to remove machinery and equipment exemptions from the Property Tax legislation, the Province provides a transfer payment to municipalities in lieu of lost municipal property tax revenues due to the exemptions put in place by the Province of New Brunswick.
|
The report analyzes the impact of two separate scenarios:
1. The elimination of provincial property tax levies (and with it, the unconditional grant), and additional flexibility for municipalities to set differential tax rates for different land uses (commercial, light industrial, heavy industrial).
2. In addition to the changes in Scenario 1, the inclusion of machinery and equipment in property tax levies.
In the first scenario, the City projects an additional $8 million in revenue that could be used to reduce the overall property tax rate - indeed, its proposed rate structure would reduce the tax burden on all classes except heavy industry.
Scenario 2 would be even more of a game changer:
Quote:
|
If machinery and equipment was fully assessed and taxed in Saint John, and assuming the value of machinery and equipment was between $1 and 2 Billion Dollars, the Property tax rates would be reduced significantly for all classes of customers. The residential rate could drop to between 0.934 and 1.187; commercial tax rate would range between 1.940 and 2.464; light industry would rates would range between 2.299 and 2.920; and Heavy Industrial rates would range between 2.963 and 3.763.
|
These are significant rate reductions and would immensely improve our competitiveness vis-a-vis the suburban communities. The catch, of course, is that under this scenario heavy industry carries a
much higher tax burden. However, the distribution of tax burden would be comparable to that of Strathcona, AB, home to two oil refineries and where machinery and equipment is taxed.
Lots of other interesting numbers in the report, including comparative stats on tax base growth (ours is sluggish) and property tax burden-to-income ratios (ours is particularly bad considering the propensity of lower incomes along with a higher tax rate), as well as the top assessed properties in the city:
The realist in me is expecting a TJ editorial panning these proposed reforms tomorrow. I'm also expecting the province to probably ignore the City's requests in favour of the easier status quo. But I'm glad some analysis is now out there on these issues - better than having never looked into it at all.
Prev
Linear Mode
