Halifax staff propose 5.9% property tax increase

[Keith P.]

https://www.cbc.ca/news/canada/nova-...ease-1.6256527

Halifax staff are proposing a 5.9 per cent property tax increase for the next fiscal year, which will be debated by regional council on Nov. 23.

The increase is made up of 2.9 per cent to cover increased service costs, and 3.0 per cent for a proposed Climate Action Tax.

The increase would raise an additional $400 million annually for municipal coffers. This translates into an annual tax increase of $121 on the average Halifax home, assessed at $262,700. Commercial taxes would rise by an average of $2,553, based on an average business assessment of $1.46 million.

According to a fiscal statement issued Friday, inflation is having a "considerable" effect on municipal finances, with a 40 per cent increase in fuel costs, a $2.9 million increase in the RCMP collective agreement, and $4 million in other contractual increases.

Money is also needed to redevelop sites such as the Halifax Forum, the Windsor Street Exchange and the Mill Cove Ferry, plus improving 13 "multi-modal transportation corridors" around the municipality.

The Climate Action Tax would fund the purchase of 60 electric transit buses, and refurbish an electric bus garage. It would also help municipal buildings be more energy efficient.

HRM Council needs to be sent to rehab en masse to kick their spending addiction.

[Dartguard]

Originally Posted by Keith P.

https://www.cbc.ca/news/canada/nova-...ease-1.6256527




HRM Council needs to be sent to rehab en masse to kick their spending addiction.

How is a 3% Climate action Tax going to reduce China and India's emissions?
I agree with Keith, its time to take away the piggy bank. What is Trudeau's tax increase going to be to pay for his profligate spending? Oh boy..

[Keith P.]

Originally Posted by Dartguard

How is a 3% Climate action Tax going to reduce China and India's emissions?
I agree with Keith, its time to take away the piggy bank. What is Trudeau's tax increase going to be to pay for his profligate spending? Oh boy..

The thing that really galls me is that none of this is a surprise. Yet for the last few years Council has been spending like drunken sailors on all sorts of feel-good and generally useless initiatives, giving out raises, adding bloat to the bureaucracy, and not doing one thing to prepare for the inevitable rainy day. Simply shameful.

[someone123]

The numbers seem wrong and the inflation story is confusing. Aren't housing prices going up much faster than inflation? Shouldn't this cause assessments to go up and dramatically raise HRM revenues given a fixed mill rate? Are they raising the mill rate on top of this? $400M additional revenue does not sound right.

I'm not opposed to the idea of climate change initiatives but where is the coordination? If we really care about climate change isn't the best thing for the federal government to implement a carbon tax to "price in" HRM emissions? Canada has a tax like this already, and we need only debate what the price per ton of CO2 should be (set it at the cost of sequestration, spend the revenues from that tax on sequestration, and all activity is net zero). With a correctly set carbon tax you don't need triplicate baroque climate measures, you just need the provinces and municipalities to look after their costs which they do already. Of course, the simple solution sadly doesn't give politicians much opportunity to be seen as climate warriors.

One thing I wonder is why HRM hasn't done more on affordable housing. We keep hearing councillors talk about how this is an important issue to them, though they sometimes pass the buck to the province and complain about the province. Do HRM councillors think this issue is in hand now, and there are no more people who might need to live in tents or those huts? What about housing affordability in terms of rising property tax bills paid for by people who are already stretched (this includes tenants)? I would say this is much more squarely within their ability to solve than climate change is.

[Saul Goode]

Originally Posted by someone123

The numbers seem wrong and the inflation story is confusing. Aren't housing prices going up much faster than inflation? Shouldn't this cause assessments to go up and dramatically raise HRM revenues given a fixed mill rate?

Yes. The 2022 assessments will be out very soon. They'll be based on market values as of 1 January 2021 and it will be very surprising if they haven't increased very substantially as that date was right in the midst of the mid-pandemic market explosion.

One thing I wonder is why HRM hasn't done more on affordable housing. We keep hearing councillors talk about how this is an important issue to them, though they sometimes pass the buck to the province and complain about the province.

I'm not an apologist for HRM governance, and certainly not for any individual councillors, but when they say that housing is a provincial responsibility, I'm not so quick to call it buck-passing. Tthey're 100% correct, legally speaking. That's not to say that the city can't (or shouldn't) undertake its own affordable housing initiatives, but primarily it's the province which needs to step up.

[Corker]

Originally Posted by someone123

The numbers seem wrong and the inflation story is confusing. Aren't housing prices going up much faster than inflation? Shouldn't this cause assessments to go up and dramatically raise HRM revenues given a fixed mill rate? Are they raising the mill rate on top of this? $400M additional revenue does not sound right.

I'm not opposed to the idea of climate change initiatives but where is the coordination? If we really care about climate change isn't the best thing for the federal government to implement a carbon tax to "price in" HRM emissions? Canada has a tax like this already, and we need only debate what the price per ton of CO2 should be (set it at the cost of sequestration, spend the revenues from that tax on sequestration, and all activity is net zero). With a correctly set carbon tax you don't need triplicate baroque climate measures, you just need the provinces and municipalities to look after their costs which they do already. Of course, the simple solution sadly doesn't give politicians much opportunity to be seen as climate warriors.

One thing I wonder is why HRM hasn't done more on affordable housing. We keep hearing councillors talk about how this is an important issue to them, though they sometimes pass the buck to the province and complain about the province. Do HRM councillors think this issue is in hand now, and there are no more people who might need to live in tents or those huts? What about housing affordability in terms of rising property tax bills paid for by people who are already stretched (this includes tenants)? I would say this is much more squarely within their ability to solve than climate change is.

The CBC article is based on a report going to the Budget Committee:
https://www.halifax.ca/sites/default...211123bc06.pdf

The report indicates that staff are anticipating the city will require a 2.9% increase in the average property tax bill based on known or expected incremental costs and initiatives. If property values in HRM increase by the same 2.9% there would not be any increase in the tax rate. Since market rates would seem to indicate that values have increased by much more than 2.9% the tax rate may very well decrease. The impact on any individual property owner will of course depend on how much the assessment of their property changed, particularly since the increase in values has been different in different parts of the city.

In addition to this, staff are recommending a new 3% tax to tackle HRM specific initiatives related to climate change such as electric vehicles, net-zero buildings, multi-modal transit corridors and other initiatives.

This is the first step in the budget setting process. The final tax rates will likely be somewhat different and could include initiatives to address the housing crisis once the budget gets to council and they start to debate it.

[Saul Goode]

[QUOTE=Corker;9457056]The CBC article is based on a report going to the Budget Committee:
https://www.halifax.ca/sites/default...211123bc06.pdf

If property values in HRM increase by the same 2.9% there would not be any increase in the tax rate.

Says who? That's only if only if HRM decides not to change the tax rate - it's not automatically the case.

Since market rates would seem to indicate that values have increased by much more than 2.9% the tax rate may very well decrease.

It could, but again, that's totally HRM council's call.

The impact on any individual property owner will of course depend on how much the assessment of their property changed, particularly since the increase in values has been different in different parts of the city.

I'd bet next week's paycheque that there's not a single property in HRM whose market value hasn't increased by more than 2.9% since last year's assessment.

[MonctonRad]

Originally Posted by Saul Goode

I'd bet next week's paycheque that there's not a single property in HRM whose market value hasn't increased by more than 2.9% since last year's assessment.

How about out in Necum Teuch?

[Keith P.]

We need to not talk about the HRM tax RATE since that figure is essentially meaningless. With property assessments being the main driver of revenue for the city, the tax RATE is derived from those figures in conjunction with HRM's thirst for revenue. For decades HRM council members have got up on their hind legs at budget debate and brayed about how they kept the tax RATE the same or only changed slightly, as if they were doing a good thing. The reality is that property tax BILLS have gone up every year despite the growth in the number of housing units in HRM and hence the number of property tax accounts. Raising taxes in that environment is like a store raising prices because they have more customers and blaming it on the need to install more checkout lanes.

[Summerville]

Originally Posted by Saul Goode

Yes. The 2022 assessments will be out very soon. They'll be based on market values as of 1 January 2021 and it will be very surprising if they haven't increased very substantially as that date was right in the midst of the mid-pandemic market explosion.

If memory serves me correctly, the base date for assessments will be a date (can’t remember) in December 2019. It’s a 2 year lag. I’m not sure if we’ll see the crazy market increases from the pandemic.

[Saul Goode]

Originally Posted by Summerville

If memory serves me correctly, the base date for assessments will be a date (can’t remember) in December 2019. It’s a 2 year lag. I’m not sure if we’ll see the crazy market increases from the pandemic.

No. The base date for 2022 is 1 Jan 2021.

The base date has never been in December. It's always been 1 Jan, though the year has varied. For a long time the lag was three years, then reduced to two, and now one, which it's been for several years now. If you have a 2021 notice of assessment, check it. You'll see that the base date was 1 Jan 2020.

That all varies by jurisdiction. For example, in Ontario, the 2022 base date is 2016, so it'll be several years before their assessments reflect the current boom.

[someone123]

The CBC article appears to have changed substantially now since Keith's quote was first posted, e.g. $400M a year is gone.

Originally Posted by Keith P.

We need to not talk about the HRM tax RATE since that figure is essentially meaningless.

I don't think it is meaningless, since the property tax base, which is a measure of a portion of the wealth of the city, matters too. As others have said the assessments don't all go up equally, and can go up from expanded construction and renovations. In theory, the city's revenues can expand while some property tax bills decline. Inflation also matters. If inflation is 4% and HRM collects 3% more taxes, their real tax rate is down slightly. I don't think it would be that hard for an article about municipal taxes to clearly lay out all of these concepts.

[someone123]

Originally Posted by Saul Goode

That's not to say that the city can't (or shouldn't) undertake its own affordable housing initiatives, but primarily it's the province which needs to step up.

To clarify I'm talking mostly about acute housing needs and "street order" questions like what to do with the people living in huts in parks. The city is building some trailers in Dartmouth (I remember suggesting this a while back and I think there were some complaints about it not being good enough housing, but huts or tents are worse). But I've also seen more huts go up, along with play-by-play posts on Twitter from people who seemed to delight in antagonizing the police.

I don't live there and don't know what the reality on the ground is like. Mostly I'm wondering if or when the housing options (plus mental health and addictions or drug related policies) could be sufficient that HRM would say sorry, everyone has options, and we will no longer tolerate tents or huts in parks. I think this issue is so important it that if the province fails to handle its part the municipality should do something. Kind of like how they jumped in with $40M during the great Bedford hockey rink ice time shortage of '08. The city has the capacity to act.

[Saul Goode]

It's also intriguing that PVSC didn't publish preliminary 2022 assessment figures this year. In recent years they've typically done that in September or October as kind of a sneak preview for property owners.

There's one obvious possible reason we could speculate about...

[Half-Axed]

Originally Posted by Saul Goode

There's one obvious possible reason we could speculate about...

That being that we're all @$%#ed? Can't wait to see my new assessment...and bill.

My assessment changed by less than one percent last year. The biggest jump was 6% in 2012.

Somehow I think 2022 will put 2012 to shame. And because it's a year behind, 2023 may be worse.

[Saul Goode]

Originally Posted by Half-Axed

That being that we're all @$%#ed? Can't wait to see my new assessment...and bill.

Somehow I think 2022 will put 2012 to shame. And because it's a year behind, 2023 may be worse.

Although Keith doesn't want to talk about it, I'm going to mention that the obvious response would be for HRM Council to cut the tax rate (which, yes, they've done before) to soften the blow rather than simply looking the other way and pocketing the unearned windfall.

[Keith P.]

Originally Posted by Saul Goode

Although Keith doesn't want to talk about it, I'm going to mention that the obvious response would be for HRM Council to cut the tax rate (which, yes, they've done before) to soften the blow rather than simply looking the other way and pocketing the unearned windfall.

They seldom do cut the rate except in election years. Even last year, with what I believe was record growth in the total assessment roll, they still nudged the tax RATE upward slightly, which I thought was pretty ballsy on their part. But for decades, with growth in the assessment roll and the values of most properties, HRM would simply take that extra revenue while publicly trumpeting that they did not raise taxes. What they actually did was keep the tax RATE stable, but property owners were still receiving larger tax BILLS, and HRM raked in windfall revenue. If there is no pressure to exercise fiscal responsibility, and the attitude among some that increasing spending at the rate of inflation is acceptable, no wonder HRM wastes so much public money.

[Keith P.]

Originally Posted by someone123

The CBC article appears to have changed substantially now since Keith's quote was first posted, e.g. $400M a year is gone.

That is very interesting. It appears Mr. Julian, the CBC reporter, got a call from one of the dozens of Comms folk in HRM's employ suggesting some changes to the story, and the CBC complied. Yowza.

I don't think it is meaningless, since the property tax base, which is a measure of a portion of the wealth of the city, matters too. As others have said the assessments don't all go up equally, and can go up from expanded construction and renovations. In theory, the city's revenues can expand while some property tax bills decline. Inflation also matters. If inflation is 4% and HRM collects 3% more taxes, their real tax rate is down slightly. I don't think it would be that hard for an article about municipal taxes to clearly lay out all of these concepts.

The rate is derived from the amount of the assessment roll and HRM's desired total revenue. So it is totally a function of the other two things, of which HRM has control of the revenue part of the equation. In and of itself, however, the rate is meaningless year over year as those other two items are the variables that determine it. All that should matter to the property owner is the amount of the tax bill.

[Saul Goode]

Originally Posted by Keith P.

They seldom do cut the rate except in election years. Even last year, with what I believe was record growth in the total assessment roll, they still nudged the tax RATE upward slightly, which I thought was pretty ballsy on their part. But for decades, with growth in the assessment roll and the values of most properties, HRM would simply take that extra revenue while publicly trumpeting that they did not raise taxes. What they actually did was keep the tax RATE stable, but property owners were still receiving larger tax BILLS, and HRM raked in windfall revenue. If there is no pressure to exercise fiscal responsibility, and the attitude among some that increasing spending at the rate of inflation is acceptable, no wonder HRM wastes so much public money.

True. All true. I fully understand how that stuff works, and nothing I've posted actually contradicts anything you've said (you may have noticed that I even used the phrase "simply looking the other way and pocketing the unearned windfall").

I just hope you have a prescription for an effective anti-hypertensive before the 2022 assessment notices come out.

[IanWatson]

Originally Posted by Half-Axed

That being that we're all @$%#ed? Can't wait to see my new assessment...and bill.

My assessment changed by less than one percent last year. The biggest jump was 6% in 2012.

Somehow I think 2022 will put 2012 to shame. And because it's a year behind, 2023 may be worse.

Your actual taxes paid would be subject to the cap though, no?