Council accidentally passes industrial tax cut

By Scott Neufeld The Vernon Daily Courier http://www.dailycourier.ca/
Vernon city council voted Monday to raise the tax ratios for light industry and utilities - or did they? Council passed a motion apparently intended to increase the tax ratios for light industry and utilities. However, by passing the motion as stated in a city memo, council may have actually significantly lowered the tax rates for industries ranging from breweries to funeral homes to gas stations. The recommendation stated "that the finance committee consider changing the Tax Distribution Policy by increasing the light industry and utility class rates to 3.2 and 6.5 respectively over a two-year period beginning in 2007.“ But the current tax rates are 7.0 for light industry and 8.76 for utilities, meaning council actually reduced the rates rather than increased the ratio as intended."It was not correct in the memorandum that went to council," said Coun. Barry Beardsell, the only councillor to vote against increasing the tax rates to a lower figure. "I think they have to change it and they better change it in a hurry.“ Coun. Juliette Cunningham, who sits on the finance committee, said that the intention was to raise the tax ratios. "It was just a mistake on the agenda," she said. "It was supposed to be ratio not rates." By mixing up the tax terminology inserting the word rates instead of ratios, the city may have opened up an opportunity for light industries and utilities to dispute their taxes. A similar mistake occurred in 2005 with the tax mill rates, Beardsell said. He said it allowed taxpayers to go back and dispute their tax rates, although no one did dispute them. Beardsell said he did not point out the mistake during the council meeting because he had already made his comments on the issue. He had argued that the change in the utility ratio was not large enough and that it should not be instituted."There seemed to be some anxiety on the part of the mover and seconder to get it moving and passed." Though he was not sure how the mistake occurred, Beardsell said that his fellow councillors should have noticed the error. "I guess where it disappoints me is at the council level," he said. "If you don't understand something just say, "I don't understand,' it's not a terrible thing." Tax rates are calculated based on $1 of tax for every $1,000 of property value. This means that utilities currently pay roughly $8.76 per $1,000 of value on their property. The tax ratio is calculated by comparing tax rates to the residential property tax rate of 3.1. A utility tax ratio of 6.5 means the utility is 6.5 times higher than the residential tax rate.When the Vernon Daily Courier pointed out the error to deputy city administrator Marg Bailey, she discussed the matter with finance manager Rob Mayne. After the discussion Bailey said a motion to amend the minutes will be brought forward at the next council meeting to change the word rates to ratios. She said that every effort will be made to get the wording correct in the tax distribution bylaw due in April.