Don Quixote won the tax ratio battle. After nagging, bugging and irritating council for a couple of years I managed to get the Council to instruct staff to bring a report back to address the tax ratios of the Light Industrial and the Utility Class after neglecting this important area for over 10 years.
This report from the previous Finance Manager proposed raising the lt. industrial ratio to the business class ratio of 2.82 (from 2.26) and to raise the Utility class ratio from 2.82 to 3.5. This would produce additional City Revenue of $48,756. It also correctly asked the proper question with respect to this additional revenue:
a. Reduce the tax increase that would otherwise be required in 2007? OR
b. Reduce the business taxes only, to lower the residential/business multiple?
OR c. Reduce the residential taxes only, resulting in a higher res./bus ratio?
This report was debated by council and the decision was to request a new analysis of the situation by the new finance management team to be tabled in Oct./06
On Oct 16/06 the new report recommended to the fiance committee and ultimately passed by the full council by a 6-1 vote on Oct 23 intended to raise the ratio on the lt. Industrial Class from 2.26 to 3.2 and the Utilities ratio from 2.82 to 6.5 . This would raise $147,000 (146,462) in revenue. This report used a more detailed analysis of ratios across the province and demonstrated that our ratios in these classes were indeed lower than they should be and had been for at least10-15 years !
Because of an error the ratio ultimately was changed to Lt. Ind. Class from 2.26 to 3.5 and Utilities from 2.82 to 6.2. This adjustment would bring in $169,949 per year.
As this ratio increase will be phased in over 2 years moving the light industrial rati0 from 2.26 to 2.88 in 2007 and 3.5 in 2008. The Utility class ratio will increase from 2.82 to 4.51 in 2007 and 6.2 in 2008.
The new taxes in 2007 will be ($169,949/2 =) $84,975
The new taxes in 2008 on the $21.7 million new BCTC control centre will be $507,823 !
They also voted down my suggestion to only move the Lt. Industrial Ratio to the business ratio.
The council also had the opportunity to instruct the staff on how these tax increases will be sliced and diced. They declined to do so at this time. If they were made revenue neutral the extra half million in 2008 would reduce the business tax ratio by 9% if applied solely to reducing the business tax class. This decision has been put off until the spring when the final tax rates are set.
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