How do our taxes rate?

By Martha WickettOBSERVER STAFF Dec 27 2006 http://www.saobserver.net/
Compare: Salmon Arm’s increase not out of line with others. Salmon Arm’s proposed five-per-cent tax increase for 2007 is not unusual, based on what other municipalities are facing. Although population differences, major projects undertaken and items included in the rate can make comparing tax rates as meaningful as comparing apples and oranges, a cursory survey shows Salmon Arm is not alone. Keith Grayston is Kelowna’s financial planning manager. He said his staff has been contacting larger municipalities across Canada to compare tax increases. “Across Canada, there’s an average of seven to 7.5 per cent. So there are significant increases for all municipalities.” In Kelowna, the proposed increase that staff is recommending to council for 2007 is 3.47 per cent. This year the increase was two per cent and, in 2005, 1.95 per cent. “A lot of it has to do with construction costs that are considerably higher than they have been,” he said, noting that some of the costs were incurred during the latter portion of 2006 and are now stretching into 2007. He also notes that employment levels are high, so higher wages must be paid in order to retain workers. Kelowna’s population is 111,000, while Salmon Arm’s is about 16,000. Like Salmon Arm, increased policing costs are being felt in Kelowna. Unlike Salmon Arm, the average price for a single family detached house in Kelowna in 2006 was $348,000. The owner of such a house paid $1,453 in municipal taxes in 2006, Grayston said. In Salmon Arm in 2006, the owner of an average $160,000 house would have paid $931.98 in municipal taxes, which includes a $60 transportation parcel tax. Monica Dalziel, Salmon Arm’s director of corporate services, warns against comparisons. She notes that with larger populations, there are more people to pay for services and projects. She also points out that many varying factors influence taxes. Salmon Arm, for instance, includes 200 kilometres of roads that must be maintained.Comox on Vancouver Island is a little more similar in size to Salmon Arm. It has a population of 12,000 but an average house price in 2006 between $225,000 and $250,000. Don Jacquest, the town’s director of finance, said tax increases have been held to 3.4 per cent over the past few years, but rose to four per cent in 2006.“We may have to reconsider a push higher in future years,” he said, explaining that the town is experiencing considerable demands for infrastructure and services. A taxpayer with an average house in Comox would have paid about $2,150 for municipal taxes in 2006 before the homeowner grant, but that would have included a parcel tax of $285 for water and sewer as well as a utilities charge of $354 for water, sewer and garbage. In Salmon Arm, the utilities are billed separately. In Sicamous, a municipality with a population of 3,500, the taxpayers are facing a much higher hike than those in Salmon Arm. The projected increase for 2007 is 14.4 per cent, while last year the increase was 18 per cent. In 2008, a 20-per-cent hike is anticipated. In Salmon Arm in 2007, taxpayers are facing a five-per-cent increase, while this year the increase was 2.5 per cent and, in 2005, it was just one per cent. However, here’s where a version of apples and oranges once again enters the picture. In Sicamous, a 14.4-per-cent increase is estimated to be an increase of $60 for an average single-family dwelling, while in Salmon Arm, a five per cent increase for a $160,000 home would amount to close to that - about a $50 increase. In Penticton, with a population of 35,000, the tax increase projected for 2007 is 2.5 per cent. In 2006, it was also 2.5 per cent and, in 2004, it was 3.8 per cent. “Our council has basically said that they’re trying, wherever possible, not to do more than the rate of inflation,” said Penticton’s municipal collector Lorne Raymond. He said a lot of the city’s infrastructure such as the sewage and water treatment plants are in place. One big project Penticton is undertaking is the South Okanagan Event Centre, priced at $56.8 million. He said the province is expected to provide $49 million towards the project, thanks to its funding for destination casinos. He said Penticton would be looking at a substantial tax increase were it not for the provincial money. In Vernon, with a population of 34,000, this year taxpayers paid a 1.47 per cent increase. For 2007, a preliminary budget has not been set yet, but staff are recommending a seven-per-cent hike, while council is shooting for an increase of 2.8 per cent.