Business tax ratio time tomorrow at COW meeting

Agenda Agenda Package (p.19-30 re 2007 General Tax Rates)

The COW meeting tomorrow morning at 8.40 will debate and set the Business Tax Ratio for 2007. The Manager of Finance has given 2 different Scenarios and 3 different options for each. The Business Tax Ratio presently sits at 3.05 under Scenario 1 (Phasing in of Light Industrial and Utility ratios over 2 years) and could be decreased to 2.8 through manipulation of monies between the tax classes. In Scenario 2 (full implementation of increased Light Industrial and Utility Ratios in 2007). The Business Tax Ratio under this scenario starts at 3.02 and could be manipulated down to 2.7.

The manipulation downward (good for business bad for residential tax payers) in either scenario starts with the use of the monies received by raising the amount payable from RESIDENCES by $100,000 and giving this money to businesses reducing their tax ratio to 2.98 or 2.93 (depending on scenario decided upon).

To manipulate the business ratio down below the 2006 ratio of 2.82 option 3 in both scenarios raises taxes required for RESIDENCES by $275,000 and giving this money to businesses reducing their tax ratio to 2.80 or 2.77 (depending on scenario decided upon).

Basically each $275,000 added to taxes of residential taxpayers lowers the business tax ratio by .25. To reduce from 3.05 down to 1.0 could easily be achieved by taxing the Residential Taxpayer an additional $2,255,000
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The Manager of Finance has presented his options. It is up to council to decide upon these possibilities. However there are other monies and considerations that should be looked at before the decision is made:

• There is $70,000 in Grants in lieu of taxes for BC Hydro (an Utility) that is not part of the above calculations.
• Furthermore there will be a rather large increase in this category when the 21.7 million Control Centre comes on line in 2008 (Hopefully). This money in excess of $400,000 may help lower the Business tax ratio.
• The excess profit from the Airport (A business) (estimated at least at $90,000 ) could be used for business tax ratio adjustment if it is not dedicated to the Airport reserve account if taxiway Charley is agreed to be built in 2007.
• Last years surplus estimated at $700,000 before the budget adjustments and now will come in at around $400,000 has not yet being sliced and diced by this council and could be used to lower the business tax ratio WITHOUT resorting to increasing the taxes extracted from Residential Property owners.

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Don Quixote Further Rant (Will the D.V.A., Chamber of Commerce or City Council stand up for the small businesman ??? ) (full article)

I've been pushing a simple plan to help lower the property tax burden on the small business owner in this area. It takes a leadership role to champion the cause and persuade the Provincial Government to change its legislation re the property tax exemption already given to all business from $10,000 to $50,000 (or any other figure agreed upon). Hopefully the DVA or the Chamber of Commerce will push Council to bring this idea forward to the UBCM Conference in the fall.

The best way to lower the tax on businesses is to lower the tax on all Residential Taxpayers and the business will benefit because of the Ratio Leverage.