Residential Tax Class will have a 4.95% municipal tax increase

Yesterday with little fanfare the Vernon City Council passed a tax bylaw in which the Residential Tax Class will have a 4.95% municipal tax increase (excluding fire which will make it higher) and the Business Class will have a 6.6% municipal tax decrease.

The additional $275,000 that was added to the residential class taxes and deducted from business class taxes (Yes, Virginia, there is a Santa Claus as they got an additional $92,000 from the Utilities class and $44,700 from Industrial class to make their total reduction $411,700) came without looking for other revenue sources so as to ensure the Residential Class increase was maintained at the original 2% level.

Last year by this time the council had sliced and diced sliced and diced $630,000 of unbudgeted fee revenue in 2006. This money was divided into $300,000 in Capital Grants Matching Res., $130,000 into a Social, Environmental, Agriculture Studies Reserve and $200,000 into the Transit Expansion reserve. They talked about using some of it for a residential tax decrease but concluded that it would be imprudent.

The last years surplus estimated at $700,000 before the budget adjustments where it was decided to pay for the OCP review $230,600 from the existing $700,000 in 2006 operating surplus. This leaves only $469,400 (700,000 - 230,600) in the 2006 year end surplus (approx.) for the council to slice and dice. This could be used to lower the business tax ratio WITHOUT resorting to increasing the taxes extracted from Residential Property owners.
The 2007 Council has not yet established the 2006 surplus for public viewing but I feel that my figures are conservative. (Time will tell). They have yet to have their annual slicing and dicing but I look forward to what unforeseen item suddenly get priority !

I have yet to see any substanial discussion of this by the mainstream media as they seem to have accepted the spin that this is a necessary leveling of the playing field so as to attract businesses and have very little effect on the residential taxpayer.

Each year I fight with the Watchdog who tries to lower the business tax ratio and it seems when I win in the election years my residential taxes are maintained but not lowered and when he wins in non election years my residential taxes are raised. (It's like the guy who goes to the track hoping to break even because he needs the money.)

I agree that business taxes should be adjusted but the real way to level the business tax playing field is to pursue Coun. Beardsell's resolution to raise the $10,000 property tax exemption to $50,000 so as to benefit the smaller businesses. I know that he accepts my reasoning that tax ratio changes should not come solely at the expense of the residential class when there are surplus funds (Which are in effect excess taxes) from the previous year. Other Councillors should have pursued the surplus money trail especially the knowledgeable ones on the Finance committee.

Next year the utility tax review that resulted in a long overdue adjustment to this class after a 15 year hiatus where Vernon has the lowest effective Utility tax rates in the Province should provide the cushion for any further business tax rates lowering WITHOUT having to look to the beleaguered residential taxpayer.