Tuesday, April 07, 2009

It's all in the eye of the beholder ! or In the Case of taxes in 2009 It all depends on whose ox is being gored.

Click on Image to Enlarge:
The Law Of Unexpected Consequences (LUC):

When Vernon City Council decided to integrate the Fire Taxes into the general tax levy for 2009 it created unexpected consequences in the municipal tax system.

3 houses on the East Hill who are neighbors are getting very dissimilar and varied tax treatment. (Remember that their assessments have not changed.). While in the business class the Banks are getting tax DECREASES at the expenses of grocery stores and gas stations. (See table)

In the vacant land category all 3 classes of Residential, Business and Farm Land will see an identical 26.63% increase.

Are you on the right side of this year's tax shift. To find out simply use the following formula to determine your City's Taxes for 2009 as the budget presently stands:

  • Your Assessment divided by 1000 multiplied by either 2.4786469 for Residential, 7.66328 for Business or 0.68659 for Farm property (round off and up to first 2 digits after decimal point to make it easier)
  • Compare your answer to your 2008 taxes for the City's Portion only. (You will have to add the General City Taxes PLUS the Fire Protection Levy to get last year's total.)
  • Will you pay more or less ?
  • Should Fire taxes be shifted to land and improvements?
This is a zero based tax shift from taxing Fire Costs on improvements only (Your house or garage) to taxing Fire Costs on BOTH improvements AND LAND. The city will collect NO MORE in total taxes but who pays how much will change dependent on your land value in relationship to your property value when compared to the average.

This is a micro view of a sample of properties. A larger sample of properties have been given to Vernon City Council members. A Macro view of the effect on the 2 previous fire specified areas (Okanagan Landing and The Rest of the City) was presented by a citizen at the recent budget input meeting.

This tax shift effect does not address the size of the tax increase to the average house as portrayed in the budget as 4.82% (before claimed NORD Credits of 2.83%). Changing this tax base back to improvements only will not changed the total tax required by the City this year. That can only be done by reducing some of the expenditures or recognizing revenue that has not been acknowledged in the budget. Accurate costing of salaries would also help to lower tax increase.

According to the Financial Timetable April 14 – Adoption of the Financial Plan AND initial readings of the Rates Bylaw.

These figures are only for the City's share of taxation and mill rates for 2009 are as calculated by the Budget handout Document at Public Hearing. Tax ratios are assumed to be same as last year.

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