Restraint is required

December 24, 2009 6:00 PM Vernon Morning Star: (orginal letter)

I received permission from the author to post his original letter to editor that apparently was edited for length but in his opinion left out the best part of his argument "That information concerned the 27% tax increase of Vernon General City Taxes in 2009." (Unedited letter below.)

Two recent articles in the Morning Star concerned the high cost of municipal taxes. In an article dated November 8/09, Mayor Lippert responded to a report by the Canadian Federation of Independent Business that claims that the City of Vernon is the eighth worst in B.C. for spending surpassing population growth. Mayor Lippert suggested that the data was skewed and did not take into account the distribution of (property) taxes requisitioned by other jurisdictions that the City is responsible for collecting. In an article dated November 29/09 it was reported that Tolko Industries was seeking tax relief as the property tax burden has become so considerable that it’s impact could effect Tolko’s ability to maintain it’s operations, and therefore to continue to employ many local residents. In this article, City of Vernon property taxes were just one of several jurisdictions’ property taxes that Tolko is responsible for.

For approximately 5 years (until mid 2008) the North Okanagan experienced a high rate of growth, and it’s citizens should have expected a reasonable increase in taxes, as property values increased substantially, and infrastructure demands grew. That is the price of progress. But when progress slows, and our local, provincial and national economies dive into negative growth territory to a degree that has not been experienced for a very long time, and values of property, goods and services tumble, should it not follow suit that property taxes also reduce? Though such a premise sounds logical, I am very doubtful that the citizens and businesses of Vernon will realize any substantial reduction in their property taxes in this coming year.

For the year 2009, council originally stated that it was going to attempt to keep property taxes near the same level as 2008, and stated they were doing so as a result of the economic downturn. Instead, on my property tax statement the breakdown of taxes levied shows that General City Taxes increased by 27% over 2008. The total of other jurisdictions/services taxes (School, Hospital, Library, BC Assessment, Parks & Recreation, NORD, etc.) reduced by not quite 2%, and ‘Fire Protection – City’ dropped a whopping 99.5% making the total property tax bill for all levels of government/services a 2.47% increase from ’08. As a small business operator and a business property owner located in Vernon, my business property taxes increased 86.2 % in the five taxation years from 2005 to 2009. This increase does not represent chump change either. Business taxes are, on a dollar for dollar of property value basis, a multiple many times more than residential property taxes. During that time I brought to the attention of the mayor, the councillors and the CFO (of the day) the dramatic surges in taxes that were occurring. Though most were sympathetic and some were shocked, tax increases continued unabated each year. Soon into 2010, our elected officials at the City of Vernon will, with the assistance and guidance of salaried staff, once again begin discussing and debating and ultimately deciding what the City budget for 2010 will be, and subsequently what tax increase they shall pass on to the citizens of Vernon in order to fund the operations. I, for one, emphatically urge Council to demonstrate restraint; there are many of Vernon’s citizens and businesses who are – in spite of their best efforts – not just spectators but reluctant participants in the economic calamity of the past two years. The request for tax relief by one of Vernon’s largest corporate enterprises, along with the concerns expressed repeatedly by the DVA, the Chamber of Commerce, and individual business and residential property owners should present a crucial, unambiguous message to Council: the City of Vernon has gone too far with tax increases; it’s time to pull in the reins.

No matter where and how the taxes collected are distributed (regardless of whether the revenues are wisely or poorly spent), the tab is paid by the tax payer, not by the finance committee. The message from the tax payers should be ringing in Council’s ears, and hopefully in these next years, Council - and the bureaucrats who advise them - take it to heart. Over 2,500 years ago the Chinese sage Lao-Tzu wrote: “To lead the people, walk behind them”. The advice is timeless. Those that have been chosen to lead, by the people, must be supportive of, and accountable to, and therefore “behind” the populace they serve.

Corky McMechan