Response to Tim Bousquet's article in "Reality Bites", March 27, 2008
Thanks for your interest in HRM's Tax Reform initiative and taking the time to cover the topic in your recent issue of the Coast. I am writing to correct some of the misimpressions that readers might be left with.
The article stated that, "Council therefore tasked the committee to divorce tax bills from assessments and instead tie them to services provided." In fact Council asked the Committee to seek alternatives to the existing assessment-based system. It did not mandate a service-based system. (See the Committee's terms of reference at: www.halifax.ca/taxreform/TaxReform-TermsofReference.html.) In fact, Council has yet to debate the Tax Reform Committee's suggestions. Rather, feedback from the public in meetings and surveys suggested the public preferred a system more closely tied to services but one that also allowed for ability to pay.
It is interesting to note that Mr. Bousquet believes in the "shared concerns of community." That puts him on the same page as the Tax Reform Committee. In its statement of "Values" it makes clear that "municipal services may benefit everyone and that to the extent all benefit, all should share in the cost of the service." In fact, shared benefit is at the heart of this proposal. To give several examples:
All residents within driving distance of a local recreation facility would share in those costs. These residents, regardless of where they lived in HRM, would all pay the same amount for the service. This is different from the status quo where every community outside the core has its own area rate to pay for a facility. Often this provides hardship to smaller communities. What we are talking about here are the small local facilities, not the rinks, pools or the Metro Centre. Everyone will pay for these.
Bus Service would be shared far more broadly than is now the case. Everyone will contribute something to the regional backbone of the service (Metrolink, Ferries and Rural Express Transit). More localized service will be shared amongst those homes within walking distance of a bus stop. Again, this is a distinct change from the status quo where each community outside the core had to pay their own, often making the service unaffordable.
Solid waste would be shared on an equal basis. Mr. Bousquet is correct in saying that some areas like North Preston have higher collection costs than others. However, the committee rejected charging such communities a higher fee. Instead, there will be one common fee across the municipality for those with the service. Those who don't have the service (such as apartments) will no longer pay.
While the draft proposal before the public may initially shift more tax onto apartments, it makes clear that these buildings should be taxed at a lower rate than single family homes. Moreover, the Committee believes that the current tax system based on property assessment disadvantages renters. Unlike home owners, renters are ineligible for the assessment cap. Without reform there will likely be an ongoing shift in the tax burden onto apartment buildings. The Tax Reform suggestions include principles supporting apartment buildings.
Concern for the ability of many people to pay for their taxes is a critical element of reform. As Mr. Bousquet explained in his article, right now a middle income individual might pay very high taxes (as high as 10% of income) or very low taxes (under 1% of income). For people with comparable incomes this makes no sense as a tax regime. The suggested reforms will place these individuals in a comparable situation with respect to what share of their income goes to tax. The Committee is also proposing enhanced relief for lower income earners including extra relief for those with children. Few low income earners should pay higher taxes under reform. If the municipality is ever provided with income tax power the Committee is suggesting it be used to ensure higher income earners make a larger contribution to municipal revenues based on their ability of pay
Lastly, there's the Deed Transfer Tax. It's not connected to municipal services or ability to pay and needs a complete re-think. Stories abound of young people struggling to buy a home and having to put several thousand dollars on their line of credit just to pay this tax. The Committee is concerned that this part of the system doesn't treat homebuyers and younger people fairly. In the end all of society suffers if the young are disadvantaged. I guess we'd say this issue should be a "shared concern of the community." Rather than panic over who might have already paid it, we'd like to look at options for dealing with this tax such as phasing-it out.
In closing, the public should be clear that these ideas are for public discussion, to confirm whether the Committee is on the right track. The public and Council will have the ability to accept, change, redefine or reject the options being presented. As ideas come in and the debate goes on, we expect we will refine these proposals. We encourage all those who can to attend the upcoming public meetings, be they homeowners, tenants or business people to attend. As well, anyone is welcome to provide their views by phone (490-4886), letter or e-mail (firstname.lastname@example.org).
By Mark Gilbert, Vice-Chair,