Businesses unfairly taxed: councillor
Mill rates remain unchanged despite budget shortfall
Shane Magee
Northern News Services
Saturday, May 23, 2015
SOMBA K'E/YELLOWKNIFE
A city councillor says the city has shifted a portion of the tax burden onto businesses without discussion and has called on council to have a more thorough debate about the issue in the future.
Adrian Bell: City councillor says council needs to debate tax ratio between residential and commercial properties. - NNSL file photo
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A document provided by Coun. Adrian Bell to media and other councillors with changes to the mill rates over the last decade shows a sharp change in the ratio between commercial and residential properties in 2014, a change he said council never discussed.
"We did not have a conversation where we said, 'Oh, the business community is doing so well that we think it's justified to increase commercial rates much more than residential rates.' We didn't have that conversation," Bell said.
It means commercial properties are paying a higher percentage of taxes than residential.
Businesses paid 1.76 times the residential rate in 2000 compared to 2.13 times the residential rate in 2014 according to the data he provided.
Figures from city administration show businesses represent 53.53 per cent of the tax burden while residential taxes represent 45.59 per cent. The remainder is covered by other property categories.
Bell said council needs to have a philosophic talk about the level of taxes each sector should pay.
"In my opinion we're making it up as we go along," Bell said after comparing how mill rates levied for school boards have remained constant while the city's rates have been in flux.
Coun. Bob Brooks said Bell is right, that there was a debate back in 2007 that ended with council placing a greater burden on commercial properties, something that in retrospect appeared unwise given the global market crash in 2008 that sent the country into recession.
"I certainly agree that we should have this philosophical debate when we set the mill rate," Brooks said.
While Bell proposed amending city policy to ensure there's discussion, councillors generally opposed that. Bell suggested administration should look at the tax burden ratios of other municipalities so the city can have a more thorough debate about it in the future.
Mill rates unchanged
Bell's comments came during a municipal services committee meeting Tuesday when councillors said they won't increase the 2015 mill rates to cover a small tax revenue shortfall. That maintains 2014 mill rates and the zero per cent tax increase promised last fall.
Two changes to the tax rolls between when the budget was set in December and April meant the city was short $52,000 from what it expected to collect.
First, final assessment roll growth was greater than expected, adding $89,000 to the coffers.
Second, the rezoning from commercial to residential in Kam Lake reduced revenue by $141,000.
That left committee to choose between a couple options - either have that $52,000 be absorbed by funding cuts or by increasing taxes by 0.02 per cent to cover the shortfall.
Administration recommended it be tasked with absorbing the cost this year to maintain taxpayer expectations of a zero per cent increase.
Although the committee did recommend no change from 2014 rates, individual bills may still vary because of changes to property assessments.
Council will vote during a special council meeting Monday at noon on the tax levy for both the city and the school boards.
