It’s time for this week’s confession that will leave you thinking I’m crazy: barring something completely unforeseen (ie: a massive windfall in grant revenues), I expect municipal property taxes to go up every year.
Now, you could argue that I’m conditioned to expect a property tax increase, because Estevan has had a property tax increase each year since 2007. Those increases haven’t always been staggering, but it still adds up when it happens year after year.
So imagine my surprise when it was announced last week that property taxes would remain the same in the city of Estevan in 2019. And to add to the surprise, there wouldn’t be an increase in utility rates or consumption rates (which many consider a form of back-door taxation), or an increase in the infrastructure levy, either.
Nobody wants to pay taxes. They take up nearly 50 per cent of our average income. For many homeowners, property taxes likely represent one of the biggest forms of taxation we’ll face.
But when it comes to municipal revenues, property taxes represent easily the biggest share of the pie.
This year in Estevan, property taxes will account for a little more than $17 million in revenues. The total revenues for the city will be around $25.3 million. So it’s about two-thirds of the city’s revenue stream.
(User fees are a shade under $4 million, while provincial funding, including municipal operating grants, would be a little more than $4.2 million).
So while we grumble about the property taxes each year, a property tax increase is needed to keep pace with the cost of doing business. When property taxes don’t go up, the city has to slash operating expenses, or it has to make tough decisions on infrastructure projects.
The city has decided not to resurface King Street from Kohaly Avenue to Cundall Drive this year. There are other reasons for this decision (the presence of underground infrastructure makes that project much more expensive) but there are fewer revenues for the city than there would have been if property taxes would have gone up.
I would have gladly seen my property taxes go up three per cent if that money was specifically earmarked for part of that project.
The big-ticket items in this year’s capital budget will be Phase 1 of the renovation and expansion of the police station, and renovations to the Power Dodge Ice Centre.
(As an aside, thank God the city has opted to renovate and expand the police station, rather than build a new one. That was one expense we couldn’t afford, especially at a time of considerable uncertainty in the community. Most will tell you the EPS needs more room to work with, especially now that it has specialized units. Few will argue in favour of a new police station).
While you can criticize council for some of the decisions they have made (I do it on a fairly regular basis), they actually have done a pretty good job this term of handling the finances. A few years ago, the picture was pretty bleak. The debt was high, the cash was low, and it wasn’t unheard of for the city to seek out short-term borrowing to pay the bills until property tax revenues came in.
Now they have a healthy amount of cash in the bank, they have worked hard to pay down the long-term debt and reduce the net debt (although there is still a lot of work remaining), and the city was able to have a one per cent property tax increase last year, and no increase this year.
It’s a stark contrast to what a lot of other municipalities are facing.
Remember two years ago, when the city opted for an eight per cent tax increase because of the sudden loss of hundreds of thousands of dollars from the provincial government? (Compounding the situation is that tax increase came in a reassessment year, when property values were swinging wildly). Other communities decided not to make big changes to their budgets, and to defer decisions to a later date.
And now those communities are facing steeper property tax increases in 2018 and 2019, while the city has been able to almost hold the line. It’s taken some time, but the city was proven right to take the path that they did, even if it wasn’t a popular decision.
Am I happy my property taxes won’t go up this year? Of course I am. It’s one increased expense in my own budget that I won’t have to worry about.
But I have no problem with the city increasing my taxes by a reasonable amount (ie: the cost of doing business, or the rate of inflation) if they can show me that my taxes are going to good use.
I know I’m not the only one, although I often feel like I’m in the minority.
It’s when taxes increase, especially by a significant amount of money, and people feel like we have nothing to show for it, that we really get ticked off.