"Cowardice asks the question...is it safe? Expediency asks the question...is it politic? Vanity asks the question...is it popular? But conscience asks the question...is it right? And there comes a time when one must take a position that is neither safe, nor politic, nor popular but one must take it because it is right." ~Dr. Martin Luther King

Saturday 2 April 2011

The Big Push

Town staff are obviously hoping Tuesday's general committee meeting will see approval of the 2011 budget.

Mr.Elliot has invited Council members to submit items for adjustments to the budget. He will assemble them in a document  to be dealt with by the chair. If memory serves, it will be Councillor Gaertner's turn in the chair on Tuesday.

 An aspect of concern to me is how an increase is presented for public consumption. We are told what it means in pennies each  day. Total increase is presented separate and apart from the Region's and the Board of Ecucation increase.
The object being to ensure the public understands who is responsible for what.

The purpose is to save the town harnless  from blame for the other two insitution responsible for increasing taxes.

As though there has been a real effort on the part of the municipality to keep taxes as low as possible. To paraphrase; to ensure there is no fat in the budget.

It's not true. By any estimate,fat abounds in the budget.

Last week a resident forwarded an account of a small business tax experience in Aurora  and how it has shrunk his enterprise. I reproduce it  below.

There is a businessman in Aurora by the name of Jamie and he is trying to find a new location for his transmission repair business in Aurora however most landlords apparently do not want to accommodate an automotive use for some reason. If you know of a landlord, or if anyone in the town's economic development department feels that they can assist this gentleman please note his contact as follows:
Aurora Transmission Inc
25 Industry St, Aurora, ON L4G 1X6 (905) 726-3736
He is looking for 1,500 to 1,800 sq ft of industrial space in the range of $1,500 to $2,000 per month (i.e. approx $13 psf per annum, gross). He used to employ two other people however his increased costs have not allowed him to support additional employees in recent years.
Tax increases over the years may have been an issue. When he first started in 1992 the taxes were approximately $2,700 per annum (+/-) and they are now approximately $8,500. This increase appears to have out stripped inflation over the same period of time (as far as I can tell), but I'm not sure if these numbers make sense given that the increase seems to suggest an average commercial tax increase of 6% over the past 19 years which is considerably more than I would have expected. I thought there were years of zero increases and most residential increases have been less than 4 or 5% as far as I know, so I'm not sure if these numbers are correct.
The above noted inflation calculator suggests that inflation has increased average costs by 41% over the time period in question (less than 2% inflation annually). The costs of the town's commercial taxes would have averaged 6% if the numbers below are in fact accurate.
This is not an exact calculation but here is an idea of how the costs have increased.
year Base year taxes 6% approximate annual increase Revised Taxes
1 (1992)  $            2,700.00  $                   162.00  $            2,862.00
2  $            2,862.00  $                   171.72  $            3,033.72
3  $            3,033.72  $                   182.02  $            3,215.74
4  $            3,215.74  $                   192.94  $            3,408.69
5  $            3,408.69  $                   204.52  $            3,613.21
6  $            3,613.21  $                   216.79  $            3,830.00
7  $            3,830.00  $                   229.80  $            4,059.80
8  $            4,059.80  $                   243.59  $            4,303.39
9  $            4,303.39  $                   258.20  $            4,561.59
10  $            4,561.59  $                   273.70  $            4,835.29
11  $            4,835.29  $                   290.12  $            5,125.41
12  $            5,125.41  $                   307.52  $            5,432.93
13  $            5,432.93  $                   325.98  $            5,758.91
14  $            5,758.91  $                   345.53  $            6,104.44
15  $             $                   366.27  $            6,470.71
16  $            6,470.71  $                   388.24  $            6,858.95
17  $            6,858.95  $                   411.54  $            7,270.49
18  $            7,270.49  $                   436.23  $            7,706.72
19 (2011)  $            7,706.72  $                   462.40  $            8,169.12

1 comment:

Grace Marsh said...


I'm sorry but this spreadsheet is very misleading.

The change in property tax payable by a local business has many factors that are beyond the Town's budgetary increase and the obvious Regional budget changes.

During the time period shown on the chart there were at least 5 Province wide reassessments and the taxes are affected by each reassessment.

Also in 1998, the seperate business tax was eliminated and combined with the property tax. This had a big effect on the total property taxes, however in 1999 legislation was introduced to protect business properties from large increases (capping/clawbacks) a a result of those changes. This is all Provincal legislation.

On top of that the Region has jurisdiction over other tax policies that greatly effect buiness taxes such as the tax ratios that determine the tax weight each class bears along with the amount of the clawback to be assessed.

I'm sure eveyone's eyes are glazing over by now, but my point is, the Towns budget is unfortunately just one small factor in the overall business tax levy.