by Ed Cowley, freelancer
The multi-family residential sector in Morinville achieved the rejection of a proposal which would have increased their tax rate progressively to 20% higher than single-family homes; however, now all taxpayers have to advise council of their feelings regarding giving tax dollars away in an attempt to attract development through a scheme that is supported by no documentation and which has no justification whatsoever for being included in a taxation policy.
Any such giveaway of taxpayer dollars to attract development should only be considered under the proper program and expensed against the department giving the funds away. It should not be a manipulation of taxation where everyone is entitled to be subject to the same assessment and tax rate rules [specific to each category of property type].
During the Sept. 13 council meeting, it became clear that residents of multi-family homes had made their point of view clear to council and administration, but the council reaction was as bad as the concept had been. When administration recommended that concept in the taxation policy not go forward, at least one council member laughed while noting it wasn’t a popular idea, another seemed to express bitterness in a confusing monologue. Not one speaker acknowledged that the proposed super-sizing of the multi-family residential tax rate was ill-conceived and offensive.
Alas, as one bad idea was abandoned, another appeared when several additional sections materialized on the new draft of the proposed bylaw.
Administration recommended, “that Council consider tax incentives for development of new high-density residential properties.” This was proposed as “reduction of municipal property taxes over a set period of time. For example, 75% reduction in year one, 50% in year two, 25% in year three.”
That same level of “incentive” was recommended for the existing commercial and industrial classifications of property, which have had a lesser total incentive for years. Although funds have been awarded by the town under the commercial/industrial program electors have not been advised which developers received funds nor the amounts.
In all three of the above instances—the abandoning of the multi-family tax rate surcharge and the two tax incentive programs—no documentation was presented to council to show the effectiveness of the proposals.
Regardless, a taxation policy should not be used for any purpose other than to set a policy on taxation. If council wants to give funds to developers, that should be an expense under economic development or council public relations. The tax rate and assessment value should be the only considerations in the taxaton policy and on the bill to taxpayers. It should not be used as a trojan horse to carry grant programs that are actually part of the town’s operating expenses. The taxation policy deals with the revenue stream, not town program expenditures.
So why should residents of Morinville even care if the town offers incentive programs to commercial, industrial and high-density residential properties regardless of whether those incentives are transparent or even effective?
Because it is your money the town is proposing to give away. You have been paying the full tax rate for years, even decades, and instead of taking those tax dollars to fix your sidewalk or reduce your tax bill, the proposed incentive program takes thousands of tax dollars and gives them back to developers. It impacts all residents, including renters, because the landlord pays taxes from your rent. Giving incentives to one group means other taxpayers have to make up the difference.
By the way, who do you think has the highest income to afford the full property tax bill—you or a developer? The taxation policy will be coming back to council again, so contact the Mayor and councillors now and let them know whether you support giving a tax break to developers. Better yet, let council know that an incentive program should not even be part of a taxation policy. Don’t assume common sense will prevail and just sit back until the policy is approved because the town doesn’t make mistakes, and it will take years to correct once it is approved.
Commercial, industrial remain target to super-size tax rate but council willing to slow the annual hikes
The commercial and industrial sectors remain the target for super-sizing the tax rate to 150% of the residential tax rate. This concept remains in the proposed taxation policy, however, most of council indicated that the recommended annual increase of 10% should be done over a longer timeline (instead of going from the current 110% to 150% in the next four years).
Coun. Scott Richardson and Stephen Dafoe both voiced concern about the impact a 10% surcharge (beyond any residential tax rate increase) could have on businesses at this time. Many have struggled through years of COVID restrictions and are now dealing with the impact of inflation. Dafoe said he supports the split tax rate but questioned whether now is the time to increase the split. Richardson also noted that with internet shopping and the close proximity to the Cities of St. Albert and Edmonton, if Morinville businesses have to raise their product prices, they will lose the local clientele, and the town could face a decline in the number of businesses.
Coun. Rebecca Balanko commented that council has to remember the degree to which Morinville businesses are owned by local residents.
Coun. Jenn Anheliger stated that businesses have been paying below the market level while residential property has been shouldering the tax burden. She did, however, agree that the pace of the increase in the split tax rate could be slowed from the proposed 10% hike annually.
Coun. Maurice St. Denis noted that through the lens of what the town did last year (5% tax rate increase) he finds it hard to increase the rate split this year.
Mayor Simon Boersma commented that as a business person, you put taxes on the books as a line item, and when you add it into the sales, it will create inflation.
The voice of the business community—the Morinville Chamber of Commerce—has not attended a meeting of council to state a view on the proposed taxation policy.
The policy proposal also contains a hike in the taxation rate formula for vacant residential and vacant commercial/industrial property.
Earlier in the meeting council accepted an online survey conducted by the town which indicated that taxpayers are willing to accept a tax hike to maintain or increase services, but also had a sector indicate they prefer not to see taxes increased even if that means a cut in services.
Administration pointed out to council that more education was needed for the public because some surveys wanted services maintained or increased but also stated they wanted no increase in taxes and the two statements are not compatible. No councillor suggested that those residents may want the town’s efficiency increased. The town staff in attendance also appeared unaware of the efficiency option—there were half a dozen present at the time.
With a survey participation rate under 2% it was acknowledged there is no statistical validity to the survey. However, the town plans to use it as part of the 2023 draft budget consideration.
