Fairness was the watchword for both supporters and opponents of Flin Flon’s special services levy as city council gathered feedback on the contentious fee.
A public hearing last Friday, Feb. 13 drew more than 20 residents but no clear consensus on whether the levy should last another four years.
“To suggest that what you’ve proposed here is fair is blatantly untrue,” long-time resident Tom Lindsey told the hearing, hosted by council at city hall.
Citing rising taxes on his modest home, Lindsey turned the tables on councillors who believe the levy is needed to spur high-end home construction.
“While you’re concerned about the high-end people perhaps not building the $300,000, $400,000 homes in Flin Flon anymore,” Lindsey said, “you should also be concerned about the backbone of the community – the majority of people that live in the middle.”
Lindsey said he worries about the affordability of his home and that if he is forced to downgrade to an apartment, it may not be in Flin Flon.
Evenly distribute
The levy aims to more evenly distribute Flin Flon’s tax burden by raising taxes on low-end homes and reducing taxes on high-end homes. It is applied the same way to businesses.
Council imposed the levy for the first time in 2014 and is now seeking regulatory approval to continue the fee in 2015 through to 2018.
While local landlord Greg East took a hit under the levy – taxes rose on each of his approximately 20 Flin Flon properties – he told council he favours the fee.
“I think this system is better than the one that was existent before,” East said, “where we had people in some of the high-end homes paying as much as $600 or $700 a month for the same basket of services that some people were paying $350 a year for.”
East said he is willing to pay more to shoulder his share of “making our community work.”
But for Skip Martin, the fairest means of taxation remains the traditional model in which taxes are based solely on the value of each property.
Martin, a former city councillor, poked holes in the argument that some residents living in low-end homes can easily afford to pay more.
“The city has no way of knowing…which low-end home has an income that can afford the increase and which one is the person on the single pension that can’t afford the increase,” Martin said.
Martin said a high-end homeowner who can no longer afford his taxes can always downsize, but those priced out of low-end homes do not have that luxury.
“Their option is maybe moving into an apartment or under a bridge,” said Martin.
Since the levy also applies to the commercial sector, Martin said some of the tax load once carried by businesses now falls onto homeowners, including those at the low end.
Bruce Reid, a retiree who supports the levy, challenged Martin by pointing out that under the previous tax system, nearly a quarter of Flin Flon homes paid less than $300 a year.
Due to other charges, Reid said, high-end homeowners did not actually get a tax cut in 2014.
Blair Sapergia, who owns two high-end homes, said all homeowners must “at least pay their way” and that this was not always the case under the old system.
Sapergia said adjustments should be made for poor residents who cannot afford tax hikes, adding he is willing to pay more to make up for those people.
But even some Flin Flonners with good incomes are under financial pressure.
Mike Besler, a downtown resident, told council the combination of the levy and reassessments on his “mediocre home” are placing him in a bind.
“I’m an HB worker and even I’m struggling to figure out how I’m going to be paying the new taxes,” Besler said.
Throughout the hearing, councillor and deputy mayor Tim Babcock, chair of the meeting, clarified and defended the levy.
Work in progress
Babcock said the levy is a work in progress and that should it receive approval, the city will look at ways to improve it.
One potential change is the readjustment of business taxes given that some businesses received a tax break under the levy. This readjustment, like the levy itself, would need regulatory approval.
Babcock didn’t know how long the approval process would take but added that council was not given the option of applying for the business tax readjustment at the same time as the levy.
Mark Kolt, chief administrative officer for the city, mounted his own detailed defence of the levy.
“If too many of your high-end taxpayers move away, even if the low-end taxpayers are enjoying a break in the meantime, eventually [low-end taxpayers] are going to be called upon to pay a bigger and bigger share of the total pie,” Kolt said.
“Creighton has got a $750 [minimum tax]. The one that’s being proposed here is $600. Once one of the communities starts playing this game, in time stuff starts shifting there. We’ve seen that already happen. We have had very little high-end residential development in Flin Flon for some time now, and this measure is proposed in part to help try to stabilize that trend.”
The levy works in two steps. First, all property tax bills are slashed by 14 per cent. Next, a uniform fee – $598.58 in 2015 if approved – is applied to all properties.
The end result: high-end properties pay less and low-end properties pay more. Since tax bills are reduced before the levy is applied, the fee itself would not increase anyone’s taxes by $598.58.
According to the city, in 2014 the highest tax increase paid by a homeowner due to the levy was $340. The unrelated trend of rising property values also drove up property taxes.
The city’s application to the Manitoba Municipal Board, which has the final say on the levy, seeks permission to boost the fee as much as three per cent in each of 2016, 2017 and 2018.
In the end, last week’s hearing did little to solve the question of whether the public endorses the levy.
When Babcock called for a show of hands, he counted eight attendees in favour of the levy and eight against. The rest were either undecided or did not share their views.
Opponents of the levy are to make their views known to the Municipal Board by Mar. 18. Information is available on the board’s website or by calling 204-945-2941.
