Flin Flon city council is proposing to extend a cost-dispersing tax shift that Mayor Cal Huntley views as “the lesser of two evils.”
Next month council will host a public hearing on whether to continue the special services levy – which raises taxes on low-end homes and lowers them on high-end homes – through to 2018.
Huntley, who expressed concerns about the levy before becoming mayor, said he still has some reservations.
“I believe that there might be some negative impact with regards to the uptown area and the lower income areas. That hasn’t gone away,” he said. “But it’s sort of like the lesser of two evils.”
Huntley said his first choice to ensure a more equitable distribution of taxes is a base tax, something already enacted in Creighton, but the Manitoba government
prohibits it.
Following last year’s one-year trial period for the levy, council proposes not only to renew the fee, but also to boost it by nine per cent in 2015 and up to three per cent in each of 2016, 2017 and 2018.
One rationale for the increases, Huntley said, is that lot amalgamations have left fewer taxable properties in Flin Flon this year compared to last.
Then there is the fact that council wants the levy to fund not just fire and police protection as it did last year, but also capital costs for the fire department.
Huntley said he has heard some opposition to the levy, but not a lot. Still, he said council is willing to reconsider the proposal if there is intense opposition.
“If the place was jam-packed [for next month’s hearing] and everybody was totally resistant [to] it, certainly [myself], in a leadership capacity, would have to sit back and say, ‘Hey guys, maybe we should rethink this,’” he said. “And that would be a conversation for [council] to have.
“[But] my expectation is that it’s pretty much status quo, same as last year, and my expectation would be that it allows us to move forward, and that’s probably the direction that we’ll take. So I don’t expect any big surprises.”
If council formally endorses the proposal beyond the hearing stage, the final say on its approval rests with the Manitoba Municipal Board, a quasi-judicial body that okayed the levy for 2014.
If council again receives approval for the proposal, the levy will rise nine per cent in 2015. Future raises will be in line with the Consumer Price Index, often predicted to be three per cent a year.
If three per cent increases proceed, by 2018 the levy will be about $100 higher than it was in 2014, but there will still be much variance in how the fee impacts individual homeowners.
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 levy has proven divisive. Proponents say it is necessary to avert unduly high taxes on high-end homes and spread the tax burden more fairly, while opponents fear that it targets residents with limited incomes.
Blunting such concerns, to an extent, was the fact that a portion of some tax increases on low-end homes was covered by the Manitoba government’s homeowner grant.
According to former mayor George Fontaine, the way the levy was implemented in 2014 created a tax break for businesses.
Without providing specific figures, Fontaine said last year that businesses “saved a lot” with the difference “swallowed” by residential taxpayers.
Had he been re-elected, Fontaine hoped to do away with the business tax break and have businesses pay taxes similar to their 2013 rates.
Huntley said the proposal now on the table does not address that issue, in part because of time limitations and in part because changes to the business rate could yield further complications.
“The business tax is an unresolved issue, and that’s also one of my concerns going forward,” he said, adding that council will work to resolve the matter in the coming years.
The public hearing on the proposed levy extension will be held Friday, Feb. 13 at 7 pm at city hall council chambers.
