The City of Flin Flon will impose its controversial special services levy on homes and businesses for the next four years following approval from regulators.
In a letter received Wednesday, the Manitoba Municipal Board said the levy, designed to more evenly distribute municipal taxes, will continue until 2018.
Coun. Colleen McKee, chairwoman of the city’s finance committee, was pleased with the decision.
“I think the special services levy is a step forward for community sustainability,” she said. “Adopting this approach will allow competitiveness with larger homes in surrounding communities by ensuring comparable taxes, thus creating an even playing field.”
McKee added that the levy restores balance to the system since all residents will pay the same amount for the fundamental services of police and fire protection.
The levy has the effect of lowering taxes on high-end homes and businesses and raising taxes on low-end properties.
The aim is to partially narrow the tax gap between valuable and modest properties, which in many cases amounts to thousands of dollars per year.
But critics such as Skip Martin liken the fee to Robin Hood in reverse, upping tax bills for those who can least afford it.
“I just think fundamentally that’s not fair,” said Martin, a former city councillor, after learning the levy had been approved.
Martin prefers the traditional taxation model that is based solely on the assessed value of a home. The levy, by contrast, applies a portion of the tax bill uniformly to all homes, regardless of value.
The levy will total $599 in 2015, but that amount is charged to homes and businesses only after their overall tax bill has been reduced 15 per cent – the percentage of city spending that goes toward police and fire protection.
Council also has the ability to boost the levy by as much as three per cent in each of 2016, 2017 and 2018.
Council pursued the levy as an alternative to a base tax on properties, a tool the NDP government has long withheld from municipalities.
At a hearing before the Municipal Board in May, the city presented figures showing that a house worth $200,000 pays nearly $4,600 a year in taxes in Flin Flon without the levy in place. A house of the same value is charged just over $3,000 in Creighton and nearly $2,700 in Denare Beach.
With the levy in place in 2015, the Flin Flon homeowner will save $675 for a total tax bill that is $888 higher than in Creighton and $1,238 higher than in Denare Beach.
On a $100,000 home, however, the levy brings the Flin Flon home to within $393 of Creighton and $293 of Denare Beach.
Approval of the levy paves the way for council to finalize its 2015 budget, which was presented to the public in May but put on hold until a decision on the levy came.
