Parcel Taxes and the RDN
[This excellent piece of work concerning the introduction into this, and following years, of a parcel tax to be paid to the Regional District of Nanaimo, was presented to and at Council on April 18. Ms. Bryce has given her permission to publish her presentation in full. It deserves our attention and our comment.]
PRESENTATION REGARDING PARCEL TAXES AND BYLAW NO 7228
I am Denise Bryce and I have lived in my home on Hunter Street in the Townsite area for almost 50 years. I am here tonight to present my concerns regarding parcel taxes and Bylaw No. 7228, which if adopted will increase our parcel taxes each and every year from 2016 to 2022 and beyond. We have been paying this parcel tax since 2006. To my knowledge, this is the first parcel tax that has ever appeared on our City’s property tax notices and I hope it will be the last.
I will present my requests at this time in the event that I run out of time: Then I will follow with my arguments.
I Respectfully Request that Council
- delay final adoption of this bylaw and hold the line on any further increases to this parcel tax;
- request that the Regional Parks and Trails Plan 2005-2015 be updated to reflect the specific goals and targets for the future and to account for the proposed increases. (It does not appear that there is a New Updated Plan available?);
- request that a complete Regional Services Review be done to ensure that the City has received its fair share from this Parks and Trails Scheme over the past 10 years;
- request that the RDN provide an information report to Council and the taxpayers to provide a full accounting of where these funds have been expended, what parks have been purchased and what improvements have been made and in whose neighbourhood;
- inquire as to what calculations the proposed increases were based upon, especially without an existing plan; and,
- do not give consideration to adding any further parcel taxes to the City’s tax bill.
Parcel Taxes – Background
Parcel taxes are often used instead of, or in combination with user fees to recover the costs of providing local government services. They can be levied on any property that has the opportunity to be provided with the benefit of a service regardless of whether or not the service is being utilized. For example, if a septic system is in use on a property but a sewer system is available in the neighbourhood, the parcel can be charged a parcel tax for the sewer service on the basis that the parcel could be connected to the sewer system in the future. If the property cannot be serviced by the sewer, and no benefit can be realized, the charge cannot be applied.
A parcel tax can only be applied to properties that may receive a particular service. It cannot be used to recover costs such as general local government administration costs.
The Problem with Parcel Taxes
Parcel taxes have long been recognized as an extremely regressive form of taxation. Under the parcel tax scheme, each qualifying plot of land in a jurisdiction is taxed the same amount. The owner of a large 3 million dollar piece of land pays the same tax as the owner of a smaller less valuable plot. There is no consideration given to the occupant’s property value or his ability to pay. It is similar to a sales tax that hits lower-income people harder than the higher-income folks.
Generally in Canada, we have decided progressive taxation is a fairer way to go, the wealthy pay a little more because they can afford it. The poor pay less because they can’t afford it and they need to eat. Parcel taxes hit lower income people harder and are almost laughable to the rich folks.
In the past, municipalities actually tried to get rid of, or at least to reduce the use of parcel taxes because they were deemed to be unfair. Unfortunately, recently, many cash strapped municipalities who are searching for ways to pay their bills are now resorting back to regressive taxation measures in order to do it.
This parcel tax method of increasing revenue also deceives the public into believing that they are holding the line on taxes. Actually, they are not, because these taxes are not factored in to the total until after the property tax calculations are done. In actual fact, they represent solid tax increases to the owners. So, happy day, parcel taxes are making a comeback.
Okay, what is done is done – Let’s move on
The Regional Parks and Trails Plan was introduced in 2005 and the decision was made to pay for its implementation via, the parcel tax. It made its first appearance on our tax notices in 2006. My guess is that implementing a parcel tax as a way to pay for the plan was the best way to phase it in without an uproar. Apparently, back in the day, we were told that it was a great value for only $10. The brochure was glossy and impressive.
Nanaimo already pays for parks and trails within its own boundaries via property taxation. Keep in mind that this bylaw provides funding for the purchase and improvement of parks and trails outside the boundaries of our City.
We all love parks. Vancouver Island is known to be one big park. We pay for national parks in our Federal Taxes, Provincial Parks in our Provincial taxes, City of Nanaimo parks in our property taxes, and now, Regional District Parks, approximately 22 of them, which stretch from Mount Arrowsmith Trail and Deep Bay in the North to the Nanaimo River in the South via parcel taxes. These are not neighbourhood parks.
Nanaimo is not alone. The municipalities of Parksville, Qualicum, Lantzville and the 8 Electoral areas (A to H) in the Regional District also pay for these parks via a parcel tax. That is a whole lot of cash flowing into the cookie jar. One wonders how in the world we survived before 2006. Perhaps each municipality/electoral area actually paid for its own.
Now the Numbers.
I was advised that approximately 37,000 Nanaimo taxpayers are required to pay this parcel tax. I have done some rough calculations based on this number and have found the following:
From 2006 to 2015, Nanaimo taxpayers contributed approximately $4,144,000 to this fund. If the parcel tax increases are given the green light tonight we will contribute another $4,403,000 to this scheme from 2016 to 2022 not including “beyond”. Total contributions from 2006 to 2022, from Nanaimo alone, would be approximately $8,547,000.
Remember, this money is being used to finance capital costs for Regional Parks and Trails.
In addition, there is another levy on your tax notice that simply says Regional District Parks. Apparently this money is paid as per the invoice from the RDN, and calculations based on the same number of parcels, from 2006, to 2015, indicate that the taxpayers of Nanaimo have contributed approximately $2,728,010 , to that levy, which also continues to increase. I am not clear what that is used for but perhaps it is used to pay administration costs, which cannot legally be paid for via the parcel tax scheme.
Personally, I do not feel obliged to pay for parks and trails all over the Regional District. I feel that considering the economy in our area, we could leave this money in the pockets of the taxpayers who could put it to much better use. Yes, we all love parks, but there is a limit to what we can afford to pay.
I would like to see this parcel tax scheme come to an immediate and abrupt end, but as we all know, once in motion, these money making schemes never end.
I have had a lot of difficulty getting this information together and it has taken me quite a long time to get my head around it. I am an amateur. Please correct me if I am wrong. I would love to be totally and entirely wrong about the numbers.
During one of my investigative phone calls, I asked questions regarding why I should pay for these parks miles and miles away from my own neighbourhood, I was told that “tourists are always looking for new facilities and amenities”. The Community Charter does not mention tourists; it mentions benefits to the parcel owner. I would respectfully suggest that this whole scheme was cooked up to benefit not mainly the taxpayers, but to attract and satisfy tourists and stimulate economic development in the area. We all know how these schemes work out.
At an RDN Board Meeting held in March, a Board Member stated that after the proposed increases to the parcel tax, approximately $700,000 would be added to Nanaimo’s annual tax bill and about $70,000 to Qualicum Beach’s tax bill. Keep in mind that 8 electoral districts in addition to the four municipalities are also contributing to this plan, and are being asked to pay increases as well. This is a runaway train, or should I say a runaway Gravy train.
You may argue that it is a worthy plan, but many would disagree, as I do. We cannot afford everything, when we cannot manage what we already have. (Remember the Core Review?)
I would guess that this plan would never have seen the light of day if it were done any other way than via a parcel tax. Remember the, “oh, it is a good value, only $10 per parcel. Amen. An easy sell, but crunch the numbers and see who loses.
Plea to taxpayers,
To the public who may be listening. Raise the alarm and educate your friends and relatives about parcel taxes. Ask questions.
Beware, Municipal Councils all across BC are introducing infrastructure levies which give taxpayers the impression that they are holding the line on property taxes. Do a search on Surrey, Lake Country, Cranbrook, and West Vancouver and read about what is happening. It will make you very angry.
Push back. Demand that cost savings be found within City Hall and that money be reprioritized to pay for basic bread and butter issues until we get our spending habits in order. We cannot continue to pay for new and never ending fancy plans full of promises with no accountability to the public and no end in sight.
On its web site, the City provides a means of estimating one’s 2016 tax levy.
It adds the following comments:
“The average residential assessment in the City of Nanaimo is estimated to be an increase of 5.34%.
Please note: the property tax estimator is using a 0% increase for residential Municipal taxes. The tax increase for other agencies is estimated at 1% and Regional Functions estimated at 7% for 2016. Please note that this rate will be updated as information is received. A final rate will not be known until May 15th, 2016.”
So don’t get hooked on that “0%” tax increase. The RDN will insure that, even if your assessment remained the same, your property taxes for 2016 will increase significantly.