HomeMy WebLinkAboutFIN-06-015 - 2006 Regional Tax Strategy
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KITCHENER
Financial Services
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Report To:
Date of Meeting:
Submitted By:
Prepared By:
Ward(s) Involved:
Date of Report:
Report No.:
Subject:
Councillor B. Vrbanovic, Chair, and Members of
the Finance and Corporate Services Committee
May 1 , 2006
Pauline Houston, General Manager of Financial Services
& City Treasurer
Joyce V. Evans, Director of Revenue (Ext. 2895)
All
April 26, 2006
FIN-06-015
RECOMMENDATION:
2006 Regional Tax Strategy
That the Regional Municipality of Waterloo Council reports F-06-015
"2006 Tax Ratios and Tax Ratio Strategy" and F-06-017 "2006 Property
Tax Capping" be received for information.
BACKGROUND:
2006 TAX RATIOS AND TAX RATIO STRATEGY
On March 8th the Regional Municipality of Waterloo Council approved the 2006 Tax Ratios as
follows:
Tax ratios for 2006 property tax year:
Residential
New Multi-Residential
Multi-residential
Commercial
Industrial
Pipelines
Farm
Managed Forests
1.0000
1.0000
2.3400
1.9500
2.6100
1.1613
0.2500
0.2500
2006 TAX RATIO STRATEGY ANALYSIS
The reassessment for the 2006 taxation year resulted in a shift of taxation between the property
classes. The analysis of the impact of reassessment region wide is set out in the following
table.
Table 1 Effect of 2006 Reassessment on Taxation
Property Class Tax Impact
Residential .12%
Mu Iti- Residential 10.71%
Commercial -4.72%
Industrial -2.78%
The table shows the greatest impact on the multi-residential class, while the commercial and
industrial classes reflect negative shifts. The residential class has a minimal shift of .12%.
The report presented to Regional Council indicated that the higher increase in the value of the
multi-residential class and the corresponding shift in taxation also results in a capping shortfall
for the multi-residential class in 2006. To reduce the capping costs and ensure that the funding
of the capping would fall within the multi-residential class the policy recommended a reduction in
the multi-residential ratio to 2.34 in the short term.
The following table is a summary of the tax impact region wide of the policy setting the multi-
residential ratio at 2.34.
Table 2: Tax imoact of reduction in multi-residential ratio to 2.34
Property Class Tax Impact
Residential 1.27%
Mu Iti- Residential 0.00%
Commercial -3.63%
Industrial -1.67%
The impact of this policy on regional taxes for an average household valued at $203,000 is
$6.85 after the reduction in 2006 education tax rate. Impacts for City taxes, for an average
household valued at $203,000 is, approximately $6.75 after the reduction in 2006 education tax
rate.
LONG TERM TAX RATIO STRATEGY ANALYSIS
The report also recommended a long-term tax ratio strategy which recommends that
consideration should be given to closing the gap between the commercial, industrial and multi-
residential ratios. Currently the commercial ratio is 1.95 and the long-term strategy
recommends moving both the multi-residential and industrial ratios to 1.95 by 2010. The
following table set out the long term strategy proposal and also the cumulative impact on
residential properties.
Table 3: MR and Industrial Tax Ratio Reduction to 1.9500
Current Year 1 Year 2 Year 3 Year 4 Year 5
Position 2006 2007 2008 2009 2010
Multi-Res 2.5800 2.3400 2.2400 2.1500 2.0500 1 .9500
Ratio
Industrial Ratio 2.6100 2.6100 2.4500 2.2800 2.1000 1.9500
Ratio Impact $12.61 $12.17 $12.29 $13.53 $12.45
2006 Education Tax ($5.76)
Change
Cumulative Impact $6.85 $19.02 $31.31 $44.84 $57.29
Cumulative Impact % .54% 1.50% 2.46% 3.53% 4.51%
2006 PROPERTY TAX CAPPING
The Regional Municipality of Waterloo Council also approved the following 2006 Property Tax
Capping Program:
1. Establish the annual limited on tax increases for properties in all three capped classes at
10% of the previous year's capped taxes;
2. Establish thresholds for properties in all three capped classes such that if the taxes on
the property calculated under the capping program are within $250 of the current value
assessment taxes, the current value will apply;
3. Fund the limits on tax increases for 2006 for the multi-residential, commercial and
industrial classes by limited tax decreases for properties in the same class;
4. Introduce the required by-law prior to April 30th, 2006.
TAX CAPPING
Capping is provincially legislated and limits the amount of tax increases that can be passed on
the commercial, industrial and multi-residential classes.
In 1998, the Province passed legislation to protect Ontario businesses from large property tax
increases resulting from property tax reform. The legislation limited property tax increase for
commercial, industrial and multi-residential properties, capped classes, to 10% in 1998 and a
further 5% in 1999 and 2000. The 10-5-5 limits applied only to tax increases related to property
tax reform and budgetary increases were allowed in addition to the limits.
For 2001 and subsequent years the Province continued to limit tax increases under the
Continued Protection for Taxpayers Act, 2000 (Bill 140). Annual tax increases under this
legislation were limited to 5%.
Starting in 2005, the Province allowed municipalities the ability to set the annual percentage of
the cap using any or all of the following parameters"
· set the annual cap at 5% of the previous year's annualized taxes;
or up to 10% of the previous year's annualized taxes; or
· set the annual cap at the greater of the about or up to 5% of the previous year's
annualized CVA taxes.
In addition the Province also allowed municipalities to move capped or clawed back properties
directly to their CVA if the taxes are within $250 of the properties' CVA taxes. The threshold
can be less that $250.00.
The 2005 Property Tax Capping policy adopted by the Regional Municipality of Waterloo
included setting the annual tax percentage at 10% for 2005 and also the threshold at $250.00
The Regional Municipality of Waterloo 2006 Property Tax Capping policy continues to use the
same parameters within the Provincial legislation and the annual tax increase for capped
properties limited to 10% and the threshold at $250.00 have been adopted.
FINANCIAL IMPLICATIONS:
The tax ratio strategy policy shifts the tax burden away from the multi-residential class to the
other classes of properties. There is no impact on the City of Kitchener operating budget
resulting from this policy.
The capping policy utilizes the full flexibility provided in the Provincial legislation. There are no
financial implications to the City resulting from the capping policy since capping costs are
funded within the same property class.
CONCLUSION:
Staff will develop the City of Kitchener 2006 tax rates and applicable Tax Rate By-Laws for
approval by Council.
As in the past, maps showing shifts in taxation and highlighting any hot spots will be made
available to Council in early June prior to tax billing.
Joyce V. Evans, CMO, MPA, CGA
Director of Revenue
Pauline Houston, CA
General Manager of Financial
Services & City Treasurer
I
Report: F-06-017
REGION OF WATERLOO
FINANCE DEPARTMENT
Treasury Services Division
TO: Chair T. Galloway and Members of the Administration and Finance Committee
DATE:
March 8, 2006
FILE CODE:
SUBJECT: 2006 PROPERTY TAX CAPPING
RECOMMENDA TION:
THAT the Regional Municipality of Waterloo approve the following for the 2006 Property Tax
Capping Program:
1. Establish the annual limit on tax increases for properties in all three capped classes at 10%
of the previous year's capped taxes;
2. Establish thresholds for properties in all three capped classes such that if the taxes on the
property calculated under the capping program are within $250 of the current value
assessment taxes, the current value assessment taxes will apply;
3. Fund the limits on tax increases for 2006 for the multi-residential, commercial and industrial
classes by limiting tax decreases for properties in the same class;
4. Introduce the required by-law prior to April 30, 2006;
AND THAT the Area Municipalities be notified accordingly.
SUMMARY:
Provincial legislation introduced for 2005 gives single tier and upper tier municipalities some options
in determining the annual property tax capping program for multi-residential, commercial and
industrial properties. Capping options must be approved on an annual basis or the default option
will apply. This report recommends the property tax capping program for 2006.
REPORT:
Backaround
In 1998, the Province passed legislation to protect Ontario businesses from large property tax
increases resulting from property tax reform. The legislation limited property taxes for commercial,
industrial and multi-residential properties (the capped classes) to 10% in 1998 and a further 5% in
each of 1999 and 2000. The 1 0-5-5 limits applied to tax increases related to property tax reform and
budgetary increases were in addition to the limits. The limits on tax increases for the capped
classes were financed by limiting tax decreases for other properties within the same class and there
were no impacts on the uncapped property classes, including the residential class.
For 2001 and subsequent years, the Province committed to continue the limits on tax increases until
tax fairness was fully achieved and the former outdated assessment system was transitioned to the
new current value assessment system. The Continued Protection for Taxpayers Act, 2000 (Bill 140)
Page 1 of 4
March 8, 2006
Report: F-06-017
established a permanent program to implement the Province's commitment of limiting tax increases
for the capped classes. With Bill 140, the ability to pass municipal levy increases on to the capped
classes depends on the tax ratios established for the capped classes relative to threshold ratios
prescribed by the Province. Municipal levy or budget increases are in addition to the capping
provided municipalities are at or below the threshold ratios for the capped classes as is the case in
this Region. The recommended tax ratios for the multi-residential, commercial and industrial
classes for 2006 (as noted in F-06-016) are below the provincial thresholds. Under Bill 140,
municipalities can finance all or part of the capping costs by limiting tax decreases for properties in
the same class, through internal revenues, or through the general levy.
Current Cappina Proaram
Effective 2005, the Province provided a number of capping options, rather than mandatory
requirements, to enable municipalities to make decisions which respond to local conditions rather
than conditions in other areas of the province. The options include:
1. an increase in the amount of the annual cap from 5% to up to 10% of previous year's capped
taxes;
2. the ability to set an upper limit at the greater of a 5% to 10% cap on previous year's capped
taxes or 5% of previous year's CVA taxes;
3. the ability to move capped and/or clawback properties directly to their current value assessment
(CVA) taxes if they are within $250 of the CVA taxes;
4. the ability to combine option 3) with either of options 1) or 2);
5. the ability to use different options or combinations of options for each of the three capped
classes;
An additional option to "phase-out" the preferential treatment given to new construction was adopted
by Regional Council in 2005 and continues through 2008 at which time all new construction will be
taxed at its current value assessment taxes.
The new options noted above relate to how the capped taxes are determined or established.
Municipalities continue to have the same options in determining how to fund capping costs.
Municipalities can finance all or part of the capping costs by limiting tax decreases for properties in
the same class, through internal revenues, or through the general levy.
Committee and Council approval are required to enable the Region to pass a by-law by April 30,
2006 to enact any of the options noted above. If no by-law is passed, the Region will be subject to
the "default" option or same capping program that applied prior to 2005 where tax increases were
limited to 5% of previous years capped taxes plus municipal budget increases.
Recommended Cappina Proaram for 2006
Although there are numerous capping options, staff have presented three main options in Appendix
1. All three options are based on the 2006 tax ratios recommended in report F-06-016 and the data
currently available in the tax capping model provided by the Province. Although the legislation
allows municipalities to set an upper limit for increases at the greater of 5% to 10% of previous
year's capped taxes or up to 5% of previous year's current value assessment taxes, the use of this
option does not change the capping results or provide any additional benefit. Calculating taxes
based on a percentage of previous year's capped taxes is most easily understood by the taxpayer
and is easier to administer as this is the calculation used in previous years. Consequently, capping
is based on prior year's capped taxes in all three options presented in Appendix 1. The use of
thresholds has proven extremely effective reducing the number of properties affected by capping
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Page 2 of 4
March 8, 2006
Report: F-06-017
with minimal increases to the capping costs so maximum threshold limits of $250 for both clawback
and capped properties have been included in all three options. The use of these thresholds results
in properties moving to full CVA taxes if the taxes calculated under capping are within $250 of the
CV A taxes.
Option A shows the default option with tax increases (excluding budget impacts) limited to 5% of
prior year's taxes for all the capped classes. Option B is based on tax limits of 7.5% while Option C
utilizes the maximum limit of 10%. The quickest route to full CVA taxes and the best method to
avoid capping shortfalls requires the use of the highest allowable percentage for capped tax
increases. Appendix 1 shows that the higher the percentage by which taxes can increase, the lower
the capping costs, the lower the clawback percentage and the lower the number of capped
properties. The use of the 10% limit for capping (Option C) can reduce capping costs by $2.2
million, reduce the number of capped properties and increase the number of properties paying CV A
taxes by 1,053 as compared to the 5% option (Option A). As noted above, the use of thresholds
increases the number of properties at CVA taxes and reduces the number of properties affected by
the capping program. Having properties at or close to their CVA taxes can reduce the tax capping
impacts resulting from the next reassessment.
Option C with 10% capping limits and thresholds for both capped and clawback properties is the
same capping program used in 2005. Appendix 2 shows the approved capping program for 2005 as
compared to the recommended capping program for 2006. The capping program for 2005 is
identical to the recommended 2006 program with very comparable results.
Staff Recommendation
It is staff's recommendation that a capping program where tax increases are limited to 10% of
previous year's capped taxes with thresholds of $250 applicable to both capped and clawback
properties (Option C from Appendix 1) is the best way to proceed for 2006. This option is
recommended for the following reasons:
. there would be no capping shortfalls;
. capping costs are funded by limiting decreases within the same property class;
. capping costs are minimized;
. clawback percentages enable properties experiencing a decrease to retain a greater portion
of the reduction;
. the fewest number of properties are affected; alternatively, the greatest number of properties
are paying full CV A taxes;
. all three capped classes are treated same; simpler for area municipal staff to administer and
easier for taxpayers who own property in more than one of the capped classes;
. same program as previous year; simplifies capping program for taxpayers;
. best positions the Region to deal with capping impacts from the reassessment for 2007.
Area Municipal Input
The Area Treasurers support a capping program that is simple for the taxpayer to understand,
results in CV A taxes for the greatest number of properties without overly disadvantaging taxpayers
(i.e. affects the fewest number of taxpayers) and does not result in capping shortfalls.
Next Steps
The Region must pass a by-law by April 30, 2006 to include any of the capping options for 2006. If
the recommended capping options are not approved by the end of April, the status quo or default
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March 8, 2006
Report: F-06-017
capping option would apply and tax increases for capped properties would be limited to 5% of
previous year's capped taxes. This would result in capping costs being $2.2 million higher; a
significantly higher clawback for the multi-residential class (92% vs 52%) and a greater number of
properties affected by capping (54% vs 40%).
CORPORATE STRATEGIC PLAN:
One of the Region's Strategic Focus Areas is that of Ensuring Operational Effectiveness and
Efficiency and one of the objectives within that Focus Area is to Maintain Financial Stability.
Property tax policy and tax capping relate to that objective.
FINANCIAL IMPLICATIONS:
Provided that the Region continues to fund its capping costs by limiting decreases for other
properties in the same class, there is no impact on the residential taxpayer and no impact on the
total amount of property taxes collected.
OTHER DEPARTMENT CONSUL TA TIONS/CONCURRENCE: Nil
ATTACHMENTS:
Appendix 1 - 2006 Preliminary Capping Analysis
Appendix 2 - Comparison of 2005 Capping Program and the 2006 Recommended Program
PREPARED BY: A. Hinchberger, Director of Financial Services, Treasury and Tax Policy
APPROVED BY: L. Ryan, Chief Financial Officer
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Page 4 of 4
I
Report: F-06-016
REGION OF WATERLOO
FINANCE DEPARTMENT
Treasury Services Division
TO: Chair T. Galloway and Members of the Administration and Finance Committee
DATE:
March 8, 2006
FILE CODE:
SUBJECT: 2006 TAX RATIOS AND TAX RATIO STRATEGY
RECOMMENDATION:
THAT the Regional Municipality of Waterloo establish the following tax ratios for the 2006 property
tax year:
Residential
New Multi-residential
Multi-residential
Commercial
Industrial
Pipelines
Farm
Managed Forests
1.0000
1.0000
2.3400
1.9500
2.6100
1.1613
0.2500
0.2500
THAT the Regional Municipality of Waterloo approve a long term tax ratio strategy to reduce the
multi-residential and industrial tax ratios to 1.9500, equal to the current commercial tax ratio, over
the years 2007 to 2010 subject to the annual tax ratio and tax capping review;
THAT the necessary tax ratio by-law for 2006 be introduced at the March 22nd Regional Council
meeting;
AND THAT the Area Municipalities be notified accordingly.
SUMMARY:
Administration and Finance Committee report F-06-012, dated February 22,2006 and attached as
Appendix 1, identified the need to reduce the multi-residential tax ratio in 2006 to offset
reassessment impacts and to ensure there is no capping shortfall for the multi-residential class.
The report also noted the need for a longer term tax ratio strategy. This report addresses the
recommended tax ratios for 2006, including a reduced multi-residential ratio, and a longer term tax
ratio strategy for the multi-residential, commercial and industrial property classes.
REPORT:
Backaround
The reassessment for the 2006 taxation year resulted in a shift of taxation between the property
classes with the multi-residential (MR) class having the greatest impact. The higher increase in the
value of the MR class results in a shift of taxation of 10.71 % on to that class. This is a significant
impact compared to the shifts off the commercial and industrial classes (-4.72% and -2.78%
Page 1 of 5
March 8, 2006
Report: F-06-016
respectively) and the minimal shift of 0.12% onto the residential class. The higher increase in the
value of the MR class and the corresponding shift in taxation also results in a capping shortfall for
that property class for 2006. A reduction in the MR tax ratio is required to reduce the capping costs
and ensure that the capping costs can be funded from within the class. Funding capping shortfalls
within the class is a key element of the annual capping program as capping shortfalls, including the
education portion, must be funded by the Region and the Area Municipalities.
In addition to ensuring there is no capping shortfall, there are other benefits to a reduced MR tax
ratio. The Region's MR tax ratio has been among the highest in the province since the inception of
tax ratios and at 2.5800, it is higher that the provincial average of 2.1689 and the provincial median
of 2.1539. The Region's ratio is also higher than the MR ratio for most of its regional and single tier
comparators. A lower tax ratio would move towards tax equity for the residential and MR classes as
identified by local Municipal Property Assessment Corporation (MPAC) staff. MPAC staff noted that
when MR property is converted to residential property, the value generally doubles which implies
that a tax ratio of 2.0000 for the MR class would be a reasonable level for tax equity. A lower MR
tax ratio would reduce the tax ratio gap between MR properties and properties in the class for new
MR development which has a tax ratio of 1.0000. A final benefit from a lower MR tax ratio could be
in tax savings for MR properties owned by the Region and savings in subsidy payments to non-profit
and cooperative housing providers, depending on individual reassessment and capping impacts for
the various properties.
In addition to the required reduction in the MR ratio for 2006, a need for a longer term tax ratio
strategy has been identified. Although there are numerous options for a longer term tax ratio
strategy, a strategy based on tax equity has merit. Tax equity for the multi-residential and residential
classes appears to be achieved with a MR tax ratio of 2.0000 while tax equity for the commercial
and industrial classes would be achieved with a common ratio. This ratio would have to be 1.9500
due to legislative constraints. Consequently, a long term strategy which results in a tax ratio of
1.9500 for the MR, commercial and industrial classes is recommended.
Recommended 2006 Multi-residential Tax Ratio
Preliminary analysis provided in report F-06-012 noted that a MR tax ratio of 2.3040 would be
required to completely offset the reassessment impacts. At that time, staff were not able to analyze
capping impacts for various ratios however, it was anticipated that the MR ratio would not have to be
reduced to that extent. Since that time, the modeling tool provided by the Province has been
updated for 2006 and staff have been able to calculate capping impacts for various tax ratio
scenarios. Based on the capping data currently available, a multi-residential tax ratio of 2.3900 or
less would be required for 2006 to ensure there was no capping shortfall for that class. A tax ratio of
2.3900 would result in a clawback of 92% which does not result in any flexibility. As the capping
data is refined over the next few months, there is the possibility that capping costs could increase to
a level where a ratio of 2.3900 would not be sufficient to ensure there was no shortfall.
Consequently, staff are recommending a lower MR tax ratio of 2.3400 for 2006 for the following
reasons:
. capping flexibility
. closer alignment with the provincial average and the MR ratios for regional and single tier
comparators
. MR / Residential tax equity
. good positioning for the recommended long term tax ratio strategy
. minimal impact on the residential taxpayer of 0.54% after allowing for the education tax
reduction
263547
Page 2 of 5
March 8, 2006
Report: F-06-016
Table 1 summaries the capping impacts (shortfall and clawback percentages) and the impact on the
Regional portion of the tax bill for an average residential household for the current MR tax ratio of
2.5800; the maximum ratio of 2.3900 required to prevent a capping shortfall; the recommended ratio
of 2.3400; and the ratio which fully offsets the MR reassessment of 2.3040. The impact resulting
from the recommended ratio of 2.3400 is $12.61 or 1.0% before allowing for the reduction in the
2006 residential education tax rate. Including this reduction, the impact is $6.85 or 0.54%.
Table 1: 2006 Multi-residential Tax Ratio Reductions
M R Ratio
Net Impact *
%
* for an average residential property valued at $203,000
As noted in previous reports, reductions in tax ratios do not change the tax ratios for any of the other
property classes, but such reductions will increase the taxes to be collected from the other classes.
Appendix 2 shows the impact of the above noted M R tax ratio changes on the M R, commercial and
industrial classes. Reductions in the MR tax ratio to 2.3900, 2.3400 and 2.3040 would result in
decreases of 6.64%; 8.40% and 9.67% respectively for MR properties and increases of 0.78%;
1.00% and 1.14% respectively for the commercial and industrial classes. These impacts exclude
the reassessment tax shifts for the commercial and industrial classes of -4.72% and -2.78%
respectively. These classes would, in total, continue to see a reduction in taxes under any of the
ratio reductions noted above.
Recommended Lona Term Tax Ratio Strateav
A reduction in the MR tax ratio is just one component of a longer term tax ratio strategy. Other
strategies for the commercial and industrial tax ratios should also be considered. The Region's
commercial and industrial tax ratios are closer to the provincial averages and medians. The
difference in the tax ratios for these classes (1.9500 for the commercial class and 2.6100 for the
industrial class) is generally historical due to higher business occupancy taxes for industry under the
previous assessment and taxation system. There are strong arguments for closing the gap between
the tax ratios and providing equity for these classes. Commercial and industrial operations are both
businesses and with the elimination of the business occupancy tax, there is no real rationale to tax
these classes differently. Closing the gap between these two ratios would result in greater equity
within the business community and having the same ratio for both classes would address the issue
of how research and development and "high tech" properties are classified and assessed and
provide efficiencies for MPAC in dealing with classification issues.
In order to achieve equity, the industrial ratio would need to be reduced as legislation prohibits the
Region from increasing the commercial ratio. A reduction in the industrial tax ratio with a resultant
reduction in taxes could provide some incentives for industries which have been impacted by rising
energy costs and higher exchange rates. Given the historical nature of the difference in ratios, a
strong case can be made for closing the gap entirely and equalizing the commercial and industrial
ratios at 1.9500. As noted above and in report F-06-012, a MR tax ratio of2.0000 approximates tax
equity for the MR and residential classes. A ratio of 2.0000 is quite close to the ratio of 1.9500 for
the commercial class. Both multi-residential and commercial properties are businesses and both
263547
Page 3 of 5
March 8, 2006
Report: F-06-016
classes are assessed based on income so a tax ratio of 1.9500 for the MR class would also be quite
appropriate over the longer term. Consequently, staff are recommending a longer term tax ratio
strategy which would result in a ratio of 1.9500 for the commercial, industrial and multi-residential
classes over a period of four years from 2007 through 2010. This strategy is recommended for the
following reasons:
. reduces the MR tax ratio to a level which approximates tax equity with the residential class
. provides equity between the business classes
. provides relief to the industrial sector which has been hard hit by the exchange rates and
energy costs
. may encourage industrial development
. simplifies the assessment classification process
. should assist with future capping programs
. provides simplicity for non-residential property owners
. minimal impact to the residential taxpayer of approximately 1.0% per year
Table 2 illustrates the annual impact of the strategy on the average Regional household for the
Regional portion of the tax bill and the cumulative impact over five years including the recommended
MR ratio change for 2006. The impact resulting from the recommended strategy is in the range of
$12 to $13 per year or approximately 1.0%. Including the education tax rate reduction, the
cumulative impact is 4.51 % over the period 2006 to 2010.
Table 2: MR and Industrial Tax Ratio Reduction to 1.9500 *
* based on the 2006 assessment base and 2006 Regional levy
While Table 2 shows the impact on an average residential property, Appendix 3 shows the impact
of the longer term tax ratio strategy on the multi-residential, commercial and industrial classes.
Based on the strategy noted above, MR and industrial taxes would be reduced by 20.67% and
21.58% respectively while commercial taxes would increase by 4.95%.
Tax ratios and tax capping programs must be established on an annual basis so this provides an
opportunity for Committee and Council to review the long term tax ratio strategy relative to
reassessment impacts for that year.
CORPORATE STRATEGIC PLAN:
One of the focus areas of the Corporate Strategic Plan is to Ensure Operational Effectiveness and
Efficiency by maintaining financial stability. Property tax policy assists with this focus area.
263547
Page 4 of 5
March 8, 2006
Report: F-06-016
FINANCIAL IMPLICATIONS:
The recommended reduction in the 2006 MR tax ratio to 2.3400 would result in an increase of 1.0%
for the Regional portion of the tax bill or $12.61 for an average household valued at $203,000. After
allowing for the draft 2006 education tax rate reduction, the impact would be a 0.54% increase in the
Regional portion of the tax bill or $6.85 for an average household. Impacts for the local municipal
portion of the tax bill would be additional to the $6.85. The impacts for the recommended longer
term tax ratio strategy would be in the range of $12 to $13 per year or approximately 1.0% for
residential property. Including the 2006 education tax rate reduction, the cumulative impact would
be 4.51 % over the period 2006 to 2010.
OTHER DEPARTMENT CONSUL TA TIONS/CONCURRENCE: Nil
ATTACHMENTS:
Appendix 1 - Report F-06-012
Appendix 2 - Impact of Multi-residential Tax Ratio Reduction - Other Classes
Appendix 3 - Impact of the Long Term Tax Ratio Strategy - Other Classes
PREPARED BY: A. Hinchberger, Director of Financial Services, Treasury and Tax Policy
APPROVED BY: L. Ryan, Chief Financial Officer
263547
Page 5 of 5
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