I was recently speaking with a business owner in the downtown and they commented that the commercial property taxes in Parry Sound seemed to be unreasonably high. That comment reminded me of a recent Town Council agenda item that did not receive any mention or action as far as I can tell. It’s worth a short discussion in the context of at least one Parry Sound business owner’s concern.
Here’s the relevant section, Item 9.4.1, from the Open Meeting Agenda of April 1st, 2014:
The Municipal Act requires a single tier Municipality to pass a by-law each year to set its tax ratios.
Ontario Regulation 386-98 provides for “Allowable Ranges for Tax Ratios”
When municipalities wish to change existing tax ratios that are outside the “Allowable Ranges for Tax Ratios” set out in Ontario Regulation 386/98, they must move closer to that range. Our existing rates for non-residential taxes are higher than the allowable range, thus any change in the tax ratios would result in a higher portion of the taxes levied being shifted to the Residential Tax Class.
To reduce the current tax ratios we would see a shift of property taxes to the residential property owners from the non-residential property owners (eg. Commercial, industrial & multi-residential). A reduction in the non-residential tax class ratios can not be increased in subsequent years.
The current tax ratios have been used to calculate our 2014 weighted assessment used in various municipal levy calculations including our share of the 2014 Land Ambulance budget. The current tax ratios have been maintained as in prior years’ during the 2014 budget process to project overall levy increases as well as impacts on the typical/average property.
It is recommended that these ratios remain the same in 2014 as was approved since 2008.
Advantages and/or Disadvantages of Recommendation:
Will keep ratios between classes the same as last year and will allow the market value changes to provide for any shifting of taxes between the various tax classes.
To change tax ratios would result in further delays in completing the 2014 budget as the draft budget was previously presented to council based on the tax ratios and tax policies remaining unchanged from 2013.
There is no financial impact to the Town. If the ratios are changed it does not change the amount of money we require to raise through taxes, it just shifts who would be paying them (onto the residential property owners).
It’s pretty obvious from what is presented above that the non-residential property owners in Parry Sound are to some extent subsidizing residential property owners. To what degree or amount is not obvious from the materials presented, but an interested property owner could probably figure it out by referring to the relevant provincial legislation. It looks as though this is something that has been going on since at least 2008. I guess if no one is asking questions it isn’t a problem. Or is it?
It probably would have messed things up for Council’s approval of a flat tax rate in an election year (excepting of course the increase in property values). Any chance the Downtown Business Association will take up the issue for their members? With the ‘troublemakers’, or is it ‘persons of conscience’, off the board I expect there won’t be a peep out of them.
Doing the right thing is the right thing to do, even if it causes some short-term pain and embarrassment. Yup, that’s an indirect reference to something that shall no longer be mentioned.
You can find the full agenda package at the Town’s website, here’s a link (http://www.townofparrysound.com/pagesmith/14). It’s listed as 2014 04 01.
A Subsidized or Subsidizing Property? (Parry Sound in Black & White)