I’m glad that I didn’t try and squeeze the Muskoka Model into the last post. The District Municipality of Muskoka (Muskoka) presents a complex model of amalgamation, at least to this rookie. I will provide a superficial overview of the tax rate structure for Muskoka with the hope of better understanding how amalgamation might be implemented between Carling, McDougall, McKellar, Parry Sound and Seguin.
This post is neither a graduate thesis nor a consulting (paid) project so I will stick to top level assessments and comments and not bother with detailed research. I am comfortable that this first level examination will provide generally valid observations.
Muskoka is composed of district municipalities.
Table 1 – Muskoka Demographics and Assessments
- This is a diverse municipality in terms of population and assessments.
- Individually the property assessment values of the individual urban centres are on a par with the more rural and cottage areas despite a considerable population difference.
- And then there is Muskoka lakes with 11% of the district municipality population and 37% of the assessment value. That has some similarities with the West Parry Sound District.
- Wow – Muskoka has almost $25 billion is assessments.
Well that’s a start and it’s time to slice up the data. I could overwhelm you right now and post up a simplified summary of the Muskoka Tax Rates. But I did not do that. You can find the tables at the end of the post for those who don’t believe what follows or want to do their own analysis.
Muskoka Tax Rates
Muskoka has separate tax rate schedules for all six of the district municipalities. These schedules have twelve different property classes. (The simplified summary only lists the three most important classes.) In addition to different tax rates for six municipalities there are five schedules for different services that are provided/taxed by Muskoka. Not all properties in all municipalities are subject to all tax schedules. (Yes, the details are complex but it’s not too hard to get a general grasp of the intent.)
Table 2 – Tax Rates and Applicability, Muskoka
General Tax Rates & Levies
In seems that all of the properties in all district municipalities are subject to, and pay, the same tax rates for general services and the hospital capital fund. The latter is an interesting concept for those of us who pay Parry Sound taxes and effectively subsidize a hospital that benefits all area residents and cottagers. It amounts to about $400,000 annually in Muskoka. It has been suggested to me that because of the area residents/cottagers we enjoy a better hospital than if they weren’t present. (Yup, because you have kids you get a government subsidy. Well, that covers their costs and makes life so much easier doesn’t it?)
The net/net is that if you have a home in Bracebridge or a cottage on Lake Muskoka your basic tax rate is the same regardless of the level of general services, and value, you believe you are receiving.
Waste Management Tax Rates & Levies
There are differences in Muskoka when it comes to the add on services, water, sewer and garbage. All properties in all municipalities pay for garbage services. But the waste management tax rate varies in terms of what municipality the property is located. The rate is highest in Bracebridge and is a bit lower in Gravenhurst (-10%) and Huntsville (-5%). Why? It’s probably an issue of service levels. The garbage tax rate in Georgian Bay is about the same as in Huntsville. For Lake of Bays and Muskoka Lakes the garbage rate is about 40% of that in the highest municipality, Bracebridge. Again, that probably represents different service levels. The important thing to note is that irrespective of the tax rate for waste management services, all properties in all municipalities pay for this service at a higher or lower tax rate.
Urban Areas A – Water Services
Things are different when it comes to water services. Water supply it seems is not available to all properties in all municipalities. That means some properties do not have a water assessment associated with their properties. For example, even in Bracebridge only a third of the assessed value of properties are taxed for water services. The figure is much lower in the nonurban municipalities. In Lake of Bays about 1% of the assessment is subject to water taxes. For all of Muskoka only 17% of assessed value is subject to this tax.
Urban Areas A – Sewer Services
A similar situation is seen with sewer services although it is not exactly the same. Why, I’m not sure and won’t investigate it further. The net/net is that if you have sewer service you pay in your tax bill. It’s also likely that the properties that receive Muskoka water and sewer services also pay for consumption. I can’t imagine that a car wash would be flat rated. In total about 15% of the assessed value in Muskoka is subject to sewer services taxes. It’s important to note that the Sewer Services rate, where applicable, is the most expensive of the services except for the General Taxes & Levy. In Bracebridge the sewer rate is 73% of the general levy rate. That is remarkably high and probably reflects the cost of replacing decaying infrastructure.
Muskoka Rates Summarized
With an understanding of what might be included in a property tax bill it’s time to look at the rates. These will be very top-level figures. Remember that tax rates are assigned by property class. These property class tax rates are the same in all municipalities when it comes to General Taxes and Hospital Capital Funding. For this discussion we will look only at the Residential, Commercial and Industrial property classes.
Table 3 – Muskoka General Tax Rates & Levies (2017)
Some quick analysis of the above table. Residential properties account for 93% of the Assessments and the same proportion of the taxes collected within rounding errors. This is reflected in part by the small premium, about 9%, charged to Commercial and Industrial properties. The discrepancy in the rounded figures, if you are wondering, is accounted for by the contribution of the other classes not included in the table above, for example Landfill, Pipelines, Farmlands and Managed Forest. It’s also worth noting that the Commercial and Industrial rates are the same.
Overall Muskoka Tax Rates
It’s possible to put together a highest and lowest tax rate for properties in Muskoka. This is done by adding the highest rates for a property that would be fully serviced (Water, Garbage and Sewer) and comparing it with a property that only is required to pay the General Tax Rate, Hospital Capital and Garbage (at the lowest rate).
Muskoka Tax Rates 2017
Table 4 – Highest Rate Possible (Bracebridge, 2017)
Table 5 – Lowest Rate Possible with Full Services (Muskoka Lakes, 2017)
Table 6 – Lowest Rate Possible with No Services (Muskoka Lakes, 2017)
The tables above summarize the tax rates depending on the services received. They define the high, the low and a middle scenario. It is possible to be located where there are no water or sewer services and that makes a huge difference on the tax bill. Depending on where the property is located the waste tax rate is higher or lower, but there is always a charge.
Total Tax Rates – Muskoka Versus Selected West Parry Sound Municipalities
The obvious next step is to compare these rates with those for the various municipalities outlined in the previous posts. In the case of the West Parry Sound municipalities the tax rates are what they are and are applied to all properties depending on class. The services provided for each municipality are defined by the municipalities themselves. The real tangible difference in terms of service concerns waste management. Parry Sound has curbside pickup once a week and this cost is included in the base tax rate. The other municipalities offer ‘bag and drag’ service to the local municipal waste facility. In theory at least, Parry Sound does not include charges for water and sewer services in the tax rate. These are accounted for separately and charged directly to the user. I’m not sure if there isn’t some ‘bleed’ into the tax rate. But a residence with a $200,000 assessment would pay about $1,300 per year for water and sewer service above the tax bill. That equals an effective rate of about 0.00650. For a $400,000 assessment it’s .00325 and for an $800,000 assessment it’s .00162. In Muskoka you pay a fixed rate on your assessment not a flat fee. Should a property assessed at $800,000 pay more for water and sewer services than a $100,000 property if they use the same service amounts? I’ll let you think about that.
Other than the items noted above the rates are broadly comparable with the understanding that the Parry Sound rates are even higher in comparison to Muskoka if you add in the water and sewer bills. Note – none of these tax rates include any Education Taxes.
Table 7 – Tax Rate Comparison, Muskoka and Selected West Parry Sound (2017)
Okay there you have it. Some quick comments:
- Parry Sound has by far the highest overall tax rates for Residential properties. It’s not even close. It’s the same case for Commercial properties. With Industrial properties Parry Sound is not that far from some other West Parry Sound municipalities but well above Muskoka .
- Seguin and Archipelago Residential tax rates aren’t that much higher than the lowest Muskoka rates, about 10% more. I assume that these are often seasonal cottage, albeit $10 million cottage, type properties. The same is true for Commercial and Industrial properties in the lowest tax areas, all of which probably enjoy the same service levels.
- I wonder how much the highest rates in Muskoka, presumably for the urban centres, are moderated by the high assessment value of the non-urban properties. The non-urban municipalities in Muskoka account for 65% of the total Muskoka residential assessment base. Since there is only one rate for all Muskoka properties regardless of their municipality it is possible to imagine that urban properties might well have a 20-30% higher tax rate if they were required to fund themselves.
Enough of the foreplay. In the next post we’ll start looking at amalgamation in West Parry Sound. After looking at all the numbers for Muskoka I think that I’ll put together a series of scenarios. It’s probably not as simple as adding all the numbers together, adding in a little bit of cost savings and dividing by the total amalgamated assessment value. But I’ll probably start with that to get everyone in the area who doesn’t live in Parry Sound hot and frothy. (It’s cold out there.)
Here are the more detailed Muskoka tax rates noted earlier. (Click on the image for a larger, easier to read, version.)