Mu­nic­i­pal tax sys­tem in need of re­view

The Compass - - OPINION -

Dear edi­tor,

At the Mu­nic­i­pal­i­ties New­found­land and Labrador (MNL) con­fer­ence, the re­ceipt of the no­tice of as­sess­ment is a re­minder to once again en­cour­age the min­is­ter of mu­nic­i­pal af­fairs — and our mu­nic­i­pal lead­ers — to re­view through con­sul­ta­tions to in­tro­duce a fair and eq­ui­table tax sys­tem for pri­vate land own­ers in our mu­nic­i­pal­i­ties.

Pre­vi­ous cor­re­spon­dence with the min­is­ters and MNL on the is­sue failed to cre­ate any re­sponse or ac­tiv­ity; it ap­pears they are con­tent to fol­low the sta­tus quo.

It is nec­es­sary to bring the leg­is­la­tion into the 21st cen­tury and elim­i­nate this ab­nor­mally. This sys­tem pro­vides no re­la­tion­ship be­tween the ser­vices pro­vided and the tax in­voiced to prop­erty own­ers.

The ir­reg­u­lar­ity of the tax is­sue with re­spect to prop­erty tax is out­dated; all res­i­den­tial tax charged by a mu­nic­i­pal­ity should be the same amount per house­hold with the ex­cep­tion of maybe a pro-rated base amount for such things as prop­erty frontage and res­i­dents hous­ing apart­ments.

It is un­fair to the res­i­dents to charge a tax re­lated to these fac­tors. There is no com­mon de­nom­i­na­tor to de­ter­mine the levy based on these cri­te­ria. This leg­is­la­tion is ob­so­lete, does not bring par­ity to the tax and must be taken un­der re­view by the depart­ment to bring equal­ity to the tax sys­tem used by mu­nic­i­pal­i­ties.

The ti­tle of the tax on the in­voice and on the de­tails in the bud­get doc­u­ment is ir­rel­e­vant to the in­voic­ing re­fer­ring to the tax as a prop­erty tax when in fact it is a fee-forser­vice (set out to cover the cost of ser­vices such as snow clear­ing, garbage col­lec­tion, fire pro­tec­tion, street light­ing, trans­porta­tion, street main­te­nance and mu­nic­i­pal en­force­ment) as out­lined in the de­scrip­tion in bud­get de­tails.

This pro­vides an op­por­tune time to cor­rect these dis­crep­an­cies and poli­cies prior to the next tax­a­tion year. Mu­nic­i­pal­i­ties New­found­land and Labrador de­scribes the present sys­tem has built around the abil­ity to pay, tun­nel vi­sion. A leg­is­la­tion re­view is re­quired, both lev­els of govern­ment ap­pear un­will­ing to tackle the is­sue. In­stead, they con­tinue this dis­pro­por­tion tax.

The pro­posal will di­rectly af­fect the Mu­nic­i­pal As­sess­ment Agency as it ex­is­tence will not be re­quired, elim­i­nat­ing its op­er­a­tion cost to the mu­nic­i­pal­i­ties, thus a sav­ing to mu­nic­i­pal tax­pay­ers. This new pro­posal will not use the as­sessed prop­erty value to de­ter­mine the prop­erty tax; a fair fee for ser­vice will re­place prop­erty tax.

A new sys­tem, through con­sul­ta­tions, will im­prove the tax sys­tem and es­tab­lish a fair and eq­ui­table sys­tem, ef­fec­tive and ef­fi­cient, a uni­form tax base for the tax­payer.

The new tax base value as­signed will re­main with the prop­erty for its en­tire life, thus pro­vid­ing an eas­ier cal­cu­la­tion of taxes an­nu­ally for the bud­get process for mu­nic­i­pal­i­ties, as there will be only one vari­able — the mill rate.

This will elim­i­nate a cover to dis­guise tax in­creases by mu­nic­i­pal­i­ties dur­ing the set­ting of the mill rate, hid­ing be­hind the in­creases in as­sess­ment val­ues.

Mu­nic­i­pal gov­ern­ments, not un­like our pro­vin­cial govern­ment, find it quite dif­fi­cult to hold the line on spend­ing. Their recipe for re-elec­tion suc­cess is to in­crease their rev­enues as an op­por­tu­nity presents it­self, re­gard­less of the con­se­quence on its res­i­dents. Boyd Legge Mount Pearl

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