City’s hot hous­ing mar­ket shifts tax bur­den

Res­i­den­tial as­sess­ment growth out­paces busi­ness sec­tors

The Hamilton Spectator - - FRONT PAGE - NATALIE PAD­DON

City man­ager Chris Mur­ray says Hamil­ton’s hot hous­ing mar­ket is partly to blame for job cuts at the city.

While the boom­ing de­mand for lo­cal real es­tate has con­trib­uted to “a lot” of as­sess­ment growth on the res­i­den­tial side, com­mer­cial, in­dus­trial and of­fice growth hasn’t kept the same pace, he said.

“That shift has put more bur­den on the res­i­den­tial tax­payer,” he said dur­ing a news con­fer­ence Thurs­day.

The elim­i­na­tion of 23 man­age­ment and other non-union jobs, an­nounced Wed­nes­day, is one step to try and com­bat a threat­ened tax hike.

City coun­cil has re­quested $20 mil­lion be cut from the 2017 op­er­at­ing bud­get, which oth­er­wise could raise the av­er­age tax bill by four or five per cent.

“Coun­cil does not want to pass on large tax in­creases to its res­i­dents, so this trans­lates to about a $20-mil­lion pres­sure we have to some­how ad­dress.”

Be­cause res­i­den­tial val­u­a­tions are out­pac­ing the oth­ers, com­mer­cial, in­dus­trial and multi-res­i­den­tial tax­pay­ers could ac­tu­ally see some tax re­lief, said city fi­nance head Mike Ze­garac.

Staff will bring for­ward a re­port Mon­day pre­sent­ing pos­si­ble tax pol­icy mea­sures to try to lessen the re­assess­ment shift ef­fects on res­i­den­tial prop­erty own­ers, he said.

Prop­erty as­sess­ments are con­ducted by the Mu­nic­i­pal Prop­erty As­sess­ment Cor­po­ra­tion (MPAC) — a non­profit cor­po­ra­tion ac­count­able to the prov­ince. MPAC up­dated the as­sessed val­ues of ev­ery prop­erty in On­tario in 2016. In­creases will be phased in over four years, start­ing in 2017 through 2020.

Mur­ray an­nounced Wed­nes­day night that 11 directors, five man­agers and seven ad­min­is­tra­tive staffers have ei­ther been ter­mi­nated or agreed to early re­tire­ments as part of the cuts.

An­other five man­age­rial jobs were down­graded to su­per­vi­sory roles.

Three of the elim­i­nated di­rec­tor po­si­tions are from the city’s plan­ning and eco­nomic de­vel­op­ment depart­ment, with two ad­di­tional di­rec­tor pos­ses­sions hav­ing been scrapped from pub­lic works, pub­lic health, emer­gency and com­mu­nity ser­vices and the city man­ager’s of­fice, Mur­ray said Thurs­day.

“This was a very dif­fi­cult de­ci­sion,” he added.

The changes an­nounced Wed­nes­day are ex­pected to save $3.3 mil­lion a year, but first, the city has to swal­low about $1.4 mil­lion sev­er­ance and re­lated costs.

Mur­ray called the sav­ings a “step in the right di­rec­tion,” but didn’t rule out ad­di­tional cuts. He said sug­ges­tions for how to save will be brought for­ward in the next cou­ple of weeks.

“We have a four-year bud­get chal­lenge un­like any­thing I think we’ve seen be­fore,” he said.

“There are more mea­sures we’re go­ing to be pre­sent­ing to coun­cil in terms of ser­vice level pro­pos­als and rev­enue op­por­tu­ni­ties.”

He pointed to a pos­si­ble con­sol­i­da­tion of emer­gency and com­mu­nity ser­vices and pub­lic health de­part­ments, as well as look­ing to a se­cret con­sult­ing re­port from last year that rec­om­mended up to 45 On­tario Works staff cuts.

Mur­ray also cited that land-use plan­ning and trans­porta­tion plan­ning are han­dled by two dif­fer­ent de­part­ments.

“Maybe it might make some sense that they were amal­ga­mated,” he said.

Hamil­ton res­i­dents were taxed for $828 mil­lion last year, with a 1.8 per cent av­er­age tax hike that added $67 to the so-called av­er­age owner of a home worth $295,300.

Over five years, the suc­ces­sive sub-two per cent in­creases have still added $317 to that av­er­age tax bill, plus an­other $124 for ex­tra wa­ter rates. Those hikes are among the low­est in On­tario ci­ties.

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