Moving On…

Month: February, 2013

Perpetuating a Myth

What inspired me to collect all those stats and post about the city tax rate was actually hearing a caller on AM980 saying the city has all kinds of money they aren’t telling anyone about.

The conversation took place on The Craig Needles Show.

February 12, 2013

[17:36]

Arn: …most of the houses in the city of London have not had a tax freeze, at all, and more than that the city is getting that revenue.

Craig: Yes, well it’s assessment growth.

Arn: So there is reassessment money that is coming into the city that they just aren’t talking about.

Craig: Yeah, I can understand how its not a freeze, its not the exact same bill that you got the year before and I don’t think that they should imply that it would be.

Arn: No, no don’t call it not the exact same bill, talk about an increase…

Craig: Sure

Arn: …its an increased bill.

Craig: Yeah thats fair.

– Or go listen for yourself. http://www.am980.ca/The-Craig-Needles-Show.aspx

Where this all goes off the rails is Arn’s declaration that there is “reassessment money”, reassessment money is revenue neutral. It is only new assessments (from new building or changing classification i.e. from residential to commercial) that adds to the city’s revenue.

I don’t think it was intentional on Craig’s part to agree to this, he correctly referred to “assessment growth” at first, and to the fact that Arn’s taxes may have increased. He probably just missed the accusation that this created extra money for the city.

I think Arn also has a direct line to the studio, so arguing could end up being a long-term battle.

Property Taxes and Assessment

It amazes me how many people think that reassessment is a goldmine for the city.

It is not.

The city reduces the tax rate every year to counteract the reassessment of the average existing properties.

Want proof?

LdnOnt Taxes PDF

Unless you remember politicians boasting about our 10.4% decrease in property taxes since 2007, I would say that idea is busted.

Still wondering how the city calculates your taxes? Sandy Levin has a good write up over on the Emerging Leaders site that lays out the basics at http://www.emergingleaders.ca/muncipal-taxes-explained/.

 

Could Someone (smarter than me) Check my Math? [Updated]

I am attempting to understand the calculations that are behind our municipal tax rate in an effort to understand the city’s budget process.

Listed below are actual numbers I have gathered from a couple locations.

The home value is my house in White Oaks as assessed by MPAC.

The calculation for 2012 property taxes is from the city’s website. [1]

The 2013 property tax calculation uses a 0% increase, but reduces the municipal share of the tax by 2.48%, the phased in assessment growth.[2]

Could someone please review these numbers and correct any errors I have made in calculation or assumption.

Screen Shot 2013-02-11 at 8.16.48 AM

By my calculations under a proposed tax freeze I will actually be paying $17.99 less next year.

 

 

Update (February 12,2013):

Apparently none of this math matters, and I kind of understand why.

From an email I recived from the city’s finance department this morning “Jason, you cannot calculate exact tax rates simply from the City budget.”

It was explained in the email that there is much more that goes on behind the scenes when it comes to the rate we pay for taxes.

While the city discusses how much we should spend as a whole, the percentages are only a rough projection of the final cost to taxpayers.

Other factors like the education amount which will be lower for 2013 at  0.212% (a number I can’t find online publicly anywhere) and the ratios which set the multi-unit, industrial and commercial rates are still up for discussion/finalization after the budget process is complete. All these factors can alter the final rate we pay for property taxes.

That’s really too bad because I was hoping to build something similar to the calculator Ottawa provides its citizens at http://app06.ottawa.ca/cgi-bin/tax/tax.pl?lang=en, with the ability to enter your own property information and see how the change in budget decisions reflected in your final bill, as opposed to this ‘average homeowner’ we hear about in all media reports.

I think this calculator could be a good tool to further discussion during budget debates.

This is a setback, but I’m not throwing in the towel on this project, not yet.

 

[1] http://www.london.ca/d.aspx?s=/Taxes/Residential/default.htm
[2] Martin Hayward’s report to the Corporate Services Committee January 22, 2013. Schedule C. http://sire.london.ca/mtgviewer.aspx?meetid=432&doctype=agenda&itemid=17257