Tax rates are not taxes

Will they ever learn? We can understand why municipal officials might want to distract their citizens from increased taxes by using confusing language, but reporters should be able to see through it, shouldn’t they? Here is a report out of Queens Co. written, it says, by Nick Moase.

First the headline:

Queens tax rates remain the same
Assessments increase budget

No, assessments don’t increase budgets.  Municipalities, councils and councillors increase budgets, sometimes whether they need to or not. There is no assessment god up there saying “We are increasing assessments in your area; you MUST take your property owners’ money and spend it. ” Sure, towns like to blame it on the province, but we and our journalists don’t have to swallow this line. Yes, maybe taxes need to increase. Fine. Just say so and tell us why. Take responsibility and stop blaming increases on assessments [which needn’t be a dollar figure at all, just a weighted number to determine the portion of the tax burden each property owner should bear compared to his neighbour.]

But let’s get back to the article.

Despite the trying times, tax rates are staying largely the same in the Region of Queens.

Now this gives one the impression that somehow, despite a recession, towns are “holding the line” on spending and giving taxpayers a break. We are supposed to think “Thank God. The town isn’t asking for more by raising our tax rate. ” But no, if the tax rate stays the same and assessments are still on the rise (because even if house values are dropping there is a 2 year lag time in assessments in relation to the real estate market) then towns are taking more in, which they don’t have to if they don’t need to. They could drop the rate. Yes, they have that authority.

Just wait until assessments start to drop. Do you think towns will then say “we are holding the rate!” ? [Of course assessments may never drop as the Property Valuation Services Corp is paid by each municipality partially on assessment value. That is to say, the higher the assessments the more they get paid. This is not to say you will be able to sell your house for the assessed value. Assessment is not revenue and it is not equity.]

Further along in this article we see this statement:

Residential taxes will stay the same, with Districts 1-12 at 88 cents per $100 of assessment and District 13 (Liverpool) $1.85 per $100.

We repeat. Tax rates are not taxes.  This should read – ” Residential tax RATES will stay the same because we need more money to run the municipality.”

Business rates will go up eight cents across the board, to $1.99 per $100 in Districts 1-12, and $2.96 per $100 in district 13. The increase is due to phasing out the Business Occupancy Assessment.

This is accurate as far as it goes, but must be confusing. “The increase is due to the phasing out of the BoT.”  Why should phasing out a tax lead to an increase in taxes one might ask? A reader could pull out his hair. The reporter should explain that the municipality is replacing the BoT with its own compensating tax.  They blame it on the province again as if this is out of the municipality’s control. We’d like to talk about the BoT but perhaps in another post.  Let’s continue with this article (which is probably just copy fed to this reporter by the municipality).

However the Region’s revenue from property taxes increased by $400,000, due to property assessments going up across Queens Co.

They repeat this again. Revenue is going up due to property assessment increases. This is just not true. Assessments are not revenue, either for the property owner or the municipal unit. They should be saying something like: “We need more money to run the municipality so we are not going to lower your rate as we should when assessments go up. We need to spend it on roads, and schools, and retreats, and new flower beds and trips to conferences.” Or whatever.

The end of the article has mayor Leefe talking about what the taxpayers’ money will be spent on, which is fine as far as it goes. But explaining with pride that the municipality is getting funding from other levels shouldn’t make the taxpayer breathe a sigh of (tax) relief; remember he pays taxes to provincial and federal governments too. And if it comes out of reserves, it is money he has already paid, some might say over-paid.

The bottom line for residents is they have to pay attention to their local officials – elected and unelected – and demand honesty and frugality in the budget process. And remind them who they are working for.

One response to “Tax rates are not taxes

  1. You are right on!

    My own favorite peeve is any headline that goes like:

    “X funds project Y for Z”

    X = some politician, branch of government, or government bureaucracy
    Y = an often wasteful project
    Z = some squeaky wheel, usually.

    The headline should be:
    “Taxpayers fund project Y for Z”