Rhino's Ramblings - A 13.22 Percent Taxing Affair
A look at what the proposed increases in property taxes levies, franchise fees and water and sewer rates mean to a property owner who in 2022 paid $1,500 in property taxes.
By Robert Thomas Opinion/Commentary
For those of you who don’t know it we are once once again at the time of year where once again the seven individuals who make up Moose Jaw City Council are being asked to approve the budget for 2023.
As usual the budget is out there with its needy hand stretched out asking for what might be called an anemic increase barely matching inflation for some while others will say it is yet another insane cash grab and the seven inmates making the ultimate decisions are already intoxicated by the Kool Aid fumes.
No matter which way you take a look at it Budget 2023 is about to hit you straight in the pocketbook and for those of you in the lower valued properties - most often people on fixed incomes - the City is once again has its hands on your wallet.
This year you are about to get a major wallop that is masquerading as a benevolent brother with his arm around your shoulders while all the while trying to stick it to you in your hiney.
And yes that is just how severe things are becoming.
To help illustrate my statement I am going to equate the proposed budget into not an average home as the City of Moose Jaw defines it but into a more modestly valued home people of lower economic means and on fixed incomes reside in - one with a $1,500 property tax bill in 2022.
Parks and Recreation Permanent $100 Levy - Additional 6.67 % property tax increase
Take a look at the new $100 Parks and Recreation Department’s request for a permanent levy or as it will be called on your property tax bill a $100 Flat Tax.
This is by far the most damaging revenue grab in the entire 2023 Budget - especially you are on a fixed income and you live in a modest home to keep your expenses down.
Let me explain it to you this way and I will base it on a moderately priced home in the Avenues to make it easier for people to understand.
Let’s say your property tax bill for this home was $1,500 in 2022 - including the $100 infrastructure levy oops I mean flat tax - now the powers to be at City Hall want to add an additional $100 flat tax to help pay for recreation facilities.
Facilities the claim is made that we all use and benefit from - a claim that is not only rooted in some ancient Medieval joust but dead centuries ago.
Partially an admission we cannot afford the facilities we already have and need money to keep them going.
But let’s go back to our example of a home with a property tax bill of $1,500 in 2022 adding an “affordable” $100 Park and Recreation levy to your 2023 tax bill is in fact a 6.67 percent increase in 2023 from your 2022 property tax bill.
Many will argue the $100 levy is fair while others may look upon it - as I do - as just another expense making it more difficult for for fixed and low income earners to remain in their homes.
One of the big arguments for the $100 levy is that it is going to be used for replacing the present Phyllis Dewar Outdoor Pool - a pool which the City wants to down size and then add more recreational opportunities for children and families.
The days of pools three feet deep that toddlers cannot really venture out into are a relic of the past it seems.
One of the driving forces for the new pool is the “fact” the pool is leaking.
The facts though might very well be deceiving and that is the City managed to repair the leaks in the pool and the days of losing water out of a pool with a built in sieve are days gone by.
Could we not simply buy the new filtration equipment and put it in a small building like they do at Buffalo Pound Provincial Park and winterize it each year?
And what about the Natatorium building itself? Is the heat actually being turned off in the winter meaning in a couple of years the building is actually done for?
Are we being led into the deep end of a new pool and suddenly drowned in it when it comes to this new flat tax?
Moose Jaw Police Service - Additional 1.8 % Property Tax Increase
The Moose Jaw Police Service (MJPS) is once again seeking a major increase in their fight against crime.
According to the MJPS they require the additional resources to fight crime. Crime which has really gotten out of line according to the MJPS in their public request for the additional $612,933 overall.
There may be other reasons for the request by the MJPS but they may have been presented in-camera (in secret) at the November 14, 2022 Executive Committee meeting.
It should be noted that the MJPS was not fully staffed in 2022 but the funds for the personnel did not go back to the City’s coffers but rather to the MJPS’s accumulated surplus.
The MJPS along with the Moose Jaw Fire Department are the main entities funded through the Protection of Persons and Property in the Operating Budget and in 2021 made up 45 percent of the City’s Operating Budget.
The Operating Budget is primarily funded by property taxxes.
City Tax Increase - Additional 4.75% Property Tax Increase
Inflationary pressures are something everyone has faced this year.
The price of food, the price of energy and the price of just plain living has been going up in leaps and bounds.
To restrict the money supply and drive the inflation rate down the Bank of Canada has been consistently increasing the prime lending rate making it more expensive for consumers and businesses to borrow money.
In theory making borrowing and in theory life more expensive it should drive down inflation to the Bank of Canada’s target two percent rate.
However the City of Moose Jaw is not cutting back in their programs and expenses in 2023 and as such the taxpayers - who are facing inflation and increased costs to borrow - will be footing the bill.
Although they have not said it yet the City has throughout the years always responded what program are citizens willing to cut in an effort to keep tax increases down.
Council in response has usually not responded with any concrete answers on what to cut.
So What Does It All Add Up To????
For our average home where the property owner paid $1,500 in property taxes in 2022 your property tax bill is in reality going up 13.22 percent.
The calculation is based upon 6,67 percent for the new $100 Parks and Recreation Levy plus the 1.8 percent increase for the MJPS plus an additional 4.75 percent property tax increase.
6.67 + 1.8 + 4.75 = 13.22 percent tax increase for a home paying $1,500 in property taxes in 2022
For our example home that means in reality it will cost you an additional 199.85 in property taxes in 2023 versus 2022
$1,500 plus $199.95 = $1,699.95 2023 Property Tax Bill
But There Is More coming up in the way of rising costs making it more difficult for you to remain in your modest home.
Water And Sewer Increases
With the shape of the City’s water and sewer system as well as the need to do upgrades - this year in South Hill coincidently heading west along Coteau Street West heading towards the new proposed school - there is going to be corresponding increase in sewer and water rates.
The City this year is also seeking increases in water and sewer rates in order to pay for necessary renewal, repairs and upgrades to the system.
The water rate is going up four (4) percent or $2.86 a month for the average residential customer.
The sewer rate is going up three percent or $1.72 a month for the average residential customer.
You know the cost of a large coffee so really who is going to miss it is likely something that we are going to hear from City Hall.
If you are financing your service connections to your home through the City the cost is going to go up as the four (4) percent they have been charging those who finance new water and sewer lines from the main lines to their home is going up to seven (7) percent.
It is all about the Prime Rate going up and the City being able to make more money in the bank than they are making off of home owners who finance through the City.
The Hidden Tax Franchise Fees
The problem with the whole argument has to deal with the Franchise Fees the City pays itself from the utilities funds.
It is by every definition of the word a hidden tax and it is sadly growing each year.
In 2023 the Franchise Fee being paid by the water utility is budgeted for $660,604 in 2023 up from $637,044 in 2022 or 3.7 percent.
In 2023 the Franchise Fee paid by the wastewater (sewer) utility is budgeted for $468,574 in 2023 up from $457,728 or 2.4 percent.
Additionally there is a Franchise Fee of $809,275 charged to the Solid Waste Utility in 2023 versus $922,990 in 2022. A reduction of $113,715 or 12.3 percent.
If you add it all up it means the City is planning to transfer $1,938,453 in franchise fees to the City’s operating budget in a year where our typical home will be facing a 13.22 percent tax increase.
In my opinion this is a hidden tax and this year a tax increase in its finest.
If you were to transpose this to the approximate $300,000 each one (1) percent of the mill rate equates to you are speaking about a hidden tax of approximately six (6) percent.
It is hidden tax because can you imagine if Administration put the money into the utilities - to help keep them self sustaining and having reserves to get their work done - and asked for the amount as part of regular property taxes?
By using levies and franchise fees what City Hall is doing is playing a public relations trick by hiding what it costs to actually live in Moose Jaw into ever more hidden and “small’ costs they hope you don’t notice.
It is the same with Budget 2023 itself - there is in fact a PR trick in all of this.
Although it took months to bring together the 900 page budget for 2023 was really made public last weekend just days before a major Council meeting on Monday which had hundreds of pages to read.
Was it intentional? Sorry I have no proof of that I will leave it up to the reader to decide.
But what I can tell you is this is as part of the November 28th post Council media scrum Moose Jaw Express reporter Jason Antonio asked about the 900 page budget and if Mayor Clive Tolley had read it.
Mayor Tolley said he had not read it in its entirety but left it up to the experts in Administration to know the details. He also intimated there will be others - looking at me - who would find any potential problems with it.
So I wrote this column and the major impact Budget 2023 is going to have on those homeowners of lower economic means. The majority of residents in Moose Jaw. The ones like you and me with the smallest voice.
For people who are lower income and on fixed incomes this year’s proposed property taxes are going to be a tough pill to swallow.
Where is Mayor Don to defend the interests of the poorer homeowners who truly make up the backbone of what Moose Jaw truly is?
The City Budget for 2023 is scheduled to be wrapped up in two meetings over the next week.
I will end this week’s column with a message a reader sent to me:
Good afternoon.......I want to thank you so much for the stories you do, and the truth you pursue. When others would stop, you just keep going. The citizens of Moose Jaw deserve being told the truth. Thank you!!
- thank you for making my day :-) Robert