Doug Griffiths questions the economic value of condo dwellers

[SebC]

http://www.calgaryherald.com/news/al...130/story.html

Municipal Affairs Minister Doug Griffiths is facing heat for suggesting in the legislature Wednesday that urban dwellers in Alberta are leeches living off the work and resources of their country cousins.

“You could be asked by rural Albertans why 17 per cent of the population that lives in rural Alberta that has all the oil and gas revenue, does all the work, all the farms, all the agriculture and everything associated with it goes to support urban Albertans, who sit in highrise condos and don’t necessarily contribute to the grassroots of this economy,” he told the legislature.


[...]

Griffiths, who made the remark in response to a tax redistribution question from Liberal MLA Laurie Blakeman, later told reporters that’s not his personal view, but the view of some rural Albertans.


“I’m pointing out what rural Albertans feel,” said Griffiths, MLA for the rural riding of Battle River-Wainwright.


[...]

Blakeman, MLA for the downtown riding of Edmonton Centre, was pointing out the inequity of a linear tax that provides $28 per capita in urban areas compared with nearly $2,000 per capita in rural areas. The Liberal MLA said she wanted the minister to redistribute nearly $1.5 billion in tax revenue more fairly.

My take:

The "this is what other people say" aspect of his quote is true. However, anyone who thinks that should be told that condo dwellers are quite likely some of the people who get the least government spending for the tax revenue that they create. (I say quite likely because I don't have hard figures to back that up... Griffiths probably would so if he were to say it is quite likely that he would not have to temper his language as I did.)

[Slava]

Originally Posted by SebC

http://www.calgaryherald.com/news/al...130/story.html



My take:

The "this is what other people say" aspect of his quote is true. However, anyone who thinks that should be told that condo dwellers are quite likely some of the people who get the least government spending for the tax revenue that they create. (I say quite likely because I don't have hard figures to back that up... Griffiths probably would so if he were to say it is quite likely that he would not have to temper his language as I did.)

I'm not agreeing with what Griffiths said here, but this line is purely made-up. Services like health and education (which dominate the budget) are probably largely equal regardless of what kind of housing you have.

[Bring_Back_Shantz]

Sweet, I really hope this thread turns into an inner city vs suburbs debate!

[AR_Six]

Originally Posted by Slava

I'm not agreeing with what Griffiths said here, but this line is purely made-up. Services like health and education (which dominate the budget) are probably largely equal regardless of what kind of housing you have.

Did you read what they're arguing about? It's a rural vs. urban divide, not type of housing.

[SebC]

Originally Posted by Slava

I'm not agreeing with what Griffiths said here, but this line is purely made-up. Services like health and education (which dominate the budget) are probably largely equal regardless of what kind of housing you have.

What you're saying doesn't jive with the statistics quoted in the article, including the one I quoted in the original post.

[SebC]

Originally Posted by AR_Six

Did you read what they're arguing about? It's a rural vs. urban divide, not type of housing.

I actually considered making the thread title "Doug Griffiths gives suburban leeches and latte-sipping elitists a common enemy" but decided against it.

[Bigtime]

So since I moved from a cushy high rise condo to a single family home in Sunnyside do the comments still apply?

I heard that every latte you buy purchases 10cm of bike lane.

[burn_this_city]

Sure Doug, whatever you say. Farming isn't the grassroots of the economy, it's oil and gas, which is run by urban Albertans.

[Hack&Lube]

Without the engineers, geologists, accountants, landmen, investors, marketers, etc. that live and work in urban cities in the O&G industry, the Albertans who work in the rural field would be digging random holes in the ground extracting dirt...

[Bunk]

The debate is about how much of the linear assessments go to rural municipalities vs urban ones. This is one of the peculiarities of finance in Alberta.

Agricultural properties don't pay market-assessed property taxes. As such, this is not a significant source of revenue for rural municipalities, like it is in all other provinces. These areas are almost exclusively funded by linear assessments (pipelines and stuff). So those areas that have lots of pipelines are flush with cash, while others that don't, starve.

Blakeman's argument, I think, was that linear assessments should be shared more proportionately urban and rural.

In fact, the whole system of financing urban and rural municipalities needs to be fixed.

Griffiths started his response by making cogent points about rural infrastructure challenges, not sure why he started on about urban dwelling freeloaders. It was very odd indeed - especially for a municipal affairs minister.

"sitting in high rise condos" as a pejorative. hmm.

[peter12]

The wealth of the cities supports the countryside.

[burn_baby_burn]

Originally Posted by burn_this_city

Sure Doug, whatever you say. Farming isn't the grassroots of the economy, it's oil and gas, which is run by urban Albertans.

True, however all the oil and gas in the world wouldn't do anyone any good if there wasn't any food.

One could argue that a large number of the people running oil and gas live in rural Alberta. Acreages's or hobby ranches west of Calgary.

[First Lady]

If you want to see the full exchange you can find it here:

http://assemblyonline.assembly.ab.ca...tEntityId=1275

Fast forward to 56:00 minute mark. This questioning was only about 3 mins long.



On a sidenote: I'm not too impressed with the use of Game of Thrones theme music being used at the beginning of the broadcast each day.

[GP_Matt]

This is definitely an urban v. rural debate and the Linear Tax is a huge deal. (I am not sure why it is referred to as a tax)

Please correct me if I am wrong, as my understanding is definitely that of a layman but...

Municipalities all receive cash from the province to maintain their roads. The province pays based on a formula that is essentially x dollars per metre of road. There is no consideration if the road is a single land gravel road or a 6 land asphalt one, both get the same amount of money. This means that a large county with a lot of roads and very few people receives $2000 per capita for road maintenance while cities get closer to $28 per person to maintain their own road network. It doesn't really make any logical sense and really distorts the property tax rates between urban and rural. Another contributor that wasn't mentioned is that urban areas have to pay for their own police force while in rural areas the policing is free.

As a concrete example, in Grande Prairie, the county has started building subdivisions surrounding the city. These are normal subdivisions that you would find in any city with a bunch of houses and almost no services right on the edge of the city. They openly advertise that the taxes are 46% lower than in the city.

[Slava]

Originally Posted by AR_Six

Did you read what they're arguing about? It's a rural vs. urban divide, not type of housing.

Originally Posted by SebC

What you're saying doesn't jive with the statistics quoted in the article, including the one I quoted in the original post.

Oh I understand what they're arguing about. All I'm saying is that the services provided by the government are wide-ranging and much of the funding is health and education. Its one thing to argue about where every dollar comes from, but at the end of the day it all goes to one big pot. To suggest that condo dwellers somehow require less is only looking at a small slice of the pie. That's all I'm saying here.

[SebC]

Originally Posted by GP_Matt

This means that a large county with a lot of roads and very few people receives $2000 per capita for road maintenance while cities get closer to $28 per person to maintain their own road network. It doesn't really make any logical sense and really distorts the property tax rates between urban and rural. Another contributor that wasn't mentioned is that urban areas have to pay for their own police force while in rural areas the policing is free.

Thanks for the explanation... I take it the linear tax is specifically earmarked for roads?

[bizaro86]

Holy sweetness. So there are complaints that rural Alberta might be paying more than it's fair share?!?! That's a load of brown bananas.

Property taxes on farmland aren't based on the assessed value of the property, they're based on a formula the minister of agriculture develops every year. The formula means farmland pays taxes at approximately 10% of it's assessed value. For the municipal portion, I don't care. If the County of Wheatland wants to move it's tax base from farmers to what little housing/industry it has, more power to them. But it's patently unfair when it comes to the provincial/education portion of the property tax. Farmland isn't paying anything close to it's fair share, which means it's being subsidized by housing in cities, industry, commercial, etc. Everyone else is paying more tax so they can pay less.

And then they complain about the linear taxes. Those are taxes on pipelines/powerlines. Rural areas have more of those, and they use them to fund their services. Of course, having a pipeline in your county doesn't require much for services... Basically, they're taxing pipelines at high rates and farmland at low rates, and then complaining that county residents are getting screwed.

[bizaro86]

Originally Posted by SebC

Thanks for the explanation... I take it the linear tax is specifically earmarked for roads?

Nope, the linear tax is property tax charged on special types of property. The list is:

Pipelines
Wells
Power Generation
Power Transmission/Distribution
Cable Lines
Telecom Lines
Gas Distribution

The assessment is based on formulas, and then the municipalities/province charge the owner of the item property taxes based on the assessment.

[SebC]

Originally Posted by bizaro86

Nope, the linear tax is property tax charged on special types of property.

Right, but Blakeman and GP_Matt make it sound like the province collects this, and then distributes it based on the length of roads in the area. Is that correct?

[GP_Matt]

Originally Posted by SebC

Right, but Blakeman and GP_Matt make it sound like the province collects this, and then distributes it based on the length of roads in the area. Is that correct?

I think I was confused. The road payout might just come from general revenue. It is still a large chunk of cash to rural areas though.