2016 property tax increases

[V]

Originally Posted by CaptainYooh

For the past 25 years, my municipally-supplied utility services (electricity, water, sewerage, garbage collection) remained of the same quality.

With the above in mind, my costs for buying these services should have remained relatively flat or, at best, growing at the rate not higher than the annual inflation of 3%. You cannot dispute that they have grown at a substantially higher rate than that

Funny what years of unchecked sprawl will do to your utility bills. You expect your utility to spend millions upon millions of dollars in capital every year, then don't ask the new tax base to cover those capex and opex dollars, and then you complain that your utility rates are going up? What do you expect?

[ken0042]

Originally Posted by Jacks

Where are you getting that from?
Says they got 50.03% from what I can find.
http://www.lop.parl.gc.ca/ParlInfo/c...ultsParty.aspx
https://en.wikipedia.org/wiki/Canadi...election,_1984

Yeah- saw that after. For a Poly Sci essay in the days before the Internet as we know it- the two sources I had showed under 50%. I didn't bother to correct my post- as the point kind of stands that the NDP (and previous PCs) did not have more than 50%; and one of the biggest landslides in history barely cracked 50%.

[Tacopuck]

Finally took a look at mine, 10% increase from last year....

[calgaryblood]

15% increase for me...don't understand how my property value went up in this market. Did no work to my house. Maybe I'm just ignorant on how these valuations go.

[Bunk]

Originally Posted by CaptainYooh

Rhetoric? I don't look at what the Administration says to justify its bloated budget. I look at what I receive as a resident of Calgary from the municipality that charges me for their services.

For the past 25 years, my municipally-supplied utility services (electricity, water, sewerage, garbage collection) remained of the same quality. The streets I drive on receive the same or worse level of maintenance (e.g. snow used to be removed from my cul-de-sac fairly quickly, nowadays, it is not removed at all). The level and quality of policing, firefighting and EMS services remains of the same quality that it was for 25 years.

With the above in mind, my costs for buying these services should have remained relatively flat or, at best, growing at the rate not higher than the annual inflation of 3%. You cannot dispute that they have grown at a substantially higher rate than that (in fact, the only utility that costs less today than 25 years ago is telephone, and it's no longer supplied by the government). Growth of the city demands more volume of services, yes, but that should be a revenue neutral relationship - more taxpayers, more revenue, same or better costs due to economies of scale.

Instead, City has switched to market value assessment system, where a household that happens to be in a higher-priced community pays more taxes for the same level of services received. In addition, condominium owners are forced to pay taxes for the services they pay for already through their condo fees; which, you can't disagree is absolutely a double taxation. But hey, that's OK, who's gonna complain, only those rich people in Mount Royal, right?

So, it's not (should not be) the growth. What's next? Intangible investments in municipal betterment - public transit, arts, community programs, bike lanes, parks, sports, recreation, events, etc. These costs should be budgeted in accordance with targeted revenue - not the other way around (we set the wish list of programs and then see how high we should/can raise taxes to squeeze as many of them as possible).

Back to my original post: when was the last time the Administration cut wages to its staff due to the market condition? Ever? Because they have certainly raised them during booms! When was the last time Council cut their pay? City of Calgary has one of the most generous benefit packages and pension plans. When was the last time these packages have been re-evaluated and, perhaps, trimmed down? Ever?

So, no, no rhetoric, Josh. Taxes should not have been going up at the pace they have. No way.

Expenses have gone up less than inflation and population growth - that's the true measure of restraint. Residential property taxes only pay for a fraction of the expense so it's not a 1:1 relationship. Of late, property taxes are also covering more capital to keep up with maintenance and growth as grants from other levels of governments for all sorts of infrastructure has failed to keep pace.

Nonetheless, let's remember Calgary has among the lowest property taxes of any city in the country. At the same time, we have very, very high levels of citizen satisfaction in those services. There's people who whinge, but generally people are very happy with their services and their quality of life here.

As per wages, we also have to remember we live in a very high income community. Public sector is also competing with private industry for talent and labour. I know people bitch about their wages in downturns, but they also don't reap nearly as much benefit in good times as the private sector on average. Take the good with the bad.

In addition, condominium owners are forced to pay taxes for the services they pay for already through their condo fees; which, you can't disagree is absolutely a double taxation.

Such as?

Are you talking about recycling? Condo owners don't pay that tax, condominiums are now required under by-law to provide that service themselves - through their condo fees. No double taxing.

Instead, City has switched to market value assessment system, where a household that happens to be in a higher-priced community pays more taxes for the same level of services received.

What would be a better way? It's the same with income taxes at the provincial level or federal level. More income, pay more, same services. In the absence of an income tax rather than property tax, don't know how'd you'd find a better proxy related to ability to pay.

[Bunk]

Originally Posted by stampsx2

You should take a look at how much money goes into inner city maintenance as well. The inner city is also getting a $300 million library.

I don't use a lot of city services as well but have to pay for it.

There's not a moat, you can use the central library too. It's also not a library branch, it's the central library, meant to serve the entire city.

[Bunk]

Originally Posted by calgaryblood

15% increase for me...don't understand how my property value went up in this market. Did no work to my house. Maybe I'm just ignorant on how these valuations go.

Usually values lag a bit. First, because it's based on July of the previous year. But second, because they make adjustments based on real transactions that occur for comparable properties, which obviously can only be in the past as well.

[CaptainCrunch]

All I know is that you can literally feel the anger in this city over the tax increases, In Boston they threw Tea into the Harbor as a tax revolt, What are we going to have in Calgary? The Calgary Yop Party?

[Bunk]

One thing that would be helpful, that hopefully I can help clarify, is how budgeting, city revenue and property tax calculations actually work.

The first thing to know is that property taxes account for about 42% of the City's Operating Budget. Residential property taxes alone account for about 20% of the City's budget.

The rest is below



Of your total residential property tax bill, ~60% goes to the City, 40% goes to the Province for education.

Of your portion that goes to the City, the majority pays for operating, and I believe about 10% of it now goes to capital.

The way the City budgets and calculates the property tax rate ("mill rate") is not what most people understand. Whereas the Province and Feds have fairly steady tax rates, and as incomes go up and the economy grows, so does the tax take, the City with residential rates calculates on a "revenue neutral" basis each year to start. So even though the assessment base (usually) grows, and population and new businesses grow, the first step the City takes is to manually adjust (down) the mill rate such that it would derive the same revenue from the previous year. Then, based on the budget required to provide services, including consideration for anticipated inflation (usually 3-3.5%) and population growth (usually 2-3%), the City adjusts the mill rate (up or down) to derive what the City thinks it'll need. In highly inflated property value years, the tax take can go up, even though the mill rate is adjusted down substantially (circa 2006-7 was a good example of this).

So when you hear there's a "5% tax hike" what that really means is not that the mill rate, or your taxes specifically have gone up 5%, it's the amount of money the City will collect more than the previous year. Remember, inflation + population growth combined is usually about 5-6%.

Municipalities are also prohibited to run operating deficits. So that's why it takes a manual adjustment approach, whereas the Province and Feds revenue grows naturally, but they have the flexibility for large swings between deficits and surpluses. Politically it's much harder to face the headlines of "tax increases" every single year, even though their revenue growth is almost identical to the other two levels of government. You could argue that's a good thing, because it pressures more discipline. I recall one year, Calgary property taxes went up 6% and Redford criticized, even though that was almost exactly population + inflation in a red hot year. The same year, the Province's equivalent revenue from personal and corporate taxes went up like 14%, but no one screamed "oh my god, taxes went up 14%!!". A good example of the difference politically and practically of the two taxation systems.

To add more fun, The City sets its budget in November and has to presume how much the Province will want to take for its share, when it sets its budget in march, and then has to re-adjust in April if there are discrepancies.

In the past they used to just take the same increase as the City set. In 2011-13 they took almost no increase (for some peculiar reason). Facing no new infrastructure money, the Council decided to "take the tax room" the province left. They adjusted the municipal portion up, so the blended rate of say "4.5% increase" was the same as promised in November, but instead of it being 4.5 City and 4.5 Province, it was like 11% City and 0% province. Over three years that resulted in about $100m annual ongoing capital dollars we spent (so far) on libraries, the 4 new rec centres, a bunch of backed up lifecycle maintenance for facilities, and our 1/3 of the green line LRT. This year it was the opposite, the City increase was 3.5% and the Province was up around 11%.

Clear as mud?

[Fuzz]

So Bunk, if I'm reading that correctly my taxes went up 6%, which actually means minus the provinces take (6-11= -5) plus the city's( -5 + 3.5= -1.5) it means the city actually dropped my taxes 1.5% but the provincial portion over rode that? Is my math right? In which case...grrrr Notley?


/math pre-coffee, may need to adjust.

[calgarywinning]

Originally Posted by Bunk

One thing that would be helpful, that hopefully I can help clarify, is how budgeting, city revenue and property tax calculations actually work.

The first thing to know is that property taxes account for about 42% of the City's Operating Budget. Residential property taxes alone account for about 20% of the City's budget.

The largest resource by far for operating the city and the most important to the city. Basically property tax is the cash cow. See below on this.

The rest is below



Of your total residential property tax bill, ~60% goes to the City, 40% goes to the Province for education.

Of your portion that goes to the City, the majority pays for operating, and I believe about 10% of it now goes to capital.

The way the City budgets and calculates the property tax rate ("mill rate") is not what most people understand. Whereas the Province and Feds have fairly steady tax rates, and as incomes go up and the economy grows, so does the tax take, the City with residential rates calculates on a "revenue neutral" basis each year to start. So even though the assessment base (usually) grows, and population and new businesses grow, the first step the City takes is to manually adjust (down) the mill rate such that it would derive the same revenue from the previous year. Then, based on the budget required to provide services, including consideration for anticipated inflation (usually 3-3.5%) and population growth (usually 2-3%), the City adjusts the mill rate (up or down) to derive what the City thinks it'll need. In highly inflated property value years, the tax take can go up, even though the mill rate is adjusted down substantially (circa 2006-7 was a good example of this).

Well we need to devise the formula. Market value with is a subjective broken formula the city is constantly tinkering with is the feeder to the "REVENUE NEUTRAL" mill rate. Where the city the revenue neutrally takes what it wants by exercising it's right under the MGA to set the mill rate.

Revenue neutral is political double speak.

So when you hear there's a "5% tax hike" what that really means is not that the mill rate, or your taxes specifically have gone up 5%, it's the amount of money the City will collect more than the previous year. Remember, inflation + population growth combined is usually about 5-6%.

Precisely this. Taxation hike, but it's not tax. City double speak. One could argue efficiencies in larger populate cities. Inflation indexes are published by government. I prefer to seek a government that does proficiency and optimization tax non increases or budget neutral increases of taxable population. But this is double speak as well.

Right now as we speak the City is busy at work doing expensive concrete work and replacement on perfectly good sidewalks on McLeod and all through inner city. NOTHING wrong. But, the mill rate has been set to be revenue neutral.

Okay, so let's really look at this, the average tax rate increase is 4% but it's not 4%, because they use market value sales approach to jig you to 10%. But market value is revenue neutral, but what they don't tell you at the city is that the assessor chooses the properties they compare you to. It's not an aggregrate of everyone on your street, it's the extremes or the most expensive houses. It's purely at their discretion.

I know I am stupid, but if we get the maximum market sales approach evaluations, doesn't it make it easier to set the mill rate lower? And each increase is substantially higher if I have every home pinned at it's maximum sales price.

Also, this department since Nenshi took over will not be reasonable or have a reasonable conversation with you about market rate. Instead, like Bunk they have propagandized themselves with the righteousness.

Why do they use this? Well it makes up 42% of their revenue. But, lets' now take you a property owner and divide you up against a hard working business owner. Now as a residential owner you are at 20% of city neutral revenue, so you aren't bearing the brunt business is. Which is true because you take the 22% and add the 8% (or so) from business tax and business is burdened.

Guess what business is subject to market valuation on business tax side and property tax side.

The real deal is the City has fortified and aggressively amped up it's property valuation team. You are an individual, they are a team that do it 365. These are the stories they will tell you.

The only true honest tax assessor from the City of Calgary told me, we throw as much crap to the wall and see what sticks. The new team doesn't believe in the same philosophy, they throw as much crap to the wall to see what sticks and then they stick it to you. They know it's the lifeline of revenue to the bureaucracy of the city and the departments. The number one cash cow at the City of Calgary are the property assessors, they have quadrupled in size not in relation to inflation or population.

Municipalities are also prohibited to run operating deficits. So that's why it takes a manual adjustment approach, whereas the Province and Feds revenue grows naturally, but they have the flexibility for large swings between deficits and surpluses. Politically it's much harder to face the headlines of "tax increases" every single year, even though their revenue growth is almost identical to the other two levels of government. You could argue that's a good thing, because it pressures more discipline. I recall one year, Calgary property taxes went up 6% and Redford criticized, even though that was almost exactly population + inflation in a red hot year. The same year, the Province's equivalent revenue from personal and corporate taxes went up like 14%, but no one screamed "oh my god, taxes went up 14%!!". A good example of the difference politically and practically of the two taxation systems.

Yes, both are on a taxation regime that is unending. Glad to see you reveal the provincials are even more self-serving than the municipalities. Maybe they have 99 problems and a city ain't one. They are so BAD we are GOOD. Political double speak. No, you both aren't good, but you missed a few sidewalks that actually did need repair on McLeod. Want pictures?

To add more fun, The City sets its budget in November and has to presume how much the Province will want to take for its share, when it sets its budget in march, and then has to re-adjust in April if there are discrepancies.

In the past they used to just take the same increase as the City set. In 2011-13 they took almost no increase (for some peculiar reason). Facing no new infrastructure money, the Council decided to "take the tax room" the province left. They adjusted the municipal portion up, so the blended rate of say "4.5% increase" was the same as promised in November, but instead of it being 4.5 City and 4.5 Province, it was like 11% City and 0% province. Over three years that resulted in about $100m annual ongoing capital dollars we spent (so far) on libraries, the 4 new rec centres, a bunch of backed up lifecycle maintenance for facilities, and our 1/3 of the green line LRT. This year it was the opposite, the City increase was 3.5% and the Province was up around 11%.

Clear as mud?

Yes, mud for the citizens. Also, Bunk... I would challenge you to really study the formula. Too pull some of the complaints from the Assessment Review Board and some of the gross negligence from the City Property Assessors and other departments behaviour in the last 8 years. You can be at a tribunal hearing and City Property Assessors will use realtor.ca listings to justify their assessment. A listing is not a sale and not a comparison! Gross misconduct. These assessors do not relinquish a supposed refuted fact and argue against the citizen in an experienced manner, which is their right, but the citizen is left no recourse.

I had a lot of respect before for the city systems and the property tax assessors and how they treated the citizens in the past. You could dialogue, express and come to a solution, even if a compromise. Now it's a blunt beating for anyone that speaks out. Taxation and inflation are obviously as inevitable of death, but being responsible and providing maximum service and not forgetting who pays the salaries is even more important.

I can't say for every generation, but for mine I want efficiency and advantage. If I am paying more in taxes it's not a formula, there is a net benefit to the populance.

And here is finally what I have learned about market valuation and revenue neutral and mill rate. Is every time my market value gets jigged, i pay more revenue and my mill rate goes up. But don't worry fine citizens, the formula, the charts and the math are fine.

The net effect is your argument is poo poo from the city, because of inflation, because of the services you receive so pay more. Don't ask for more. If you ask for more we will do a survey asking you what you would like less?

Actually, it would be great if Bunk would listen. Might start a trend.

[GGG]

The above post is crap because the valuations don't affect how much revenu the city collects. The valuations only affect the relative amounts each person pays.

The city collects their required number regardless of what portion each person pays. So the city doesn't really have an interest in whether your assessment is high or low.

[Bunk]

^ precisely. There is no motivation for the City to bump overall assessments up because mill rate then just adjusts down to derive the same revenue. The goal is accuracy and a real underlying motivation if you could point to one is to reduce the number of appeals.

[calgarywinning]

Originally Posted by GGG

The above post is crap because the valuations don't affect how much revenu the city collects. The valuations only affect the relative amounts each person pays.

The city collects their required number regardless of what portion each person pays. So the city doesn't really have an interest in whether your assessment is high or low.

Not true. Input for a formula. The higher the evaluations the higher the tax paid.

The city then adjusts the amount it collects. Condo tower with 200 new residents? New revenue stream, that does not reduce what everybody pays in taxes. New house on an old lot, new revenue stream. R2 Split in Altadore, new revenue stream. Therefore market value is applicable. There is a reason there is a team of people working on pinning market value to the maximum.

Even in this forum people are wondering why their city taxes have gone up for 10%. Partly because of market value.

This blending is not the goal, where everybody pays their share based on the market value of their home. Simply put, pin the market value to the max then set your revenue neutral need.

[Kavvy]

Lets pretend our City Hall is as efficient as it gets.

Our City has no debt, and has $375 mill sitting in a "Rainy Day Fund". It would take $45 mill to keep this year's tax burden the same as last year.

People are hurting bad, cutting services may hurt those who need it most. Raising the tax burden hurts everyone.

Why are we not using this fund now? We are way past rainy, the thundershowers are on us.

Nenshi do your job and advocate the use of this fund! Plan for this downturn to take 7 years and spend it dry by the end of those 7 years if you need too. People are hurting.

If we can't use our contingency money in times like these, why is it there?

[Fuzz]

Probably there for if the city goes Full Detroit.

[calgarywinning]

Originally Posted by Bunk

^ precisely. There is no motivation for the City to bump overall assessments up because mill rate then just adjusts down to derive the same revenue. The goal is accuracy and a real underlying motivation if you could point to one is to reduce the number of appeals.

I would say the throngs of people down at the ARB would highly dispute this. You used to get your own trial, now you get to spend an entire half day with 4 others cases to be heard.

[Flash Walken]

Originally Posted by Kavvy

Lets pretend our City Hall is as efficient as it gets.

Our City has no debt, and has $375 mill sitting in a "Rainy Day Fund". It would take $45 mill to keep this year's tax burden the same as last year.

People are hurting bad, cutting services may hurt those who need it most. Raising the tax burden hurts everyone.

Why are we not using this fund now? We are way past rainy, the thundershowers are on us.

Nenshi do your job and advocate the use of this fund! Plan for this downturn to take 7 years and spend it dry by the end of those 7 years if you need too. People are hurting.

If we can't use our contingency money in times like these, why is it there?

lol.

[Kavvy]

Originally Posted by Flash Walken

lol.

I admit I am far from an expert on City Taxes and budgets - still learning!

However, perhaps explain your sarcastic response? Treat people with respect!

[Flash Walken]

Originally Posted by Kavvy

I admit I am far from an expert on City Taxes and budgets - still learning!

However, perhaps explain your sarcastic response? Treat people with respect!

Your rainy day fund is for an actual rainy day, like if interest rates go to 18 percent and people start walking away from their houses and the city suddenly loses 10% of it's revenue. Nenshi Bucks isn't going to solve anything.