Property tax pain is just beginning

Hey there, time traveller!
This article was published 03/02/2024 (692 days ago), so information in it may no longer be current.

The cost of everything is going up, making it harder to feed, clothe and house your family.

House prices have skyrocketed and your mortgage payments are likely going up. Have you seen the prices of new cars and trucks lately?

Groceries and other necessities cost way more these days. Water and sewer rates will double by sometime next year. Then there will be the usual rate increases for electricity and natural gas.

We’re in an affordability crisis, leading to an obvious question: How much more of this stress can you and your wallet handle?

That’s a timely question, given that Brandon City Council’s budget deliberations began yesterday, and are expected to conclude today with a property tax increase somewhere between five and 10 per cent.

In order to understand the impact of such an increase, let’s do some math. If your property tax bill last year was $3,500, roughly half of that was for city taxes, while the other half was for school taxes. That means the city portion was $1,750.

If city council approves a five per cent tax increase, your city taxes would increase by $87.50 for the year. That’s just $7.30 per month. A 10 per cent tax increase would amount to an increase of $175 for the year, or $14.58 per month.

If your total property taxes last year were $5,000, a five per cent city tax increase would increase your taxes by roughly $125 for the year, or $10.42 per month. A 10 per cent tax increase would raise your taxes by roughly $250, or $20.83 per month.

Those are just rough calculations, based on the assumption that city taxes make up half of your total residential tax bill, but you probably get the point: Viewed in isolation, even a 10 per cent property tax hike appears tolerable, especially after a decade of city budget increases that didn’t keep up with inflation.

There are at least five reasons why it would be a misleading mistake, however, to consider any tax increase this year in insolation and conclude it’s no big deal.

First, this year’s tax increase will be just one of many cost increases to hit Brandonites this year. Between higher mortgage payments, grocery prices and utility costs, many families are seeing their monthly costs increase by hundreds of dollars per month. A city property tax increase would add to that pressure.

Second, the Kinew government has restored school boards’ ability to increase school taxes. That means that the total property tax increase borne by Brandonites this year could include hikes by both the city and the Brandon school board. That would further worsen the affordability challenge for families.

Third, this year’s likely increase is likely just the first of many large property tax increases. The MNP report confirmed that big tax hikes are needed for the next several years in order to pay for planned city spending and replenish reserves. Under that plan, our property taxes could double over the next decade.

In other words, each year’s city budget will become more painful for Brandonites, making it increasingly difficult for many families to pay their respective property tax bills.

Fourth, Brandon already has some of the highest property tax rates in Western Canada. That is hurting our ability to attract economic investment, doctors and other professionals. Continuing to raise property taxes, especially the huge increases suggested by MNP, would make us even less competitive.

Fifth and finally, it is a mistake to focus on the size of the tax increase without also focusing on the way that city hall spends our tax dollars.

Over the past few weeks, city staff have repeatedly claimed that the MNP report concluded that the city was running a lean and efficient operation. That’s not exactly true. MNP was not asked to conduct a “value for money” review of the city’s expenses in order to identify potential cost savings.

In the (almost) 60 years that I have lived in Brandon, I don’t recall a “value for money” audit of the city’s spending having ever been done by an outside agency. For decades, we have been forced to unquestionably accept city hall’s claims that they are getting the best value for our money.

In effect, we have been told by people earning very large taxpayer-funded salaries to take their word for it. We’ve ignored the obvious conflict of interest. Did we honestly expect them to admit they were wasting our tax dollars?

Until a genuine, independent, detailed analysis of city spending is conducted — with the specific goal of identifying ways to save money and reduce the need for even higher taxes — Brandonites will continue to have no clear idea whether any tax increase is really justified.

Sometime later today, one or more councillors will likely emerge from the budget deliberations and tell the media that council did its best to keep this year’s tax increase at a reasonable level, and that the impact on taxpayers really isn’t that bad.

If you’re a senior living on a fixed income, a parent struggling to afford the cost of caring for your family, or a business owner struggling to stay afloat, you will likely have a different opinion.

Tax increase have consequences. In the case of this year’s increase, and the decade of increases that are coming, the pain is just beginning.