Predictable, steady increases
No one likes taxes, but no one likes having a pot hole-filled road, an impassable bridge or a rundown library with no books.
Taxes are inevitable; it is our rent for living in this country. However, how is it that some municipalities are seeing two per cent tax levy increases while others are seeing 13% increases?
Tax shock comes when the levy increases are minimal year over year then suddenly spike when a critical project requires funding. Out come the pitchforks, because people do not like large tax increases.
If municipalities used long-term forecasts and had a predictable increase year over year, they could plan those critical projects.
For example, if a municipality knows it needs $10 million for an upgrade to a wastewater facility in 10 years, it could spread the required levy increases over those years.
Townships need to cut spending where they can, but infrastructure is not one of those places. Municipalities should stop focusing on keeping taxes low to appease taxpayers but should instead spend dollars efficiently.
There are 13 bridges closed in Centre Wellington and of the 49 bridge and culvert structures in Erin, 25 of them need repairs.
Keeping taxes low to appease people doesn’t fix bridges.
Build trust, keep levies low
It’s budget time again and local municipalities are undoubtedly scrambling to set a tax levy that simultaneously raises the required funds and keeps ratepayers from rising up in revolt.
That’s a tricky tightrope to walk. Nobody likes forking over cash to an intangible cause.
A number of municipalities have decided to keep tax levies high year after year to build up reserves for future projects. But this is difficult to justify to ratepayers (“we’re taking your money to put it in the bank so that in the future we can use it when we need it”).
What about other ways the ratepayer could have used the money had it remained in their possession (or in their own bank)?
While keeping taxes high to build reserves may not sit well, let’s face it, municipalities need taxes for roads, bridges, new facilities or a number of other services.
The answer might be to keep tax levies low so the municipality can run its day-to-day business and then have staff look at cost cutting within all departments so tax dollars stretch further.
When specific projects arise requiring more funds, the municipality will likely be able to justify a higher tax levy, as there is a tangible need at hand.
The trust built over the long term also means ratepayers know taxes will level off eventually.