Councillors here are hoping a complaint to county Warden Chris White might lead to some action on the way the province handles taxes on farms and managed forests – but they are not going to hold their breath.
Finance director Mike Givens presented council with a report last month about what municipalities see as a tax inequity for those two types of land.
Farmland represents 40 per cent of Mapleton’s current value assessment. The problem is much of it is not taxable by the municipality – which leaves other township ratepayers to make up the shortfall.
The issue goes back over 20 years.
“Prior to 1998, owners of farmland property paid their taxes to the municipality and then, subject to meeting eligibility criteria, applied to the province to receive a rebate of 75% of the taxes paid,” Givens wrote.
But, he said, assessment reform in 1998 transferred the funding responsibility to municipalities. The province set a 0.25 tax ratio on farmland – or 25% of the residential tax rate.
Givens said the lost tax revenue “from farmland properties within a given municipality is therefore funded in full through higher tax rates within the municipality.”
He added the same issue exists for managed forests but the cost impact is on a smaller scale.
“Just as with farmland, this property class carries a 0.25 tax ratio, with the forgone property taxes funding by the remaining property owners in the township.”
Givens offered a spreadsheet that showed the effects of the policy. Farmland in 2011 provided $437,796 in property taxes under the current system. Under the previous system, it would have provided $1.75 million in taxes.
Managed forests in 2011 paid $4,214, while under the old system the township would have collected $16,857.
Givens said the funding shortfall amounts to $607,831 per year the township has to find through taxes to everyone else.
“This is not the first time we’ve looked at this sort of report,” he added.
Mayor Bruce Whale said he remembered there was a great deal of lobbying amongst farm groups prior to 1998, because members did not want to continue to wait for their rebates after paying full taxes through the year.
He added when the provincial government changed rules to eliminate that wait, those farm groups did not realize the brunt of the costs would fall on municipalities.
Councillor Mike Downey wondered if municipal lobbying would help.
“I know we’ve done it in the past,” Downey said. “We’re down $600,000 every year.”
He added he suspects farmers, under the current circumstances, would say, “We’ll wait nine months” for a rebate.
Whale said rural wardens have lobbied the province for years to change the system back, but they “never get a response.”
Downey wondered, “Where does that lobbying show up?”
Whale was unsure, but said he would follow up with White.
Downey noted, “In ten years, it’s $6 million. It’s worth the effort on our behalf.”
Whale said, “Others have lost similar amounts – and more.”
Downey wondered, “Has someone at the province been shown a simple piece of paper like this [report]? There’s not a lot of numbers but it gets to the bottom line.”
Whale said he would ask White about lobbying on the issues.
Councillor Neil Driscoll said he should also ask for a response “on where they’re at.”
At the Feb. 23 county council meeting, Whale did raise the issue and White said it was on the agenda of the rural warden’s association when it met provincial officials at the Rural Ontario Municipal Association conference the following week.
