Posted on 04/13/2006 1:27:54 AM PDT by goldstategop
The sleeper issue in next year's provincial election campaign could be property taxes. Across the province, some people are being hit hard by sharply higher property taxes, thanks to the vicissitudes of the assessment system.
In the coming weeks, these folks plan to come together as a coalition to campaign against the system, known as "current value assessment."
Bob Topp, executive director of Waterfront Ratepayers After Fair Taxation, one of the founding groups in the new coalition, says that if the government does not respond adequately to their concerns, "We could be active in the election."
And tomorrow the Legislature will debate a private member's bill, introduced by Conservative MPP Tim Hudak, that would slap a 5 per cent cap on annual assessment increases, which now can exceed 100 per cent in the case of some waterfront properties.
"The feedback that we've received has been overwhelmingly supportive," says Hudak.
Indeed, Hudak's bill is expected to draw support from members of all parties in the Legislature tomorrow and will likely pass second reading.
But after that, it is even more likely to die on the legislative order paper as the governing Liberals are loath to open up the assessment can of worms.
"Capping assessments can be complex and may limit transparency and create inequities," says Finance Minister Dwight Duncan.
That's what the Conservatives used to think when they were in power a decade ago and introduced current value assessment. Now, with Hudak's bill, they seem to be having second thoughts about their own creation.
It should be noted that Hudak's bill is not yet official party policy, but given that he is the party's finance critic, it seems likely a version of it will appear in the Conservative platform next year.
"The notion of wild assessment increases, like we're seeing in the hot property market today, was not part of the mindset 10 years ago," explains Hudak.
He adds that the assessment system needs "some degree of predictability and stability," which a cap would provide.
As for the New Democrats, they will be supporting Hudak's bill but only as "a very short-term solution," says NDP finance critic Mike Prue. "The longer-term solution requires much more thought."
The problem is that assessment is a zero-sum game. When one property value goes up, another comes down, at least compared to the average.
If the province starts to interfere with the system by imposing caps, the burden will shift either to the municipalities, which would raise less money, or to the ratepayers with below-average assessment increases, who would pay more in taxes to offset the savings for those above average.
There are always exceptions to the rule. But the below-average crowd tends to be less well-off than those above average: the town folk in cottage country as opposed to waterfront property owners, for example; or bungalow inhabitants in Scarborough as opposed to mansion owners in Forest Hill.
A more progressive approach would be to lighten the overall burden on property taxpayers by uploading to the province some of the social services that are now paid for, in whole or in part, by property taxes — such as education, welfare, social housing, day care, public health and ambulance service.
If the province took over full responsibility for these social expenditures, property taxes could be cut by more than half and the impact of current value assessment on homeowners would be far less in absolute terms.
Of course, the province would then have to raise income or sales taxes significantly to pay for the swap. That's something the Liberals are not inclined to do, and the Conservatives are certainly not going to recommend it.
Instead, we will likely have a debate about property taxes in next year's election.
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
If they manage to get it passed, they will have to remain ever vigilant to keep it. Florida has a "Save Our Homes" maximum of a 3% increase/annum in assessed values for homeowners. It is embodied in the state constitution BUT, the current legislature is seeking to repeal that protection at the behest of (who else) the real estate and developer lobbys!
The B.S. rhetoric (as reported in the Orlando Sentinel) is sickening. It has included such "justifications" as... "People are trapped in their increasingly more valuable homes and cannot afford to sell them and move because their taxes would go up..." Examples of million dollar homes being taxed at values of $200,000 are offered as justification that people are "trapped". No where is it mentioned that the "Save Our Homes" amendment to the state constitution was passed so that long-term homeowners would not be driven from their homes due to wildly increased property values in their neighborhoods!
Now that every TV channel has "Get Rich Quick In Real Estate" seminars advertised and "flippers" are buying 3 or more houses/condos because they just want to get rich, prices (for a while) have escalated astronomically. Were it not for the Save Our Homes provisions, many elderly residents would just be forced to sell out due to higher taxes.
Personally, I'm old enough to have seen several real estate cycles in Florida where, for years, you just couldn't GIVE AWAY a home and massive foreclosures took place. Sure, the values come back over time but if you are the one forced to sell or enter foreclosure that is small comfort.
FYI, when a home is sold, the new owner pays taxes on a full assessment value, not the old "protected value" enjoyed by the prior owner...
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")
You are correct, but not to siblings.
Another good reason, not to add your brother or sister to title.
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