Tax Rate To be Finalized by Council
Monday, April 25, 2016 @ 6:00 AM
Prince George, B.C.- This evening, Council for the City of Prince George is expected to finalize the tax rate for 2016.
The tax levy has been increased by 3.21%.
Once the fees which the City collects on behalf of others have been added, the average residential home owner will be called upon to pay $9.10043 for every one thousand dollars of taxable value.
So, if your home has been assessed at $260 thousand, your tax bill, ( before any applicable grants) will be $2,366.11.
Here are the details on dollars per thousand to be paid by each property class:
Comments
I remember a post by Socredible last fall which referenced – the process of being ground to a financial poverty between the two millstones of ‘inflation’ and ‘taxation’.
Every year the municipal tax rate is increased by more than the official inflation rate! Obviously the assumption is that the incomes of people (including those on fixed incomes) are also adjusted by more than the rate of inflation – sadly, that is just wishful thinking! These people have to try to live within an ever shrinking budget because of inflation but governments are free to ignore this reality.
The inflation rate is based on the Consumer Price Index which in turn is based on the cost of a standardized “basket” of goods and services.
Real estate is not part of that CPI basket. For instance, we purchased our single family residential lot in the west bowl of the City in 1977 for a price of $12,000 at a City land auction. Using the Bank of Canada’s Inflation Calculator, which uses the consumer price index as its variable, the property should be valued at $46,200 in 2015. July 2015, market value of similar properties in our area of PG is the basis for the assessed value. The assessed value of the property without improvements (bare land) is $110,000. That is more than twice the CPI projection.
Why do I bring that up? Because the cost of the serviced land in PG is based primarily on the cost to develop it, not the scarcity or the special location of the property, such as riverfront, view lots, etc. The price of land in cities such as Vancouver has gone up closer to 100 fold rather than 10 fold over that same time period primarily due to scarcity. The cost of land development is a much closer approximation of the cost of building and maintaining the hard infrastructure of the city. Based on this, the increase is twice the inflation rate increase. This can be borne out in that the cost of operating cities in general has increased much more than the rate of inflation. We are not the only ones.
It is totally out of whack to use the rate of inflation instead of labour cost indexes, construction cost indexes and indexes for increased quantity and quality of services demanded by today’s city dwellers.
Until we learn to build more densely using the existing road networks and service lines sized for denser development, we will continue to see increased taxes which are higher than the rate of inflation.
We still have some catch-up to do to do proper maintenance at an early enough stage to not cause higher unit expenses to service repairs. That catch-up, which can be seen by the increased funds set aside for future repairs will continue to hit us for several more years. The City should be able to estimate such projections and share them with all of us.
In my opinion, we need a comparison of tax increases over the decades in PG versus other cities of population between 50,000 and 150,000, for instance.
That is the kind of work the Municipal Auditor General should have been doing but has not been able to accomplish yet. It is not an easy task. Such work has typically had a mixed review of its value because it is a complex exercise to make such comparisons.
Most certainly there will be no discussion on the direct the tax levy will go. Tax increases each year are like compound interest.
No doubt the snow budget will be over again this year even with spring a month early and little snow fall through the winter.
Welcome to BC. Maybe it no longer means British Columbia but “Bring Cash”.
The story above states:
“So, if your home has been assessed at $260 thousand, your tax bill, ( before any applicable grants) will be $2,366.11.
Let’s not forget that on top of the tax bill of $2,366.11, there is the Utilities bill of $566.26 twice a year for a total of $1,132.52 on top of the property tax bill.
That brings the grand total to $3,498.63 per year!
OUCH!
Ok, so we drop the Canada Games levy
Average house in 2011 was 233,000 – now is 260,000.
Just the city portion of taxes in 2011 = 1,777.88 (7.6304)
Just the city portion of taxes in 2016 = 2,094.38 (8.05532)
316.50 more you pay in 5 short years or 17.8 percent more for the exact same thing. Add on what you pay more for regional district and utilities like water and garbage and yowza. Time to depreciate the house, maybe punch some holes in the wall or let the dogs pee on the hardwood to bring down the assessed value…
At a steady 3 % increase from 2011:
2011 1.777.88
2012 1,832.24
2013 1,887.21
2014 1,943.83
2015 2,002.14
2016 2,062.21
So we in PG have been paying more than 3 percent increase per year even when you factor in the removal of the Canada Winter Games levy which was a 4.2 percent hit in 2011. Back in 2011 Dave Wilbur was quoted saying “It seems to me that the residential class has seen an increase every year since 2007” and still they go up even with the core review we were promised would fix everything
Maybe get to the bottom of why the city cannot operate without constant increases. And even with these increases they have to go to an AAP to borrow funds
The period from 2011 to 2016 inclusive is actually a 6-year period. Each of the six tax payments and six assessments is for a period of one year.
If taxes had not increased and stayed at $1,777.88 per year, the total municipal tax payment for the 6 payments would have been $10,667.28.
Using your table for taxes payable in each of the six years based on a 3% approximate tax increase, the total payment would have been $11,505.51. That is a difference of $838.23 total. The percentage increase in total tax payment over the 6 years is therefore 7.86%.
Now, let us consider the real estate investment in the house. Over that time the increase in value was $27,000. That is an 11.59% increase over the 2011 assessed value of $233,000. That is a higher increase than the increase in taxes paid to the City.
In my opinion, a total increased property tax payment of $838.23 over the 6 periods is a very wise investment resulting in a $27,000 additional asset in your investment portfolio.
Finally, remember that the value of a house depends on many factors. Two of them are how well the owner maintains the house and how well the City maintains its hard and soft infrastructure and its services to the various interest groups in the city.
I would refrain from having the dog pee on the wood floor since the assessor does not enter the house, but looks at it from the outside only. :-)
I wonder why the snow control reserve mill rates for residential is 0.58657 mills compared to the farm rate of 0.39859
Seems to me that the larger the property the greater the perimeter roads are to serve and bypass the property to get to the adjacent property.
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