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Tax Magic: One Man's Opinion

By Ben Meisner

Monday, February 12, 2007 03:45 AM

    
Let me see, how does this work? 

We pay the highest mill rate per $1,000 dollars in assessment  of the eight cities that the city surveyed but still have the lowest taxes?   It has to be magic, or at the very least that game where you put a pea under three shells and then move them around quickly and have someone guess which one hides the pea.

I’d like to nominate the City Of Prince George for, "The Magic award" for creative accounting.

If you own a home in PG that’s worth $133,609, you pay $2,495 in taxes, that is a fact.
If you own a home in Prince George that is worth, $316,034 you pay $5,899.72 dollars which just happens to be $2,829.72 cents more than you would pay in taxes in Kelowna for a home of the same value, and $3,814.12 more than you would pay for a home of the same value in North Vancouver. That is a fact.

If you want to do the comparison with Kamloops (which this city seems to like) if the assessed value of your home in Kamloops is $202,978, you pay $3,145 dollars, in PG for the same assessment, $3,789.59, or $644.59 dollars more. That is a fact.

How in the bloody world City Hall can keep spinning this one is beyond imagination.

How about someone over at the Hall buy a new home in PG say worth $230,000 dollars which is around the average price for a new home , the taxes are going to be $4,294.10 not  $2,495 as the City suggests is the average.

We pay higher taxes per $1,000 assessment than most cities in the central and northern part of the province. You always hear about Ft. St. John where it costs so much to live, well a house valued at $171,786 will pay $2,472.  By contrast in PG, $3,207.24 . 

Quit trying to play the shell game, it smacks of all the other so called "getting the value for our tax dollar" schemes.

We pay the highest taxes and let’s get on with admitting it and trying to do something about reigning in those costs.

I’m Meisner and that is one man's opinion.  


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Comments

Thank you, thank you, thank you, Ben.
I have been saying the same thing for years, but the gullible public just soak up the lies handed to them by city hall.
Too bad the radio news media does not take the time to quote your figures to the public. And the Citizen newspaper should headline it.
Just might make some of residents pull their heads out of the sand.
Is it possible City Hall could be forced to admit to the actual truth?
I doubt it. You have given it a good shot.
One does tire of listening to their lies, and they are so confident now they are willing to put the spin on information released by any one of their 18 departments.
Where is that new city manager?
He never comments on any issue-nor is he visible.
Very impressive-is he not?? Right--not!
Dead on target ben.....Great article!

Beers are on me , just simply call to collect ...you have my number......
Use your heads people. The only fair measure of taxes is dollars and cents for the average home. Policemen are paid the same in Kamloops and Prince George, so are firemen. Grass mowers, zambonis, gasoline, snow plows....you name it. It all costs the same and these costs are not a reflection of the value of your home. It costs money to give people services regardless of home price. What you pay, in money, for those services is the only valid measure of efficiency. Only an idiot would compare mill rates. The only "mill" that should concern us are the pulp mills whose taxes help keep ours low.
What I pay, in money, (what other way is there?), does not always equate to what I consider efficiency.
What a resident pays in taxes for a home of equal value in another city in comparison should possibly be the same as the policeman versus policeman, etc. Are they actually paid the same? or is the Prince George policeman allowed a bit of an extra allowance for the northern clime?
Leading question-why should a resident of Prince George pay higher property taxes along with higher maintenance costs than a property owner in a more moderate climate?
Why is the city of Prince George carrying such a heavy debt load, requiring much needed additional monies to cover interest?
If the city ran the operation as a business, there would be adequate funds for the potholes, as well as the Cameron street bridge, and the performing arts center.
We are all told to pay down our mortgages, and pay off our credit cards monthly to avoid interest charges.
This mayor and council shows no knowledge of fiscal responsibility, nor are they interested in what the residents have to say.
The mayor constantly attempts to justify his thrill of travelling by expounding at great lengths he does so to promote and bring business to the city.
I don't buy it-but we are forced to pay for his good times.He does set a very poor example.
This city is badly managed, and has suffered from this malady for many years.
Everyone seems to have forgotten there is a new city manager out there somewhere?
Must be the strong silent type?
Where is he, and why does he appear to have no imput-on anything?
Bingo Jacko.....!

I will try to explain it to people this way.

A 10 units condo unit is built with condos of varying sizes and values based on such things as location within the development, etc. It is decided by the condo association that they will contract with a landscape company to maintain the grounds. They get a quote of $23,000.

They look at dividing the cost evenly. So, each unit will pay $2,300 per year.

The units range in price from $100,000 to $280,000. The guy who owns the $100,000 units says that a more equitable system is based on the value of the unit. After much discussion, they decide to agree.

The ten units were recently appraised by an independent appraiser as follows:
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
$260,000
$280,000

The math gal in the group figures that if each puts in $12.10 per $1,000 of value or a mill rate of .0121053 they would each have to pay the following:

$100,000 $1,210.53
$120,000 $1,452.64
$140,000 $1,694.74
$160,000 $1,936.85
$180,000 $2,178.95
$200,000 $2,421.06
$220,000 $2,663.17
$240,000 $2,905.27
$260,000 $3,147.38
$280,000 $3,389.48

To look at it another way, the average unit value is $190,000 and pays $2,300 on average for the contract. Of course, in this case, there is no unit which actually has that average value.

The fellow that lives in one of the units has a brother who lives in the same designed project built by the same developer in Kelowna. He tells him what just happened. The Condo Association in Kelowna looks for a similar contract and manage to get someone to do their grounds for $23,000 as well. So, they apply the same mill rate to their units and discover they would raise $47,211 that way. They ask the math gal in PG what is wrong. She asks them how much their units are valued at. They send back the following list:

$300,000
$320,000
$340,000
$360,000
$380,000
$400,000
$420,000
$440,000
$460,000
$480,000

The math gal tells them they have to apply a different mill rate to raise the same $23,000. In their case it would be 0.0058975.

The Kelowna group tries it and gets the magic figure.

So, the average value in Kelowna is $390,000 with the average unit paying $2,300 for the contract. However, the mill rate in Kelowna is less than half of that in PG.

The Kelowna group scratches their heads wondering how come PG has such smart people.
Another way to look at it.

Let us say city A has to raise $60 million to pay for services provided by the city. They have 30,000 housing units.

They simply divide the costs evenly per unit. So, each property owner will pay $2,000 per unit.

The person who owns a million dollar house will pay $2,000. So will the person who owns a $150,000 house.

The person who owns a 6 unit walk up apartment will pay $12,000.

Equitable system? They all use policing services, they all use garbage, they all have cars, they all use water. Such services are more related to the actual use of the service. So, it can be argued on a user fee basis, it is more equitable.

However, on an "ability to pay" basis it is not.

There is the real philosophical discussion. Are we using a reasonable system to determine how much everyone should pay for the services a city provides?
Trusted .. your concerns are very valid and I have similar concerns.

Let us, however, not get those confused with the issue of how to raise taxes and how mill rates are set and why mill rates in communities with substantially higher assessed values for similar sized properties are considerably lower than in communities with much lower assessed values.
"Everyone seems to have forgotten there is a new city manager out there somewhere?
Must be the strong silent type?
Where is he, and why does he appear to have no imput-on anything?"

He does have input, as does his staff.

The Council, however, sets direction which includes making final budget decisions. The new manager has not been at his job long enough to provide much influence on this year's budget. You are still seeing recommendations based on past management practices and past Council directions.

The 2008 budget process will have a submission which will reflect the new manager's way of dealing with things. Whether that will bring a change in the way Council may be advised by Administration, we will see over the next year.

I know one thing is badly needed - a proper education/awareness campaign and easier access to information.

- the average person dioes not understand mill rates
- the average person cannot extract information from the city web site quickly and easily
- the average person cannot extract information from city hall, face to face, easily.
- the average person is jaded about attending any city-run information sessions.
Damn-I sure did turn out to be average!
Oh well, I never did consider myself anything other than that-so I am not too crushed.
Be nice if I could retire-might have the opportunity to become more knowledgeable.
On the other hand-I just might decide to be lazy, and not bother with all the strange goings on in the city of Prince George.
Guess I will have to cross that bridge when I come to it-if I ever do!
At least I am happy-does that count?
Happiness counts ..... :-) ... a lot!!!!

Remember, the US has it in their constitution ... the right to pursue happiness ..... the pursuit is a guranteed right... happiness is not.... ;-)

Oh, be careful when crossing a rotting wood bridge.... :-)
There are only two times anything has a value, the day you buy it and the day you sell it.

I resent the insinuation that somehow my new found wealth has the ability to put more money in my pocket to pay increased taxes. It hasn't.

My property only has a new higher value if I sell it today. Then I won't have to pay the higher taxes, the new owner does, that he has determined that the home is worth more. Chester