Friday, December 28, 2007

Province’s port tax policies leave cities short of cash

With the provincial government proposing to extend the Ports Property Tax Act by another ten years, some politicians are concerned that municipalities may end up on the short end of the financial straw when it comes to revenues gained from taxation.

North Coast MLA Gary Coons fears that the current policy as it exists may in the long run be detrimental to cash strapped local municipalities (hmm anyone have any ideas about who that may be?) who require revenue streams, but will be trapped in a financial plan stuck in 2003.

His concerns and an explanation of the port tax policy was found in Monday’s Daily News.

By Leanne Ritchie
The Daily News
Monday, December 24, 2007
Pages one and three

North Coast MLA Gary Coons is concerned that North Coast municipalities might lose in the long term under the provincial government’s proposed tax cap for ports.

“While I believe it is important to support the development and expansion of ports, it should not be done at the expense of cash-strapped municipal governments,” said Coons.

The province is proposing to extend the Ports Property Tax Act by 10 years, which was initially brought in in 2003, caps the amount municipalities can tax port properties and then provide compensation from the provincial government based on 2003 property assessments.

For the past three years, Prince Rupert has been receiving the biggest top-up from the province of all eligible municipalities, $1.38 million.

But Coons said the province is planning to extend the act for 10 years, but continue basing the compensation on 2003 assessments. While there will be some adjustment for inflation, he said the formula fails to adequately address the funds that municipalities would have received based on assessment increases.

“Municipal governments around the province are becoming increasingly concerned about the 10-year extension to property tax caps on ports throughout the province,” said Coons.

“The Ports Competitiveness Initiative is an egregious example of the provincial government downloading costs on to municipalities, unlike the provincial government with its multi billion surplus, can ill afford.”

He said the municipalities already must manage hazardous materials and provide policing for ports.

“These costs were downloaded onto communities by the federal government, and now the provincial government is denying them the ability to leverage the revenue they need to meet these obligations,” he said.

“Yet they have fewer revenue streams than senior levels of government, really their only tool is property taxation, said Coons. “The compensation being offered is insufficient. And since it is not indexed to property value, every year it becomes even less adequate.

“It doesn’t cover even half of the potential revenue losses most municipalities are absorbing currently.”

Delta recently sent a letter to the province outlining what it estimates it will lose. ”That city will get $300,000 from B. C. but lose $600,000 based on property assessment values.
“Municipalities such as Delta will now need to make up for this loss in other ways, which could lead to an increase in financial pressure on individuals and small local businesses in the community,” said North Delta MLA Guy Gentner.

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