Sunday, April 14, 2013

Why This Flat Tax Is Appropriate (in my opinion)

Flat taxes are not fair. For someone living in a home with a lower assessed value, the proposed $189 flat tax will be a higher proportional tax increase than for someone in a home with a higher assessed value.  If your current tax bill is $1000, it represents an almost 20% increase.  If your current tax bill is $4000, it represents only 5%.

I represent an area where the assessments tend to be lower, with a fairly high percentage of seniors on fixed incomes, and I have consistently opposed the imposition of flat taxes because of their inherent unfairness.  Currently there are two - a $27 tax that is directed to the reconstruction of Pineview Terrace, and a $60 flat tax that was imposed a few years ago, which was supposed to be set aside for special infrastructure projects, but in its first year was used to balance the budget.

So why do I support this new proposed flat tax?  Mainly, it's because our situation with road maintenance and repair has reached crisis proportions, after six years of underfunding, starting when $2 million was taken directly out of the roads budget and directed towards the Neat and Clean project.  Neat and Clean money, as I'm sure you'll recall, was invested in such things as new furniture for the mayor's office and council chambers, new carpeting in City Hall, and painting lamp posts on Central Avenue as high as the painters could reach.  We now have to deal with the results of this neglect and mis-spending, compounded over six years, and made worse because those  problems that weren't addressed over these six years are now more expensive to remedy.

The new flat tax will be put into a dedicated fund, solely directed to road maintenance and repair.  All proposed roadwork expenditures have been removed from the general budget, and will be covered from this fund.  We expect to collect $4 million this year; any money not spent this year will be retained for next year.  If it turns out that it's more than can be spent in a single year, the amount can be adjusted each year to ensure that the amount collected matches what can reasonably be expected to be spent in that year.

The other reason that I support this tax is because roads are used by all Prince Albert citizens - we will all benefit.  We do need to identify the roads that will be covered under this years budget, and ensure that true need sets priority, to deal with the worst roads first.  This work also needs to be coordinated with utility work - nobody wants to see a road resurfaced one year, then taken apart the next year for water main replacement.

The Pineview Terrace tax is scheduled to expire in a couple of years, as is the assessment for the soccer centre, although that is based on mill rate, not a flat tax.  When those are finished, council will have a few more options - either redirecting those funds, or eliminating them from the tax bill, which might provide a bit of tax relief.

I do think that the current flat tax of $60 should be removed, and put on to the mill rate.  This tax, as I mentioned earlier, wasn't directed toward a specific purpose, and I think that the only way to justify a flat tax is to be able to point at the specific reason for it.  I will be making such a motion at Monday's council meeting.

I'm not happy about the flat tax, but I'm supporting it because I think it is the only way to get out of the mess that previous councils have gotten us into.  I hope that we remember this lesson, and don't saddle future councils with such problems.

"Desperate times call for desperate measures." - Proverb

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