Not just math

Posted: February 8, 2018 at 9:07 am   /   by   /   comments (5)

I don’t have any options,” explained Mary. “I’m on a fixed income. Where am I going to go?”

Mary (not her real name) had just received a notice of a massive MPAC (Municipal Property Assessment Corporation) increase. It lay on the table in centre of the large room bounded on two sides by windows. Nearby, a computer sat unused. The Internet service had become too expensive.

Mary and her husband had built their Glenora home after the war, with assistance from the Veterans’ Land Act. Their modest home afforded an magnificent view of the bay, the ferry scurrying back and forth, fishermen in the early morning and occasionally a visit by the Stephen B. Roman hauling cement to Cleveland.

When the Times spoke with Mary in 2006, her husband had passed away some years earlier. Mary was living alone, continually adjusting to an ever-shrinking life. The lower half or her home was off limits much of the year—she couldn’t afford to heat it. The 72-year-old chopped wood to feed the stove in the corner of the single room to which her life was now restricted.

A year earlier, council had raised her taxes by more than 12 per cent. On the table, the MPAC notice said the value of her home was worth 56 per cent more that it was the year before. That meant a $500 increase to her municipal tax bill. Money she didn’t have.

“The figures I worked out last night, show no food, no clothes, no guests and no entertainment,” she told the Times in 2006. “That’s when I stopped and went to bed.”

Mary wasn’t alone. Over the following couple of years, the Times, told numerous stories like hers. There was Nora, an 89-year-old who had been lashed with a 50 per cent increase to her municipal taxes. Then there was Gloria, who had lived in a secluded cottage overlooking Smith’s Bay for four decades. By the time we met her, she had let her car go, relying on neighbours for trips to the grocery store and doctor’s appointments. It was hard, but manageable. Then in 2006 MPAC decided the assessed value of her property had doubled. Her municipal tax bill shot up 70 per cent. It was no longer manageable.

Each of these folks lived on meagre, fixed incomes. They also lived on waterfront. In the middle of the last decade, the value of this type of property ballooned.

There were many other such stories around Prince Edward County then. There were several appeals to council. Dennis Kastner and Peter Proctor made it their mission to advocate and defend these folks before council and MPAC hearings.

They had some success with MPAC. Not so much with council. Shire Hall updated a tax deferral program it had on its books, but seniors worried it would gobble up their equity. Many were forced to sell homes in which they had lived most of their lives.

Today some farmland owners face a similar challenge. The value of their property is rising sharply, just as waterfront did a decade ago. So too is their property tax bill. John Thompson leads a group of farmers who want council to shift part of their tax increase onto residential taxpayers.

He has made his argument several times over the past few months, each time bringing a dozen or so farmland owners with him to Shire Hall, to look council members in the eyes. It’s effective.

Shire Hall staff have cautioned council repeatedly that tinkering with municipal tax codes is a bad idea. That shifting the tax burden between property classes in response to rising values of one class of property defeats the purpose and intent of the current market value assessment system in the province. And that trying to match the ebbs and flows in property valuations for the benefit of one class of resident over another is a mug’s game. They have explained to council that only a handful of—mostly urban—municipalities have ventured down this path, and they have made it clear they don’t think this council should either.

Some councillors, however, skip past these basic problems, eager to be seen as easing the burden on farmland owners—by passing part of their property tax increase onto residential homeowners. This is how some councillors aim to help farmers. By getting you to pay farmland owners taxes.

John Thompson has been a brilliant and effective advocate for the Federation of Agriculture. He says rising farmland values are driving up his tax bill and that of other farmland owners. He argues that council could ease this hardship by spreading the burden across residential home owners.

He’s persuaded a lot of folks.

“It’s just math,” insisted the chair of the Chamber of Commerce, Gil Leclerc, to council a couple of weeks ago, adding that his MBA removed any doubt about his math credentials.

But of course, it isn’t just math. There are other factors, far more important. Things like fairness, equity, predictability and reason. If it were just math—extending this logic a bit—perhaps residential taxpayers could pay the entire farmland tax tab? After all, farmland owners pay just $1 million of the County’s $35 million tax levy now. Just math says that for $80 extra for each homeowner, Council could eliminate farmland taxes altogether. Does that sound fair or reasonable?

Fairness dictates a remedy tailored to those who need it—regardless what property class they belong. If the Chamber and the Fed of Ag are serious about finding a fair solution, perhaps they could work toward devising a relief plan that targeted those in need, rather benefit every farmland owner, whether they need it or not.

That’s all Mary, Nora and Gloria wanted a decade ago. It is too bad neither the Chamber of Commerce nor the Federation of Agriculture were in their corner then.

Comments (5)

write a comment

Name E-mail Website

  • February 12, 2018 at 4:25 pm Gil Leclerc

    Don’t surcharge the Farmers. Farmers pay residential tax on their homes and already pay more than the share of taxes through business endeavors. This ratio shift is about taxing their land. Above and beyond. It is a surcharge on the one business class that is the fundamental reason most of us are here. We want this to remain farming in the county to remain constant. So we should not surcharge them with a substantial tax increase that a farmer will get no further benefit. Furthermore, typically farm land is not sold but passed on through the family. There is no comparison of a farm to a waterfront property out side of the tax change. The waterfront owner can and will sell their property. Farmers will typically only sell if they are forced to.

    Which typically is not going to be sold and p putting the farms in the same consideration as a residential home is a fallacy. They already pay their fair share and more of the tax bill with their By creating surcharges on farms to falsely create balance to the budget is not considering the facts. The farms must stay. The people will move but the farmers don’t.

  • February 9, 2018 at 3:05 pm Sarah

    By reducing the tax to 20% from 25, the County will still see a 68% increase in tax revenue from landowners. Leave it at 25, and landowners are paying a 110% increase. A farmer’s residence has had the same assessment & tax increases that every other residential owner have had.

  • February 9, 2018 at 2:00 pm Bob

    reduce farm tax means more tax for Mary and Nora and others like them. where’s the equity and fairness in that scenario.

  • February 8, 2018 at 9:30 am Sarah

    The difference is that you can sell a residential home for something more affordable much easier than finding another area to farm.

    • February 8, 2018 at 7:46 pm Chuck

      12%, 50%, 70% (which doesn’t make sense based on residential mil rate). None of these numbers are even close to the 112% and 150% that farmers are facing.