Misdirection

MPAC statements have begun to arrive in County mailboxes. Overall, these seemingly arbitrary measures of home and property values appear to be rousing somewhat less anxiety among ratepayers this time around. MPAC remains a broken and flawed system, particularly for rural communities such as Prince Edward County; nevertheless, the arrival of the assessment notice appears to have lost its ability to churn widespread agitation. This is either because the assessments seem reasonable (not likely) or we’ve collectively adjusted to the unfairness of a provincial system rural Ontario property owners feel powerless to change. (Although, given the troubles larger cities and their mayors have found themselves in recently, with a variety of crimes and misdemeanors—a flawed assessment system may seem a minor irritation by comparison.)

Every four years MPAC, that is the Municipal Property Assessment Corporation, makes a determination of the value of your home, property or buildings. According to MPAC the value of all the assessed property in Prince Edward County rose 1.44 per cent since the last assessment in 2008.

It is a largely meaningless number. Property values likely rose more than that in the last four years but neither MPAC, nor its masters—in this case the tax collectors at Shire Hall—really care about whether the number is right or wrong. This is because MPAC’s only role is to determine how the property tax burden is divided up among County residents—not the size of the pie that is being sliced. MPAC seeks to be fair and reasonable; the accuracy of the valuation is not a high priority.

One of the common misconceptions about the MPAC statement is that an increase in the assessment of a property means a higher tax bill. Similarly, it is assumed, a decrease in assessment means a lower tax bill. Neither is necessarily the case.

This is because on or about the end of next February, Shire Hall will announce that it has finalized its 2013 budget. Then they will tell us we need to pay them about $27 million, give or take a million dollars or so. MPAC assessments will then be applied by Shire Hall to determine how much of this $27 million each property owner shall pay. If, for example, the tax levy required by the municipality remained unchanged next year—those with lower assessments will indeed pay less tax, those with higher assessments will pay more. If the tax levy rises substantially, however, everyone will pay more—only some more than others. Generally speaking, MPAC assessments simply slosh around the tax burden among property owners in this municipality.

This is why ratepayers’ attention must be trained upon budget making at Shire Hall—this is where the real impact, or damage, is done.

Where MPAC begins to get unfair is when both taxes and assessments rise sharply simultaneously. This compounds the impact of both. In this scenario, a wild swing in the tax burden can swamp an unsuspecting homeowner with a massive property tax bill.

Where MPAC really gets it wrong is in its operating assumption that understanding my home, its features and location, informs it about the value of my neighbour’s home. In Mississauga, or Nepean or Don Mills, it is certainly true that the value of one home on a street provides a useful guide to the value of the other homes on the street. But it is clearly not true in rural Ontario. A thorough and exhaustive calculation of the variables that drive the value of my property says very little about my neighbour’s home. Or the house next to it. Or across the street. The differences are too great. Sales are too infrequent. Comparing them is virtually meaningless. Yet this is the methodology upon which the MPAC assessment apparatus precariously relies.

There are a couple of ways to appeal your assessment. In this way MPAC has surely improved. Going online to MPAC’s site you can find your property and see the properties they used to determine the assessed valuation. If you think they are wrong,you can search other properties that you believe may be better comparators. In any event you can simply request a reconsideration of the assessed value— noting the errors in their valuation and suggesting more comparable properties.

In the last cycle, many of those who made this request were granted modest relief simply by asking for it. I suspect this may be MPAC’s way of acknowledging the frailty of its assessment methods, but of course this is just my speculation.

If you are still not satisfied, you can make an official appeal to the Assessment Review Board, an independent tribunal.

The bottom line is that unless you have very special situation—and remedies are available for those cases—MPAC can be a bit of a red herring. The only real method of keeping a lid on tax bills is by monitoring the way Shire Hall spends your money. We haven’t done a good job of that. The tax levy in the County has risen more than two and half times since amalgamation. A $1,000 property tax bill in 1998 is now $2,700. Next year it will likely be more. This has a direct effect on County families and seniors.

This rate of increase is not sustainable. MPAC can only amplify the burden for some, lessen it for others. The only real and lasting solutions are to be found at Shire Hall.

rick@wellingtontimes.ca