EDITOR’S NOTE: The following is an open letter from the McGregor Bay Association regarding a one rate taxation discussion held during a public meeting by the Northeast Town council seeking input on the ward tax system as seen in last week’s page one article ‘Northeast Town’s Ward One defends present tax ratio, decries single rate suggestion for town.’
To the Expositor:
The McGregor Bay Association (MBA) Board of Directors met on Saturday, August 17. The agenda included the current proposal brought to the municipal council of Northeast Manitoulin and the Islands (hereafter, council and NEMI) by the NEMI Taxpayers’ Association.
This proposal effectively calls for a drastic tax increase for the residents of Ward 1 and an accompanying reduction in the taxes paid by the residents of Wards 2, 3 and 4. When the municipality of NEMI was formed in 1998, McGregor Bay and the Bay of Islands agreed to join NEMI as Ward 1. The report to the NEMI municipal council by the municipal administrator at its August 7, 2013 Open Meeting said that, “The amalgamated municipality became the Town of Northeastern Manitoulin and the Islands, and was divided into four wards for voting purposes as well as tax distribution based on services available/provided to specific areas.” That tax distribution agreement has turned out to be economically disadvantageous for Ward 1; nevertheless we continue to live by our 1998 agreement.
Ward 1 has always paid more taxes into NEMI than it receives in services. In fact Ward 1 has been the clear cash cow of NEMI, protecting the whole community from many, although certainly not all, of the economic stresses faced by other small northern communities. For example, in the 2013 NEMI municipal budget, Ward 1 residents will pay $683,312 in taxes and receive only $11,500 in direct services—a surplus of about $671,812 dollars to be used elsewhere in NEMI in just one year. Note that this figure does not include the portion of the $1,506,100 generated by the population of Ward 1 and paid to NEMI under the Ontario Municipal Partnership Funding arrangement.
Ward 1 residents have provided this kind of tax subsidy to the other wards of NEMI every year since 1998 for a total of $5-$10 million. Over the next decade, with taxes increasing as they are, Ward 1 is scheduled to generate another $5-$10 million subsidy for the other wards, over and above the services it receives. Note that Ward 1 taxpayers are largely residents for only 2-4 weeks.
We also want to strongly applaud NEMI council’s integrity for scheduling this matter for discussion at both its August 7, 2013 open meeting and again at its 7 pm meeting this Thursday, August 22. It would be wrong to hold discussion and decision about Ward 1 taxes until after the majority of Ward 1 residents have left for the season.
The arguments presented for increasing taxes for Ward 1 residents, which would result in an increase of up to 41%, center on three areas:
At the August 7 open meeting of the NEMI council, the NEMI Taxpayers’ Association’s official presentation by its spokesperson, Ms. Irene Callaghan, focussed primarily on the interests of senior citizens in Wards 3 and 4 who are having difficulty paying increased taxes on their properties. We sympathize completely because everyone in this age of government downsizing and rising taxes is facing these problems everywhere, not just in Wards 3 and 4. For example, roughly half of Ward 1 residents are retirees.
If the NEMI Taxpayers’ Association really is concerned about the condition of those living on fixed incomes, is it logical for them to assume that the retirement accounts of people in another retiree-heavy ward of NEMI are a legitimate hunting ground?
2) “One-rate” tax system:
We are opposed to a one-rate tax system because Ward 1 residents would not receive equal value in municipal services. We estimate that each Ward 1 taxpayer pays at least an additional $1,500 for services the municipality provides to other wards, services that are not provided to Ward 1, including fire protection. A one-rate tax system would have to mean that Ward 1 would finally receive services of comparable dollar value to those received by the wards paying taxes at that same rate. For example, Ward 1 taxpayers should receive municipal fire protection, which would require two properly equipped and staffed fireboats, one each for McGregor Bay and the Bay of Islands. Ward 1 residents should also receive suitable municipal garbage service as do other residents in Wards 2,3 and 4 and a municipal marina as a service equivalent to the roads other wards enjoy.
3) Property taxes in Wards 3 and 4 are rising too much:
One factor driving tax increases in all the wards is appreciation in value of our homes. We understand that when Ward 1 home values go up, our taxes go up, so we pay them. Now, suppose for a moment that a member of the NEMI Taxpayers’ Association has a $200,000 home in Ward 3 or 4 that rises five percent in value. Their total worth would go up $10,000 and their taxes would go up accordingly. But the members of the NEMI Taxpayers’ Association do not want to pay those increased taxes themselves; they want to force the residents of Ward 1 to pay for them while having the benefit of the entire $10,000 in appreciation.
The report made by the municipal administrator to the NEMI council at its open meeting on August 7, 2013 included the assessed value of properties in the wards, with Wards 3 and 4 having the highest assessed value. The 2013 municipal budget also documents that Wards 3 and 4 are the largest beneficiaries of municipal services consuming 67 times more dollars in municipal services than Ward 1.
The McGregor Bay Association Board recognizes that Ward 1 would not be part of NEMI today if the current tax agreement had not been reached in 1998. We compliment NEMI on continuing to honour this agreement. If council decides to break this agreement because of the NEMI Taxpayers’ Association proposal, we will, of course, have to explore all options at both the local and provincial levels. We trust the NEMI council will maintain the status quo.Gerry C. Quinn, president McGregor Bay Association