Trent Ernst, Editor
At the most recent budgeting meeting, Councillor Will Howe suggested something. It was a big idea. An audacious idea. An idea that on the surface, was a brilliant idea.
He proposed cutting residential property taxes to zero.
Instead of collecting an average of five hundred dollars and change from each and every property owner in Tumbler Ridge, he wanted to collect zilch. Zero. Nada. Nothing.
“We collect 1.1 million from the residents in taxes,” he wrote on his Facebook page, after the motion was defeated by the rest of Council, “but had a nearly 5 million dollar surplus last year. Not to mention $450k in investment gains that more than tripled our investment returns over any previous year.
“In rough times like this, I’d rather see the money in your jeans, than the districts bank accounts. You should decide how to spend your money not us.”
To paraphrase Keanu Reaves: Woah.
On the surface it sounds good. Better than good. It sounds awesome.
But when you dig below the surface, there are some issues.
There are the obvious issues. For one, the Canadian Federation of Independent Businesses advocates that property taxes for businesses should not be more than twice what residents pay in a municipality.
If residential tax dropped to zero, businesses would be well within their rights to complain about unfair treatment. It’s not just the residents who are suffering in this economic climate, and to give a 100 percent tax break to residents and nothing to businesses would be seen, quite rightly, as discriminatory.
Then, of course, there is the issue of next year. Or the year after that, or the year after that. At some point in time, the residents aren’t going to be in the same financial straights. So the District is going to have to start charging taxes again. Can you imagine the outcry when they try and set the taxes back to where they are now, which is about $598 based on the average assessed value of $91,404.
How would you feel if the District were to raise taxes from $500 right now to $5000? And that’s only a ten times jump. We’re talking a 500 time increase in taxes. That’s pretty steep, when people cry bloody murder if it goes up by more that a few percent. But legally, it’s a non-starter. To set your taxes to zero would actually be a violation of the Community Charter, which sets the base minimum a municipality can set its taxes to is $1.
So, let’s do that. Let’s set it to $1, and we’re back to our previous problem. Do you want to be the one to tell businesses that they are paying taxes at a ratio of more than five million to one? Or industry, at eight million to one?
It would also disqualify the District from any grants, the amount of money can range anywhere from a few hundred thousand to over a million per year. If the town is so flush with cash, there’s no need for grants.
More problematic is it cuts you and I out of the equation. We would no longer have any skin in the game. Residents could no longer go before Council and demand “What are you doing with my taxes?” The answer: you didn’t pay taxes. You have no power over me.
Yes, I know the motivation behind the suggestion was trying to be helpful. But it’s easy to take what was imagined as being for good and turn it to evil. Just look at Anakin’s slide to the dark side in the Star Wars prequels.
Not only would it give Council a rather large stick that they can wield however they please, it detaches us from the community.
For good or ill, we are more connected to things we have a financial stake in. If you are not paying taxes, not only will the District not have to listen to you, chances are you’ll care even less what the District does with their money. Because it will be their money. Not your money.
Tumbler Ridge will stop being our community. And that’s a far bigger loss than any hit to the wallet.