Wednesday, November 02, 2011

TAXES HAVE TO BE FAIR FOR ALL
(Editorial published int he Daily Gleaner, Oct 28, 2011)

If you own a home in Fredericton, you're either an insider or an outsider.

Insiders pay this property tax rate - $1.42 per $100 of assessed value.

Outsiders get a tax break - $1.07 per $100.

This inside-outside distinction is a throw-back to 38 years ago when the City of Fredericton grew through amalgamation to include Marysville and other communities.

Some properties that ended up within the city limits did not enjoy city amenities like water and sewer service, thus they paid the cheaper "outside" property tax rate.

But that was in the day when there was no separate water and sewer bill. The lack of this service made the lower tax rate fair for those who still had to maintain their own wells and septic tanks.

Now that we have a water and sewer bill separate from a property tax bill, there is no need for a lower outside tax rate.

That's the opinion of two city councillors -Stephen Kelly and Mike O'Brien.

As council spends the fall debating finances in preparation for the 2012 budget, these two have their eyes on close to $660,000 in lost taxes - what the 880 homeowners would generate in tax dollars if the outside rate were abolished.

"I think the level of services is pretty much equal across the city," said Coun. O'Brien. "I don't see a reason why we need to retain the outside rate."

But some councillors argue that property owners in the outside zone lack sidewalks and adequate bus service, which should be made up for with the lower tax rate.

We don't agree. Lots of communities don't have sidewalks on every street. Not every street is on a bus route.

But in this city, everyone does get the essentials - garbage pick-up, police and fire protection and recreation facilities.

We are in the unfortunate and seemingly unending era of shrinking municipal revenues. Finding dollars, and doing more with those dollars, is absolutely vital to proper stewardship of a municipality.

That's why we believe councillors O'Brien and Kelly deserve praise for finding more than half a million dollars in potential revenue.

We don't believe that revenue gain should come in one fell swoop. Seeing your tax bill climb so dramatically in one year is more than many could handle.

So we're suggesting a three or four year period of gradual increases until the tax rate for outsiders matches the insider rate. The pain is easier to bear over several years.

In the meantime, we think the city should do more to include these outside zones in its plans for upgrades. Are these growing neighbourhoods that will need sidewalks, for example? Is there a chance of installing water and sewer services in these areas?

This isn't exactly good news for the 880 homeowners who have been enjoying a lower tax rate and probably a more quiet, country-like existence on the city's fringes.

They have been getting at hefty tax break because the system has simply never been updated to reflect reality. But fairness is key here, and left unchanged, the tax rate is not fair.

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