Editorial - Zero tax increases would have a cost

When Yorkton voters head to the polls Monday (Nov. 9), municipal taxes are likely to be an issue many will have seen as important in terms of their decision of who to vote for.

At least the 15 candidates for the six councillor positions and the two running for mayor have spent some effort in focusing on taxes in the run up to the vote.

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There are a number of candidates calling for zero per cent increase in municipal taxes in 2021, citing COVID-19 as a key motivating factor in that position.

Others have gone as far as to suggest zero increase for the next four years, a position taken by mayoral candidate Mitch Hippsley on the day he formally announced he was running.

Others among the candidates are taking a more cautious approach to a tax break moving forward.

So, what exactly would zero tax increases mean?

Well, to start with just because the municipality opts for zero per cent does not mean taxpayers won’t pay more in 2021, or beyond.

When tax notices go out the amount owing includes the school side of property tax and the City has no control over that, being strictly the tax collector on that side of the ledger. If school taxes rise, so too will people’s tax bills.

Another question that needs to be asked is whether COVID-19 is the great bugaboo some suggest?

In terms of City taxes the impact seems negligible so far, with City Manager Lonnie Kaal telling Yorkton This Week at the end of September tax collections were on track with what they have been in previous years.

That should not surprise many, the candidates included as often property taxes are paid as part of mortgages, and are generally budgeted for by most.

In terms of businesses obviously COVID has hurt some, a lot, while the opposite is also true, with some businesses doing quite nicely, depending on products and services offered. That is pretty much the norm when facing disasters.

It was the same in the wake of the two great city floods of recent memory.

It would be the same if farmers were not able to harvest a crop.

Whether crop failure, flood, or pandemic, the municipality cannot cure the ills of all.

And zero per cent municipal tax increase might appear an oasis of help, but a closer look turns it into something of a mirage.

Tax increases have been 2.9 per cent in 2019 and 2.9 per cent in 2020, with the City currently targeting a three per cent hike in 2021, pending new direction for the new Council of course.

A three per cent increase would be $61.20 per year or $5.10 per month on a $250,000 home, which is hardly the sort of saving that buffers any homeowner from the impact of COVID.

But, for the City those dollars add up, and are required to keep pace in terms of service and capital works. Without a tax increase the City must either do less, cut services, or draw down reserves, because their costs will rise, through general inflation, (about two per cent a year in Canada), and increases in costs that automatically include firefighter and CUPE contracts, and the potential of energy, power and insurance hikes.

Drawing on reserves is an option, but frankly the City has been lax in socking away money even when they know a big project is on the horizon. There IS almost no money dedicated in reserves for a Kinsmen Arena replacement, or a new hospital, but both are projects Council has known about for years.

Council could chop services of course. The City could cut grass less often, could remove snow less often, reduce the compliment of RCMP officers, firefighters, or clear sidewalks less often, but does that really make our city better for the sake of a zero per cent tax hike?

And of course in the end, taxes have to go up, unless we as a community are satisfied with more potholes, more trip hazards on sidewalks, and fewer services as above. The increases can be two or three cent a year to limit the impact and allow taxpayers to adapt their budgets, or it can be much bigger hikes coming after brief periods of no increases.

The vote on Nov. 9 may very well come down to which way taxpayers want to see it unfold locally.

© Copyright Yorkton This Week

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