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Critics slam Katz's ongoing tax freeze

Mayor planning one more year without a hike

By: Bartley Kives

25/01/2010 1:00 AM | Comments: 31

Mayor Sam Katz plans to freeze property taxes in Winnipeg for the 13th straight year, but critics on council are once again questioning the financial wisdom behind the move.

City council has not increased the pool of taxes collected from existing Winnipeg properties since 1997, when the city had one of the highest municipal property tax burdens in Canada.

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Although Winnipeg is now at the low end of the scale -- and may be able to stay there in perpetuity even with modest annual increases -- Katz said the move would do little to help the city pay for billions in upgrades required to roads, bridges, sewage-treatment plants and other amenities.

"If you raise property taxes by one per cent, it brings in approximately $4 million. Most people think an increase would bring in tens of millions of dollars," the mayor said in an interview late last week.

Since 2006, Katz has come around to the view that cities deserve a larger chunk of the taxes collected by the federal and provincial governments. And since Winnipeg's economy makes up such a large proportion of Manitoba's economy, this city deserves an especially large share.

"One (point) of the PST is approximately $118 million. The bottom line is, property taxes are regressive. We need to look at the whole situation," Katz said. "We get eight per cent of the taxes. And then on every major project, we're expected to make a contribution of one-third of the cost. Something's got to give there."

At Tuesday's state of the city speech, Katz is expected to reiterate his intention to freeze property taxes when he and city council finance chairman Scott Fielding table a draft version of the city's 2010 operating budget in February. Fielding has argued Winnipeg property owners can't afford any increase.

According to city statistics, a one per cent property tax increase in 2010 would cost the average residential household an additional $14.63 and generate an additional $4.27 million in revenue for the city.

Couns. Dan Vandal (St. Boniface) and Russ Wyatt (Transcona) are among politicians who argue the city would be acting irresponsibly if it does not levy at least a modest increase this year.

Vandal advocates a two per cent increase, which would cost the average household an additional $29.26 and generate $8.54 million in additional revenue.

"That's not $8 million this year. That's $8 million every year," Vandal said. "There's no reason you can't use that and continue to lobby for a better deal for the city with other levels of government."

In recent years, the city's tax freeze has served as an irritant in its relations with the provincial government. The Gary Doer government viewed the freeze as a reluctance to make hard decisions, and former finance minister Greg Selinger is now premier.

As well, Wyatt contends the failure to make inflationary tax increases over the past 12 years has seen the city forgo $190 million in revenue.

"Thirteen years of freezing taxes sounds impressive, but our infrastructure deficit has skyrocketed. This is not sustainable," Wyatt said.

"This is an election year, so the public is being told taxes will be frozen again. But do they really believe they will be frozen in 2011? Why not be up front about the city and the challenges we face?"

 

bartley.kives@freepress.mb.ca

Tell the city

what you think

 

The city has invited the public to share their thoughts about the 2010 operating budget at a pair of round-table sessions at the Winnipeg Convention Centre this week: Wednesday from 6 to 8 p.m. and Thursday from 7 to 9 p.m.

You may pre-register at budget@winnipeg.ca or by calling 986-4242. Walk-ins are also welcome, the city says.

Republished from the Winnipeg Free Press print edition January 25, 2010 A5

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31 Commentscomment icon

@kmc

Congratulations on your generosity. If you want to pay more taxes, by all means have at 'er. Please note the huge gap between your own willingness to do something and advocating for other people to be forced to do it.

@kmc
"I own a house and would like to see a 5-10% increase in the overall property tax pool collection to reduce the infrastructure deficit. "

So start giving the city an extra 10% per year then. Its perfectly legal.

@Paket

I own a house and would like to see a 5-10% increase in the overall property tax pool collection to reduce the infrastructure deficit. I don't mind paying my portion of the increase, because I can't really afford to repair the roads, improve transit, increase water treatment, etc. by myself. I'm also not wealthy by any means, but understand how far behind the city is in this regard.

I also agree a couple other posters that the 2% cut in the GST was idiodic. It bought some votes and helped worsen the federal deficit at a time when the government needed the income. I don't feel the 2% in my pocket as much as we'll be feeling the interest payments for years and years and years.

It's always better to pay for things upfront as much as possible, and that's true with government and taxes as well. Deficits are tough to pay off and are costly. Waiting to repair infratructure costs significantly more in the long run. We've waited to make repairs, and are now paying with deficits, how smart is that?

I strongly suspect that the ones clamoring for a tax increase aren't the ones that will be paying them.

Just sayin'

I keep the heat way down at night to save money.We are cold,but we use extra blankets to stay toasty warm.At least we are living within our means,not like some families who live in their big mansions with the heat up!

Steve

I'm not against raising/elimating the property tax freeze.

However, I am against the fact the our school taxes are so high.

We have far to many school boards and there are far to many fat cats doing little to help and/or hold costs. Every year thay are always crying the blues that they need more and more money.

If the number of school boards was reduced by 30 or 40 per cent, just think of how much money could be made availble to pay teachers salaries.

Reduce/eliminate the amount of duplication and then just maybe they would not be asking for additional funds year year.

It sad when school taxes are 33% or more of our actual propery taxes.

Unless changes are made to clean-up an out dated system, almost everybody will keep complaining about their taxes.

If anyone wants to complain, then they should be going after the school boards and stop complaining about their actual property taxes.

Also, as for the re-assessment, I don't think anybodies property went down because most of the city's housing market is at a all time high.

In addition, look at then number of new housing projects and each new unit adds additional dollars to the cities fund. Than add on all the fees and surcharges plus the city fees/surcharges on water, hydro and gas all adds up to more than just a few million dollars.

Almost everybody needs to tighten their belts these days and I think the city and our Govt's must do the same or the well just may run dry.

@ ski..
Perhaps you should rethink calling people clowns? Seems slightly immature. For those who are currently enrolled in the TIPP program, maybe you should have a look at the website which clearly explains what the program is all about. It is clearly your own choice to join, and if you do not agree with the increase, by all means withdraw yourself from the program and pay it in one lump sum - noone is forcing you to pay monthly.

I'm not even going to read these - but I'm curious, did anyone here say "tax grab" or "cash grab" ?

Hey Sarcasm you obviously do not understand the TIPP program! Call 311 those clowns might be able to explain it to you! duh

@Sherri and others: If your taxes went up due to the 2008 reassessment, that had nothing to do with an increase in the pool of property taxes.

Your taxes went up because your property assessment went up at a rate higher than the city-wide average increase between 2003 and 2008, which amounted to approximately 67 per cent, once commercial properties as well as residential properties were reassessed.

You're paying a bit more, while property owners who saw their assessments rise less than the city-wide average are paying a bit less. But the overall pool of taxes on existing properties -- $427.7 million -- remains the same.

A property tax freeze means a freeze on the pool of taxes. The only new property-tax revenue the city receives, under a freeze, comes from brand-new properties.

Bartley Kives

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