Mayor Shari Decter Hirst was wrong when she claimed that Brandon municipal property taxes were to increase by 5.28 per cent next year. To be sure, the mill rate is to increase by that number. But focusing on the mill-rate increase ignores the fact that it will be applied to properties whose total assessed values has increased by 14 per cent. When the new mill rate is applied to the reassessed property base, the total increased tax haul is more than 19 per cent.
Refusing to count tax-increase windfalls that occur when property assessments increase without offsetting mill-rate rollbacks is a shell game that has been pretty much wiped out, at least in Winnipeg. City council has had a policy of rolling back mill rates to offset increased assessments for as long as old hands at city hall could recall. Most recently, when assessments soared as the result of a reassessment in 2009, the mill rate was rolled back to 15.3 from 25.5 so as to prevent an unauthorized windfall.
Some Winnipeg school boards continued to pull the "old school division trick" until very recently. It's unclear why the Winnipeg board most recently abandoned the practice -- transparency, hopefully -- but last year all school divisions in Winnipeg rolled back their mill rates inversely of the increased assessment base.
The practice of cutting mill rates so as to prevent increased taxation by stealth is a good one. It makes tax increases, cuts or freezes transparent and ensures that councillors are accountable for levying the taxes they collect.
But it's not what happened in Brandon, where Ms. Decter Hirst argued throughout the budget-setting process that the focus should be on the mill rate, which in the end was a very small number compared to total tax haul -- 5.28 per cent versus 19 per cent. By focusing on the mill rate, taxpayers were led to believe their taxes will increase by about $100 next year when, in fact, the average increase will be more like $400.
On Wednesday, Mayor Decter Hirst told the Free Press that focusing on the change in the mill rate, not on the overall tax haul, was the long-standing practice in Brandon, and she had simply followed it.
She said she was not aware of the Winnipeg city council practice, which at the very least would have required Brandon council to begin its budget deliberations by acknowledging that a mill-rate increase was in addition to a 14-point, reassessment-induced tax increase.
"It was not a trick, just the way we always did it," she said.
To her credit she added: "I hear what you're saying about transparency and I agree 100 per cent. I'll go back to the administration and see how we can communicate all this in a clear, transparent fashion."
There are 197 municipalities in Manitoba, and 38 school boards, all with legal authority to tax property. But there is no standard by which they are required to explain property tax increases. That likely explains why, for the most part, it is taken for granted that assessment, portioning and mill-rate issues are too complicated for taxpayers to comprehend.
But taxpayers can only know as much as they are told. When property owners get tax bills showing increases that are four times what they were told to expect, they know that if they weren't tricked, they certainly were not told the whole story.