A slight increase in the business tax rate is needed to rebalance the property tax burden that has shifted to homeowners, says Coun. Ross Eadie.
Eadie held a news conference outside Mayor Bowman’s office this afternoon where he said the real assessed value of all business properties in the city has declined in the last five years compared to massive increases for owners of homes, apartment buildings and condominiums.
"We’re told this is a tough budget year – residents have to be willing to pay more. So why are businesses getting a cut in their tax bill," Eadie (Mynarski) said.
Eadie said a small increase in the tax rate to generate $1.4 million will reverse the proposed cuts in the budget tabled last week – indoor swimming pool access, fall leaf clean-up, image route enhancements – and provide needed funds to cover costs associated with amendments proposed for the budget at committees this week – library book purchases, indoor pool promotions, community resource staff.
"Business is not hurting in terms of taxation," Eadie said, adding he’s lobbying members of council to reject the budget proposal to lower the business tax rate from 5.7 per cent to 5.6 per cent in favour of a small increase.
"By increasing the business tax rate slightly, we can solve a number of problems," Eadie said. "This increase will not hurt business – business is part of our community.
"I talk to businesses every day, they want to be part of the solutions in our neighbourhoods."
Eadie said he hasn’t determined the amount of the business tax rate increase, but estimated it would be probably less than 0.1 per cent.
Eadie displayed a chart that showed the changing values in property assessment between 2009 and 2014.:
Coun. Jeff Browaty, who held his own news conference on a transportation issue following Eadie, said he supports increased funding for library materials ($35,000) if a corresponding cut can be made elsewhere, adding however he stands behind the last week’s budget.
Coun. Jason Schreyer stood alongside Eadie during the news conference and said he supports the plan to amend the budget.
Eadie said business operators will have seen a net savings in their property tax bill as a result of the tax assessment falling for that category, adding that justifies an increase in the business tax rate to stem service cuts and provide services residents want.
The budget tabled last week, by Mayor Brian Bowman and members of his executive policy committee, is proposing a 2.3 per cent increase in property taxes, a 60-cent-per-foot increase on the frontage levy, and a $5 increase on the annual recycling fee.
Revenue from the frontage levy increase is the equivalent of an additional 1.3 per cent property tax increase.
Bowman’s budget has homeowners paying an additional $18.6 million in property taxes in 2015 compared to 2014 ($529.2 million versus $510.6 million), but the city will be collecting $1.3 million less in business taxes ($58.4 million versus $59.7 million).
The business community has long complained that it receives no extra benefits for the business tax. However, that tax was put in place by the city because the province would not allow it to impose a higher tax rate on business properties compared to residential properties, which municipalities in other provinces are allowed to do.
Eadie said a fair city budget isn’t one that increasingly shifts a greater burden onto homeowners.
"This is about tax fairness," Eadie said.
Aldo Santin is a veteran newspaper reporter who first carried a pen and notepad in 1978 and joined the Winnipeg Free Press in 1986, where he has covered a variety of beats and specialty areas including education, aboriginal issues, urban and downtown development. Santin has been covering city hall since 2013.
Updated on Wednesday, March 11, 2015 at 5:06 PM CDT: Writethru.