It’s customary for property owners to grumble come tax time, and a first glance at the figures for Ladysmith’s financial plan for the next five years might make property owners think they really have something to gripe about… but not so fast, say the number crunchers at city hall.
On Monday, May 2 Ladysmith council approved its five year financial plan, which sees it through the coming year and tallies up expected revenues and expenditures each year until 2020.
Included in the five-year figures is a 21.64 per cent increase in revenues from property taxes, which are expected to climb from $7.69 million to $9.35 million; and a 67.71 per cent increase in parcel taxes from $1.78 million to $2.98 million.
That’s on total revenues of $25.68 million.
Those figures compare to an increase in revenues from property taxes of 9.86 per cent projected in the five years between 2011 and 2015; and an 8.24 per cent estimated increase in parcel taxes over the same five-year time frame.
Turns out the projections made back in 2011 were off. In 2015 Ladysmith actually budgeted for property tax revenues of $7.46 million, about $1.45 million more than projected in 2011, and a 24.11 per cent increase over the five-year planning period instead of the 9.86 per cent projected.
As for parcel taxes, they ended up being $1.54 million in the 2015 budget, $586,710 more than projected in 2011 and a 74.90 per cent increase, instead of the 8.24 per cent estimated in the five-year financial plan.
But the numbers for overall revenue from property taxes don’t translate into an accurate picture of what individual property owners are likely to see on their tax notices over the a five year planning period, says Ladysmith’s Chief Administrative Officer Ruth Malli.
You have to factor growth into your calculations – more property owners paying taxes equals lower property taxes for each individual owner. You also have to remember council’s ability to vary future budgets if that mitigating growth doesn’t materialize.
“To suggest that ‘property taxes’ (to the average homeowner) are going up by that same percentage amount (as total revenues from property taxes) is simply inaccurate,” Malli said, in response to a query from the Chronicle.
“The projected property tax revenue includes this new growth, if for some reason it does not occur, then Council will review the impact on the homeowner – annually – and most often reduce the expenditure side of the budget.”
To illustrate the point the town produced a chart showing the year over year property tax increases the owner of a standard family dwelling in Ladysmith faced between 2012 and 2016 (see below). The ‘Average SFD tax increase’ was about: $63 in 2012; $50 in 2013; $65 in 2014; $90 in 2015 and will be almost $50 in 2016.
A typical family dwelling, valued at $285,400 in 2015 is worth approximately $294,100 in 2016 and will be assessed $1,616 in property taxes.
As for the increases in the water parcel tax, which goes up from $160 to $225 for all homeowners, Malli notes that this will go toward ‘required infrastructure’: an $11 million to $14 million water filtration plant needed to meet water quality standards regulated by the Vancouver Island Health Authority.
“The investment in this infrastructure supports the economic development as well as the health and wellbeing of the citizens,” Malli said.