In the name of reducing the growing regulatory burden being placed on businesses, the Board has requested that the 2017 tax increase not rise above the rate of inflation in Ontario. Read the full letter here.
Given the harsh economic realities facing business owners going into 2018, the Board of trade submitted a second letter in early November that outlined ways the City of Brampton can look for efficiencies and limit the tax increase. The following was recommended:
1) Provide better transparency: It is difficult for Councillors to recommend solutions that will reduce the proposed property tax increase in the absence of sufficient information. Please post all line items so that proper analysis can occur by staff, Council and the general public. Currently, only one-line department totals are available online. This differs from 2015 when all line items were made available online to the public.
2) Consider taxpayers’ harsh economic/market realities in 2018: Many businesses and taxpayers will experience a difficult 2018 because of increased costs due to provincial workplace legislation; federal tax increases; disruptive technologies changing consumer behaviour; and increasing protectionism in US market. For many in our community employers have advised that hours will be reduced, layoffs and terminations will occur, and new hiring will be delayed. Minimizing the property tax increase can lessen that burden.
3) Align tax increase with inflation: The municipal tax increase should be closer to rate of inflation 1.2%. Currently the proposed property tax rate increase is 3.7% - that’s 3 times inflation. At that increase, overall tax increase, including regional and education tax would be 2.7%. The municipal tax increase, last year, in 2017 was 3.3%. Ideally, the overall tax increase (municipal/regional/education) should be less than 2%.
4) Adjust user pay and service levels: Conduct a service level review. Review fee-setting policies. Fee revenue is dropping as a percentage of total revenue. This puts undue pressure on the property tax increase.
5) Consider alternative funding sources: Consider local improvement charges; capital service agreements; and alternative service delivery to reduce the property tax burden.
6) Use surplus more strategically: The current operating surplus is $12.85 Million. Given 2018 is a tough year for taxpayers, consideration should be given to collecting only what the City needs. The General Rate Stabilization Reserve has exceeded the city’s target. It now stands at $65.5 Million. Total reserves now sit at $505M, up from $109 in 2010. Not all the $12.85M surplus needs to go to the GRS or ARR (Asset Replacement Reserve). Contributions can be made to these reserves – it would put them in excess of target – so, it begs the question does the city really need another 2% increase in property tax? Reserve contributions can be made, AND the tax increase dedicated to infrastructure (2%) can be reduced by at least 1%.
7) Consider debt-timing: do not tax for capital expenditures that won’t be spent: In 2018, the capital budget includes borrowing of $93.4M towards the proposed Centre for Education, Innovation and Collaboration; downtown improvements; and the fire and emergency services campus. The Region of Peel requires 18 months notice to borrow on behalf of Brampton projects. However, borrowing costs are budgeted to occur in 2018 but won’t be incurred until much later. There is no rationale to tax for something that we know will not be spent. The base or infrastructure tax increase can be reduced by at least 1%.
8) Assume some provincial/federal contribution: The current budget assumes no contribution from provincial or federal sources in 2018. Although difficult to quantify, it is not a reasonable assumption that Brampton will receive nothing at all. This is further rationale for a reduction in the proposed base increase amountRead the full letter of recommendations here.