Taxes projected to increase for first time since 2008

Nick Seebruch
Taxes projected to increase for first time since 2008
City Council hears CFO Tracey Bailey breakdown the changes in property values in Cornwall (Nick Seebruch/ Seaway News).

CORNWALL, Ontario – Chief Financial Officer Tracey Bailey told the Budget Committee that the Operating Budget would need a 1.57% or $1, 069, 521 increase to the tax levy in 2017.

Bailey broke down for the committee the increases and decreases to revenue and expenditure that the City can expect to experience over the coming year.

From last year, expenditure will increase by a net amount of $7, 032, 927 and the net revenue take will be $6, 215, 304.

A part of the $1 million increase to the total tax levy will come from an increase to property taxes.

The average assessed property value increase will be $2, 237 or 1.38%.

These increases were determined through an Municipal Property Assessment Corporation (MPAC) phased in assessment of residential property values.

Condos will see the greatest increase in value of 1.85% or $3, 088.

The total average assessed increase by 2020 will be $8, 948.

However, there are decreases in other tax classifications.

Most significantly, commercial and industrial taxes will decrease by roughly $1.4 million and $84, 555 respectively.

“This is a scary document,” said Councillor Andre Rivette. “MPAC makes these rules, these businesses try to appeal them, we follow the rules but are caught in the middle.”

Rivette then asked how these decreases to the tax levy will be made up.

Bailey said that when taxes are reduced in one class, they are made up in others, in this case, residential.

To accommodate the 1.57% increase to the tax levy, tax rates are proposed to increase by 3.05% across all tax classes.

That rate will add $629, 521 to the levy right away, the remainder of the 1.57% increase is expected to come from forecasted growth in property values of roughly $440, 000.

Bailey put down the increase to the taxes to a shift in Class Assessments of property values whether they be residential, commercial or industrial.

“The hits we are seeing here, are they one time onlys or will they be year to year,” asked Councillor Elaine MacDonald.

Bailey told Council that after the initial hit, the future budgets should adjust and stabilize.

CAO Maureen Adams said that these seismic changes to the tax structure comes from MPAC’s significant changes to their assessments of property values.

MPAC assesses property values once every four years.

“My frustration is that we’ve seen these massive changes in Commercial property values, and then in four years we could see a massive correction. This has lead to massive shifts in our Class Assessments,” said CAO Maureen Adams. “(MPAC) Must have known going into this year that they’d be making these adjustments, but when do they tell us? October.”

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