Thursday, August 28, 2014

Cycling in the South of Fraser

Yesterday on CBC Radio One’s Early Edition, reporter Jesse Johnston did a feature on cycling in the South of Fraser. Johnston talked about how Surrey is investing in cycling in a big way, and noted how Township of Langley Council denied increasing funding for cycling infrastructure. I was also featured in the segment and talked about the gaps in cycling infrastructure, and how those gaps are limiting the uptake of cycling. I also mentioned that we need continuous cycling routes, which separated cyclists from motors, as the majority of people won’t cycling unless they feel safe.

He also mentioned my campaign for election to City of Langley council this fall.

I’ve embedded a link to yesterday’s Early Edition in this post. The feature starts at 1:52:30

Wednesday, August 27, 2014

2014 Property Taxes in Metro Vancouver

The other day, someone was telling me that taxes in the Township of Langley were lower than in the City of Langley. This was, as they told me, because the residential tax rate was lower in the Township than the City. I knew that taxpayers in the City pay less on average, and decided to do a bit more research.

Local governments in BC use property taxes to fund a great deal of local government services. Property taxes are charged based on the assessed value of a property multiplied by a tax rate. This seems simple enough, but it gets a bit more complex.

When local governments figure out their budget, they find out the expected increase in operating and capital expenses and they figure out what revenue will be needed. Based on the revenue needed, they will adjust various property tax rates and fees.

The tax rate is based on the assessed value of property, for example on my tax bill, the tax rate will go up and down based on the change in property value; even as the total tax collected increases.

The tax rate is more an indication of property value in a community, and is completely useless as a tax comparator. The following graph notes the residential property tax rate, and compares it to the per capita residential taxes paid. It also compares it to the total taxes paid which include school taxes, user fees, Metro Vancouver taxes, and TransLink taxes (to name a few.)

Residential property tax rate compared with per capita total residential property taxes and per capita total taxes in 2014. By municipality. Source: Local Government Tax Rates and Assessments. Select graph to enlarge.

As you can see, when looking at the per capita data, City of Langley residents on average pay less taxes than Township of Langley residents. Also interesting to note is that most communities in Metro Vancouver have similar per capita taxes.

Local governments in Metro Vancouver rely on more than just residential property tax to fund operations.

Total and percent total of different local government taxes in Metro Vancouver in 2014. By municipality. Source: Local Government Tax Rates and Assessments. Select graph to enlarge. Please note that the source document contains a typo re: user fees in the Township of Langley, corrected in the graph. See Township of Langley budget presentation for more information.

The graph shows that some municipalities rely more heavily on business property taxes than other. For example, West Vancouver almost entirely relies on residential property taxes while the City of Burnaby relies more on business property taxes. Of course on top of that, many municipalities charge user fees for things like water, sewer, and solid waste collection. This shifts reliance away from property taxes to user fees.

I did want to point out that the “All Other Taxes” includes School Tax, Metro Vancouver Regional District Tax, and TransLink Tax whose rates are sets regionally.

As you can see, property tax is fairly complex. Looking at residential property taxes is only a small part of the equation.

Tuesday, August 26, 2014

Running for Langley City Council

As you may know, I have decided to run for Langley City Council this fall. In preparation, I have setup an election website with more information about the campaign including information on how to donate or volunteer.

Nathan Pachal in front of Langley City Council Chambers with nomination package.

With summer coming to a close, the campaign for City Council will begin in earnest. On Friday, the City of Langley made available its local government nomination package. I picked up my nomination package today.

Over the coming weeks, I will be sharing some of the exciting things planned for the campaign, in the lead up to the November 15th election.

Monday, August 25, 2014

Property Tax and Transit

Everywhere in BC, the provincial government pays for about half of the total cost to operate transit systems, expect in Metro Vancouver.

TransLink was created at the turn-of-the-century as the province was interesting in getting out of directly funding transit service in Metro Vancouver while the region was interested in get direct control of transit delivery. The original version of TransLink was setup to give the region both responsibility for the operation and funding of transit service. One of the details that needed to be worked out was a new funding arrangement.

In the rest of BC, property owners pay a hospital tax. As part of the new deal for transit in Metro Vancouver, the province agreed to eat the cost of the hospital tax in exchange for getting out of directly funding transit in the region. The region’s municipalities could then use this tax headroom to increase the amount of property tax to fund transit. The province would still contribute to transit projects, but it would be out of the business of paying for the day-to-day operations of transit in Metro Vancouver.

On the surface, it seemed like a win-win. The region would have more control of transit while the province would be able to reduce the amount of money it spent on transit in the region.

Skip forward to today; due to various changes in the TransLink governance model, the province basically controls transit in Metro Vancouver again, but the region pays for all the operating costs. More money is needed to pay for much needed transit expansion, but the province wants the region to pay for transit service expansion with property tax. The region's mayors say that this is unfair.

The province claims that there is still headroom in property tax from the eliminated hospital tax to pay for transit. Is this truly the case?

Coquitlam and Abbotsford are about the same size. In 2013, they both collected $188 million in property tax for local government services (this does not include school, regional district, transit, or hospital property tax.)

In 2013, Abbotsford property owners paid $5.3 million in hospital tax and $3.1 million out of local property tax for transit. This is a grand total of $8.4 million dollars.

Coquitlam property owners paid $12.9 million to TransLink in 2013. Comparing Abbotsford and Coquitlam, it would appear that there is no more headroom to pay for transit. In fact, the headroom was exceeded by $4.5 million.

Transit service frequent and reach is lower in Abbotsford than in Metro Vancouver. Comparing transit service in Metro Vancouver and Greater Victoria is more useful.

Transit in the Capital Regional District is managed by the Victoria Regional Transportation Commission. Transit governance in Victoria is different than the rest of the province. Transit in the Capital Regional District is funded by fares, property tax, and a regional gas tax, with the provincial government contributing about a third of the revenue. Property owners in the Capital Region still pay the hospital property tax.

The Township of Langley and Saanich are about the same size. In 2013, Saanich property owners paid $7.9 million in hospital tax and $7.4 million in transit property tax. This is a grand total of $15.3 million.

Township of Langley property owners paid about $12.5 million to TransLink in 2013. In comparing Saanich and the Township of Langley, there is about $2.8 million in headroom to pay for more transit.

Langford property owners contributed a combined total of $4.7 million for hospitals and transit while property owners in Port Moody contributed $3.1 million to transit in property tax in 2013.

It would appear that the province is correct that there is still some headroom to increase property tax to pay for transit in Metro Vancouver, though not enough to pay for all the transit service improvements needed.

Right now the mayors in Metro Vancouver have drawn a line in the sand, refusing to increase property tax beyond the rate of inflation to pay for needed transit improvement.

While another source of funding for transit will be required in Metro Vancouver, the region's mayors will likely need to agree to increase the property tax rate for TransLink. The province has basically said that it won’t give the region another funding source until property tax is increased to pay for transit, and it appears that there is still some headroom to increase the property tax to pay for transit in our region.