Monday, February 1, 2016

City of Langley’s Financial Plan: Property Tax and Expenditure Increases

City of Langley Council is in the process of approving the 2016 Financial Plan. Last week, I posted about select infrastructure improvement projects that Council was considering.

Overall, City of Langley Council is proposing a budget which will require an additional 3.75% increase in revenue.

Policing is the single largest expense in the City’s budget. City Council is proposing to hire a new RCMP member this year. Due to this new hire, combined with general pay increases for current RCMP members, the policing budget in the City may be increasing by $427,340. Put another way, 27% of this year’s budget increase is due to policing costs.

Due to labour contracts for municipal staff (including the fire department), City Council is proposing to allocate an additional $207,175 to employee wages and benefits.

The new Timms Community Centre requires more staff and increased maintenance than the current facility. City Council is proposing a budget increase of $183,165 for the new Timms.

Some of the other proposed expenditure increases are for improving the maintenance of our parks system. For example, City Council is proposing to increase the trail and sports field maintenance budget by $67,220.

More details on the proposed spending increases can be found in the draft 2016 – 2020 Financial Plan.

So what does this mean for the average taxpayer in the City of Langley?

If you live in a single-family home, you’ll likely see a $48 increase in your property tax bill that goes to the City. If you live in a strata, you’ll likely see a $40 decrease in your property tax. If you own a business property, you’ll likely see a $800 increase in your property tax bill.

Due to how property taxation works in BC, all residential property is treated the same. The really doesn’t make sense. For example in Langley City, the average value of a single-family house has gone up around 11.75% while the average strata has gone up by around 2.25%.

Because the City can only apply one tax rate to all residential property, you can get in the situation of some people seeing a property tax decrease while others see an increase.

This happens in other municipalities throughout BC. The provincial government would have to increase the granularity of property classes to avoid this. I don’t see the province doing this anytime soon.

If you want to provide feedback on the 2016 Financial Plan, the City is having a public hearing starting at 7pm in Council Chambers tonight.

3 comments:

Brendan Dawe said...

"Due to how property taxation works in BC, all residential property is treated the same. The really doesn’t make sense. For example in Langley City, the average value of a single-family house has gone up around 11.75% while the average strata has gone up by around 2.25%."

What are you suggesting? If the province asked you to adjust the property tax system, would you be structuring it so that the property tax collected from stratas was also going up right now, despite the fact that stratas compose a lesser proportion of the City's total property value than previously?

I'm curious why you see this as a problem.

Nathan Pachal said...

I own a condo in Langley City. A friend of mine owns a single-family house. The population of the City of Langley is static. Because of the property tax system, for the last 5 years his tax bill has gone up while mine has gone down. The proportion of services that we use hasn't changed. That doesn't seem right.

By having a more fine-grained property classification system, Cities an do a better job of matching taxation with servicing costs.

Brendan Dawe said...

Homeowners are receiving an enormous unearned wind-fall all across the region from increasing land values, and because of that condo owners should have to pay extra taxes?

Single family homes require many more meters of public utility per person - more road, more sidewalk, more water main, more garbage collection route-km and bus route, longer everything all costing more money for maintenance and operation. If anything, the condo owners should be getting a tax break, not a tax hike.

And even then, the idea behind the property tax isn't 'pay what you use' it's 'pay in proportion to your share of real estate wealth.' If you don't think this is a reasonable principle for local government funding, that's one thing, but why single out condos if that's the case? Why not just go for a poll-tax if the value of property isn't a proper measure?

Suppose, two neighborhoods, one is becoming more fashionable and one is becoming unpopular for new buyers, causing prices in one to go up and prices in another to go down. Should the property tax system be adjusted so that the people in the less popular neighborhood have to pay more? How about two houses, right next door. One is rezoned and increases in value, while the other remains residential low-density zoning. Should the rezoned house get a tax break because the value of their property went up while use of public services was the same?

I'm sure my brother and sister-in-law in Langley City will be thrilled to know that you apparently want raise their taxes so that house-owners enjoying galloping property values can pay less.