Cities
could shape their destinies
if taxes were
better shared
It's property tax time on the municipal calendar
and slavery is on my mind. I'm a municipal councillor, representing
a rich ward, so notions of slavery should be the last thing to
preoccupy me. I'm supposed to be in charge. I'm the person that
a 78 year old widow phones to complain that her taxes have risen
so steeply that she does not know is she can afford to stay in
her house. She isn't alone. Over 40 per cent of the households
in my ward will receive property tax increases this year, some
of them as high as sixty per cent.
The injustice of it makes me boil. When the
old Manufacturers Tax was replaced by the GST. The GST became
a city tax. Between 80 and 90 per cent of the Goods and Services
Taxes are raised in cities. Yet none of the GST is returned directly
to the cities. In Ontario, there is nothing for urban transit,
nothing for social housing, nothing for public health and little
elsewhere. When city councils complain, they are accused of whining.
'Live within your means', we are told by Mr. Harris. Cities
have plenty of means, we just can't access them, because we are
forced
to rely exclusively on the oldest, more regressive form of taxation
in the nation and it's killing cities.
The property tax is killing cities because
it was never designed to carry national and provincial costs
and because it twists the development of the city. Sixty-five
per cent of our cities taxes are raised in the old parts of the
city, but they don't stay there. They are funneled out to pay
for new growth in the suburbs. We've seen the results of this
water wheel south of the border and it's always the same. The
older part of the city declines. Streets become broken and pitted.
The centre becomes the home to the very rich and the very poor.
Then you paper the suburbs with big box malls and parking lots
- because the initial costs are cheap. All you have to do is
asphalt some parking lots and throw in some off ramps. The real
costs come later.
Ottawa is the high tech capital of Canada -
32 people move here every day, 365 days a year. Many of them,
happily, are doing well. High tech engineers get paid well and
they immediately begin paying a whole range of taxes: - Income
Tax on their salaries, GST, provincial sales taxes on their cars,
gasoline, alcohol, land transfers if they buy property and so
on. The growth in Ottawa has generated a 30 per cent increase
in federal and provincial tax revenues from our city alone. Yet
virtually every public service that young engineer will use,
roads, bridges, buses, trains, ambulances, public health, police,
sewer, water and so on come from one thin tax - the property
tax. And it can't do it all.
While municipal councillors are sharing their
offices with staff, trying to deal with homelessness, and green
house gases, they have to sit back and watch the federal and
provincial governments wrack up tax surpluses and give tax cuts
on the millions of dollars they collect, - mostly from cities.
I was so beside myself with frustration at
a recent press conference that I advocated that my constituents
not pay their property taxes in protest. This certainly got the
media's attention but it was born from pure frustration, not
logical thought. This is a very dangerous route to go down. Tax
revolts in California have gutted the States school system, imperiled
its ability to deliver electricity and moved California from
being one of the most progressive states in the American Union
to lives led behind gated communities. It's not a route that
I would like to see taken, but it's the direction that we are
headed whether I like it or not. Presented with an unfair situation,
the most logical response is not always the one taken.
This country desperately needs tax fairness.
When the federal government downloaded services onto the provinces,
they also downloaded income tax points. The province should have
done the same thing for municipalities when they downloaded services.
And the federal government needs to return one per cent of their
city tax, (GST ) to the municipalities where they were collected.
The one per cent solution is not complicated
and once done the dump down equation would be changed forever.
Suddenly cities would not be perpetually constrained in every
direction. One per cent of the GST and one per cent of the Province's
Sales Tax would buy cities their freedom and we could kiss our
chains goodbye.
With fair tax sharing, Ottawa could bring in
light rail system that really served the city from one end to
the other, instead of a pilot line cobbled together with leased
trains and old track. Ambulance response time could be changed
from one of the worst in the province to one of the best. We
could save schools that the province in its wisdom wanted to
close, build ones where they did not. We could assemble land
to bring green corridors to the city and new trees to our city
streets. We could invest in community based hospitals, the arts,
build new community centers and repair old ones. From Vancouver
to Halifax, city councils would suddenly have the resources to
create cities that would be marvels instead of the best reaction
to not enough for anything. And out citizens would not complain
about their property tax because we'd lower them.
Then maybe I would be amused by Parliament's
appetite for discussing golf courses and Mr. Harris' devotion
in tax cuts.
Friday,
April 6, 2001