In the rush to create an Edmonton of our dreams, we are sometimes guilty of forgetting the hard costs.
Property taxes are painful. They are the most infuriating of taxes.
GST? An annoyance, but part of the background noise of modern life.
Income taxes? We hardly notice them. Our pay cheques are direct-deposited and we might not even look at the deductions.
In fact, if we get a raise at work, we’re pleased. We don’t typically jump to: “Darn it, my taxes just went up, too.”
Property taxes arrive each year like the bill at the end of a meal. We look over our bill carefully. Some years it’s a shock.
It’s complex, but property taxes are based on the estimated market value of a home. If your home is in a suddenly “hot” neighbourhood, your tax bill will jump by an amount higher than council’s stated increase.
In that moment, explanations of market-based assessment aren’t going to calm you down. Not if your property tax bill is hundreds of dollars higher than last year.
Property taxes are also regressive. At least to some extent. They reflect the market value of the property, not ability to pay.
Seniors living on fixed incomes in a humble home might see their property taxes rise beyond the average and beyond their household budgets.
Fortunately, the province offers programs where seniors can tap into their home equity to pay property taxes. But even so, an annual property tax bill can be upsetting to our civic elders.
So yes, property taxes are painful. And often infuriating.
And while they represent, on average, about five percent of what Edmontonians pay in taxes each year to all three orders of government,they don’t FEEL like a small percentage.
I want to live in a dynamic city. I want the local economy to prosper. I realize cities must invest money to attract investment and new business.
But it’s a fine, fine balance. Increasing taxes at a rate above inflation must only be done in extraordinary circumstances.
Sure, hiking taxes is simple. Cutting budgets without thought is also simple.
What is difficult is going through each and every civic service and establishing priorities.
I watched city councils do it for years from my perch as an Edmonton Journal reporter and columnist.
The best councillors struggled to find the balance during annual budget deliberations. They struggled when making cuts to legitimate programs or services.
They struggled when the final vote came, to increase the tax burden on property owners in Edmonton.
But struggle, debate and citizen input is crucial. Cutting services or programs without care and attention to the impact on the city and citizens is reckless.
But the same can be said for voting yes to most everything during budget deliberations and increasing the tax burden on Edmontonians.
My thinking?
Cities must be given a greater share of income tax, or new tools to generate revenue. American cities, for example, have a diverse mix of taxes and tolls to raise revenues from the economy.
Absent that, city council must always keep the needs of citizens in mind. Councillors must consider the the emerging generation, with its dreams of living in a dynamic city of national acclaim. We don’t want to lose bright young minds to rival cities.
But council also just remember its challenged citizens, living on below-average or fixed incomes.
Between them is the fine balance. And the struggle to find it.
(Photo: MacEwan LRT Station under construction, July 2013)