I usually avoid talking about taxes. Nobody likes them — I don’t, you don’t, even the governments who spend so much time and effort siphoning off our hard-earned cash are probably sick of catching flak month after month, year after year just for doing what they do best. Of course this isn’t news, and you don’t need me to tell you how you feel about watching your livelihood evaporate into general revenue, but humour me while we take a look at the truly unique predicament that the City of Victoria finds itself in this year.
In a recent presentation to council on budget needs for the next five years, the best case scenario saw taxpayers absorbing a compounded rate increase of 20 per cent just to keep the city’s momentum going. That’s a 20 per cent tax increase barring any interference from a deflating tourist economy or any surprises from the city’s growing portfolio of major infrastructure projects.
The latter is particularly nerve-wracking when you consider the statistical likelihood that the Johnson Street Bridge replacement budget alone could increase by around 34 per cent before all is said and done. Depending on how efficiently the city and MMM Group can manage their money, that alone would mean an additional tax hike of around nine per cent per year for three years.
According to a recent report on the distribution of property taxes between residents and businesses, it’s home owners and — through landlords — renters who will bear the weight of the city’s rising expenses. While the report thankfully calls for council to halt the meteoric rise of property taxes, it also recommends shifting the burden from businesses to residents by decreasing the proportion of city taxes paid by business from 49.4 per cent to 48 per cent over three years.
The city is stuck between a rock and a hard place. With businesses disappearing in the wake of continuing economic decline, and residents fleeing the capital in search of a more reasonable cost of living, Victoria’s tax base evaporates while remaining residents demand more from local government in return for their investment.
There is no single solution to balancing the budget, but I can’t help but wonder if a bit of patience, prudence and humility won’t yield better results than sqeezing ever more coin out of an already strapped tax base. M