Council opted on Monday night to not pursue an opportunity to raise an additional $14,000 for the city from taxation of utilities — like Fortis — even though this tax hike was legally permissible.
Property tax for utilities, businesses, and other commercial properties are typically set as a multiple of the residential rate.
For example, if residences are taxed at $6.162 per $1,000 of assessed property value, and the business multiplier is 1.71, then business properties are taxed at $10.47 (1.71 times $6.162) per $1,000.
Currently, the tax multiplier for utilities is 5.63, but Coun. Laurie Charlton pointed out that “[BC regulation 31/2008] says we can be no more than 2.5 times the business class, or $40 per $1,000 [of assessed value], whichever is greater.”
Given that the tax multiplier for businesses is 1.71, he noted, the multiplier of 5.63 for utilities is already more than 2.5 times the business class. But, he said, it’s less than $40 per $1,000.
In fact, using this year’s proposed residential mill rate of 6.162, the utilities’ properties will be taxed at $34.69 (5.63 times $6.162) per $1,000, about $5.31 per $1,000 less than the cap permits.
The assessed value of utilities’ properties in Rossland is $2,725,600, so increasing the rate to $40 per $1,000 would generate $14,473 ($5.13 times 2725.6) in tax revenue.
Charlton forwarded a motion to increase tax revenue: “I think we should be doing the same as a lot of other municipalities and going up to the $40 per thousand for utilities.”
CAO Victor Kumar replied: “This is how local governments get into trouble.” And although he noted that “it may sound good,” Kumar did not provide substantive arguments against Charlton’s proposal.
Coun. Kathy Moore clarified: “These are very large corporations in our province that have facilities in our town, that’s who we’re talking about? What would be the problem?”
Kumar made an analogy to raising taxes on industry and said, “The moment we go to the cap, soon complaints come in.”
Later, Kumar tried a different argument: “If the cap comes down — and we never know what happens with changes in government — where would we pick up the revenue?”
It was pointed out, however, that each year the tax structure is decided upon anew, and provincial changes could be adapted to by municipal changes, and would be unlikely to counteract $14,000 in a single year in any case.
Mayor Greg Granstrom spoke against the proposal on the basis that “staff spoke against it” and because “staff spent multiple, multiple hours on this project.”
He called the question and Charlton’s motion was defeated, with Moore in favour and Granstrom, Coun. Hanne Smith, and Coun. Kathy Wallace against.
Later Moore said: “We have all this money coming in from the residences and here we had an opportunity to get just $15,000 in from the utilities and we turned it down. I don’t understand that.”