Flat tax on its way out

Mayor asks if there is an appetite to step back; have staff analyze flat tax decision. Four Councillors say no.

Despite a last attempt by Mayor Don McCormick — who has been arguing against removing the flat tax from the start — to have Council step back and ask for a staff report on the consequences, there was no appetite among a majority of Kimberley City Councillors for such a move.

The flat tax will be reduced by $80 this year, beginning a ten year process to end it entirely.

In the end it came down to two differing philosophies on the value of the flat tax. Mayor Don McCormick firmly believes that removing it puts too big a burden on higher value property owners, as once the flat tax is gone, the missing income has to be made up, likely in millrate increases.

On the other hand, Councillors Kent Goodwin (who led the charge), Bev Middlebrook, Darryl Oakley and Nigel Kitto believe the flat tax (which is the same $786 for every property) is unfair to those who own lower value properties.

Both sides put up good arguments at a special Council meeting on Wednesday evening, but the four councillors in favour of removal of the tax would not be swayed. The motion that passed a couple of weeks ago will stand, although it will come to Council again at the regular meeting on Monday night just to finish the process.

McCormick brought the issue back to Council after it was already passed, which is his prerogative  as Mayor.

His point was that every single time Council makes a major decision there was a staff report which offers recommendation to Council.

“After discussion at Council, there was a vote which was four to three,” he said. “There was no time to engage staff for a report. It was a done deal. But there were questions in my mind. What happens if we do this? Are there other consequences?

“Do we have the capacity to absorb this and if so how? The millrate is important to the community. Keeping it within reason is important.

“My goal isn’t to convince any of the four councillors to change their minds but to ask Council to step back and take a broader look.”

“I thought about it,” said Goodwin. “But I think we move forward. I am prepared to make the motion again. I am not against analysis. But it’s a small step each year.

“We have the highest flat tax, a parcel tax, high utility fees. For lower value properties it’s not fair.”

Coun. Sandra Roberts supported McCormick’s suggestion of a staff report, saying she voted against the motion because she didn’t feel she had sufficient information. Coun. Albert Hoglund also agreed with the Mayor.

Hoglund said that the flat tax was implemented in 1990 because of the wide disparity of property values in Kimberley. And he doesn’t feel enough has changed to warrant getting rid of the tax.

“I don’t think we are there yet. “When this flat tax ends in 10 years, higher end homes will be hit hard.”

“No large decision is easy,” said Middlebrook. “But out of 162 municipalities in B.C. only five have a flat tax. I can’t see it being best for the municipality. If it was the best thing, why aren’t there more of them?”

McCormick argued that Kimberley, with its heavy dependence on residential property taxes was somewhat unique.

“I think we have to believe in Kimberley,” Goodwin said. “We have to believe people will still want to come here. I’m not faulting Council of the day. At the time it made sense.

“I understand there are practical concerns but I think we are going to be okay. There are some questions we can’t answer. Yes, taxes are a factor when making decisions about moving here, but what’s the point of impact? There is no answer for that. That’s where the ten years comes in. It allows us to learn as we go. If we were getting rid of the entire flat tax at once, that would be scary.”

“It is expensive to live here,” McCormick said. “We have no industrial tax base. For every other decision we have always relied on staff for analysis. This is clearly an important issue and we didn’t do that. That’s not fair.”

“The solution is diversify our tax base,” Goodwin countered. “I commend the Mayor for his efforts in that direction.

“Taxing lower income residences is not the solution.”

“It is not taxing lower income people, it is taxing lower value properties,” McCormick said. “We have a lot of retirees in the $250,000 to $400,000 range homes.”

Middlebrook argued that if something was not done about the flat tax there was a risk that Kimberley would squeeze out lower income residents.

“Lower income people don’t own, they rent,” the Mayor said.

“The community belongs to everyone,” Middlebrook said. “And there are single parents and seniors in these low value homes.”

“That’s an emotional argument,” McCormick said. “We are attempting to discuss moving forward with data.”

“I believe in a balance of emotion and logic,” Middlebrook said.

McCormick asked once more for approval for a staff report.

“I’ve been trying for years to get Council to direct staff to do research,” said Goodwin. “It didn’t work.”

“At no point in time did I hear that request,” McCormick said.

“I’ll accept some blame for not pushing hard enough but I’ve raised it,” Goodwin said.

“I’ve heard him bring it up,” Middlebrook said.

“It was brought forward last year during the budget,” said Kitto. “We voted on it and it was very close. It should surprise no one that it has been brought forward again. And steps have been taken to mitigate it over ten years.”

“This is paid for entirely on the back of the millrate,” McCormick said. “We need a staff report. My issue isn’t whether we do or don’t have a flat tax. It’s how we go forward and manage it.”

“It has passed in a democratic process,” Oakley said. “It is about fairness and keeping the integrity of the community.”

The issue ends there, though CAO Scott Sommerville says that during the ten year phase out, chances are the decision will be revisited by Council. However, once those ten years have passed and the bylaw is gone, there is no going back.