Report to: General Committee Report
Date:
SUBJECT: 2009 Tax Ratios
PREPARED BY: Paul Wealleans, Director, Revenues
RECOMMENDATIONS:
1)
THAT the report “2009 Tax
Ratios” be received for information;
2)
AND THAT Council support
retaining the same 2008 tax ratios as established by Regional Council for the
2009 tax year;
3)
AND THAT the Region of York be
informed of Council’s decision;
4)
AND THAT staff be authorized
and directed to take the actions set out in this report.
EXECUTIVE SUMMARY:
Staff recommends that the 2009
tax ratios for the Region of York remain unchanged from 2008.
PURPOSE:
To advise Council
of the issue of setting tax ratios for the 2009 tax year.
BACKGROUND:
Tax ratios represent the
relative tax burden borne by each property class relative to the residential
class. The residential ratio is always 1.0.
In 2008, the commercial tax ratio was 1.2070, which means that
commercial tax rate is 1.2070 times higher than the residential tax rate. Each
property class has a specific ratio. The Region of York must, annually, pass a
bylaw to set its tax ratios for the year for both upper tier and lower tier
municipalities.
Table 1 shows the tax ratios
for the Region of York from 1999 to 2008:
|
Property Class |
Ranges of Fairness |
1999 & 2000 |
2001 |
2002 |
2003 |
2004 to 2008 |
|
Residential |
1.0000 |
1.0000 |
1.0000 |
1.0000 |
1.0000 |
1.0000 |
|
Multi-residential |
1.0 to1.1 |
2.0875 |
2.0875 |
1.3000 |
1.0000 |
1.0000 |
|
Commercial |
0.6 to 1.1 |
1.1190 |
1.1190 |
1.1000 |
1.1000 |
1.2070 |
|
Industrial |
0.6 to 1.1 |
1.3427 |
1.3427 |
1.3000 |
1.3000 |
1.3737 |
|
Pipelines |
0.6 to 1.1 |
0.9190 |
0.9190 |
0.9190 |
0.9190 |
0.9190 |
|
Farmland |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
|
Managed Forests |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
Unless provincial approval is obtained, municipalities
may only move their ratios closer to the Ranges of Fairness. Provincial
approval must be obtained to move ratios further away from the ranges. The 2003 reassessment caused a significant
shift to the residential class and Regional Council, with the approval of the
Province, increased the ratios for the commercial and industrial classes to
offset the shift. The ratios have remained constant since 2004.
The 2009 reassessment resulted
in the commercial and industrial classes increasing in assessed value by approximately
30% while the residential class tax increased by 20%. The higher assessment
value increase experienced by the commercial and industrial classes (30%
compared to 20% for residential) has the affect of shifting tax burden to these
classes. Reducing the commercial and
industrial tax ratios is a technique to reverse this tax shift back to the
residential class.
On March 5, 2009 , Regional staff brought forward
a report to the Region’s Finance and Administrative Committee recommending that
the commercial and industrial ratios for 2009 be reduced to offset the tax
increase to those two classes. The Committee referred the report back to the April 9, 2009 committee
meeting and directed regional staff to consult with staff from all lower tier
municipalities. The ratios must be approved by Committee at that meeting as the
provincial deadline to set ratios is April 30th.
Regional staff recommended reducing the
commercial and industrial ratios for two likely
reasons: regional policy to move ratios toward the Ranges of Fairness
where possible; and to provide the best economic climate for business owners. Table
2 (below) shows that York Region already has the lowest tax ratios in the GTA
and a further reduction may not be necessary at this time. No other region in
the GTA, that staff is aware of, is planning to move their ratios this year.
Table 2: 2008 Tax ratios for the
surrounding GTA regions:
|
Broad Property Class |
|
Peel |
Halton |
|
|
|
|
|
|
|
|
|
|
|
|
Residential |
1.0000 |
1.0000 |
1.0000 |
1.0000 |
1.0000 |
1.0000 |
|
Multi-Residential |
1.0000 |
1.7788 |
1.7050 |
2.2619 |
1.8665 |
3.4689 |
|
Commercial |
1.2070 |
1.4098 |
1.2971 |
1.4565 |
1.4500 |
3.5216 |
|
Industrial |
1.3737 |
1.5708 |
1.4700 |
2.3599 |
2.2598 |
3.7412 |
|
Pipelines |
0.9190 |
1.1512 |
0.9239 |
1.0617 |
1.2294 |
1.9236 |
|
Farmland |
0.2500 |
0.2500 |
0.2500 |
0.2000 |
0.2000 |
0.2500 |
|
Managed
Forests |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
0.2500 |
OPTIONS/ DISCUSSION:
The York Region lower tier treasurers met
last week with Regional staff and discussed the region’s report and reached a
consensus that no change to the ratios is necessary for 2009 but the ratios
should be reviewed again in 2010. Next year, a better understanding of the full
data impact of the four year reassessment will be known.
The information required for a complete detailed
analysis is not currently available. The data required for commercial and industrial
billing purposes will not be finalized until
Retaining the ratios at 2008 levels
benefits the residential class while reducing the ratios benefits the
commercial and industrial classes. However, the commercial and industrial classes
not only have the protection of the 4 year phase-in of assessment related
increases (protection also available for residential class), but also continue
to benefit from capping protection as well as opportunities to deduct expenses
from income (protection not available for residential class).
As the current reassessment covers a four
year period, it is recommended that the ratios be reviewed again in 2010 when
the data from the first year of the reassessment (2009) will be fully known and
a better understanding of impacts can be determined.
The funding requirements for the capping of
commercial and industrial properties are pooled across the Region lower tier
municipalities. The Region calculates the proportion to be received or paid by
the lower tier municipalities.
Staff recommends that the 2008 tax ratios for the Region be
retained for 2009 and that the ratios be revisited in 2010.
FINANCIAL
CONSIDERATIONS AND TEMPLATE: (external link)
HUMAN RESOURCES CONSIDERATIONS
Not applicable.
ALIGNMENT WITH STRATEGIC PRIORITIES:
Not applicable.
BUSINESS
UNITS CONSULTED AND AFFECTED:
Not
applicable.
RECOMMENDED
BY: ________________________ ________________________
Barb Cribbett, Treasurer Andy
Taylor, Commissioner of Corporate Services
ATTACHMENTS:
None.
Q:\Finance\SHARED\2009 General Committee Finance\918
2009 Tax Ratios.doc