Tax hike coming for Vancouverites in 2009

***Yellow Fever*** · December 21st, 2008, 07:38 AM

Tax hike coming for Vancouverites in 2009

By Christina Montgomery
December 18, 2008

Vancouver homeowners can brace for a tax hike of somewhere between six and 13 per cent next year — depending on how successfully staff find way to trim their present budget estimates for 2009.

The initial figures in a staff report tabled Thursday show that an increase of 13 per cent is needed to cover:

• an expected drop in revenues as the economy declines;

• the ongoing shift of the tax burden from businesses to homeowners;

• the cost of 96 new officers and 22 civilian staff for the police department; and

• the annual wage hike for city workers.

Taxes would also rise from 2008 levels to cover money spent this year. The 2007 city strike held the tax rate down for this year, but spending will continue next year without any such savings to soften the blow, the staff report notes.

But it also says that staff hope to cut the 13-per-cent hike to between six and seven per cent through budget adjustments that won’t affect services.

If council still isn’t happy with a six or seven-per-cent hike, it can make further cuts — but they’ll require the city to make reduce staff or service, the report says.

The debate on what to trim will be held in the new year.

But the question of how heavily last term’s NPA-dominated council raised homeowners’ taxes was in hot dispute yesterday.

During the November campaign, NPA, COPE and Vision Vancouver candidates dished out wildly different figures on how much taxes had been increased.

Yesterday, under questioning from COPE Coun. David Cadman, staff confirmed that homeowners had been dealt an 18.78-per-cent tax hike in the past three years.

Because of the move to shift taxes by one per cent a year for five years from businesses to residential homeowners, businesses faces a 1.46-per-cent tax hike in the same three years, according to Annette Klein, director of budget services.

The general tax increase was 9.5 per cent over three years, Klein said.

But under questioning from Vision Vancouver Coun. Raymond Louie, Klein noted that the 9.5-per-cent hike didn’t include strike savings, which held the rate down artificially.

Without those savings, the general tax hike would have been closer to 12 per cent over three years, she agreed.

Inflation was about two per cent per year during that period, Louie noted.

cmontgomery@theprovince.com

DrT · December 21st, 2008, 05:18 PM

Ouch!

When taxpayers may be hurting, to increase their taxes is counterproductive to the overall economy.

The pain should be shared by the city, ie., revision of wage hikes negotiated during "good times" and cut backs in those huge public servant salaries recently featured in the Sun.

***Yellow Fever*** · December 21st, 2008, 06:23 PM

More comments from the Province's readers....

julz

December 19, 2008 - 7:32 AM

I am a homeowner, wife, mother and employee. My employee will not give me a raise due to the economic crisis. He has cut my hours. My husband and I also have 2 part time jobs. I am never home because I am trying to provide for my family. I am physically and emotionally tired. I cannot afford to live in this city. Shame on the government for thinking of themselves instead of their people. Due to the economic crisis the Olympics should be cancel and the money dedicated to this should go back to the people of BC. Healthcare and people before Olympics. After the Olympics our cost of living will be even higher. Is there a middle class anymore in BC?

rf

December 19, 2008 - 7:27 AM

It is sickening when you pull up the City of Vancouver salaries on the recent public sector data base. There are hundreds of people at city hall making 100K-200k with fat fully indexed pensions and 37-hour work weeks. I bet half of them get at least 7 weeks holidays when you count there "Flex" days. How come a payroll clerk for a private company makes 55k but you get 90k working for the city. It's out of control. Why don't the white collar city workers take a pay cut instead of hacking staff?

WTF

December 19, 2008 - 12:04 AM

people in this city do nothing but complain but gee...we have the ocean and mountains so life is wonderful. Get your heads out of your fat asses people, this city is not liveable for the average person. You have to be making $100000/yr to have a 'good' lifestyle which means you are putting away a bit of money each month. Some people literally live like paupers in kits or yaletown just to live here?? I'm planning my move outa here. This city is way overated.

Puddytat

December 18, 2008 - 10:37 PM

Just a cpl more years and I am out of here and then they can stick there tax.

DrT · December 21st, 2008, 08:21 PM

All very cogent observations.

IMO, "public servants" should be paid less than equivalent jobs in the private sector, not more, in return for job security and other fringe benefits and the lesser competition they endure.

One of my favorite quotes for all levels of government to keep in mind, as well as overzealous electorates, is:

Quote:

“The power to tax is the power to destroy”
John Marshall quotes (American Founder constitutional law and the Supreme Court of the United States. 1755-1835)

and yes, as some readers have commented, the middle class is getting booted out of the cities by ever rising property taxes.

Franky · December 23rd, 2008, 04:02 AM

That's a poor move when housing prices have started dropping.

Quimby · December 23rd, 2008, 08:15 AM

Though some of the city staff's salaries are quite high to an average person, the savings per property taxpayer by reducing them would be next to nothing. Cities are all going to be in a tough spot with assessments going down in the long run and completely relying on property taxes for revenue will put a big crunch on them and a massive rate increase. Add in the fact that cities can not be in deficit by law, then you are looking at some tough times ahead for all municipal governments.

This is a very good reason to give municipalities a better mix of taxes, though all would be going down, it would give them more flexibility. I have always thought that provincial governments should reduce their take in sales and income taxes and allow the municipalities to move into the tax space created by them. In BC for example, the province could reduce the PST to 5% and allow municipalities to use the 2%.

December 21st, 2008, 07:38 AM	#1
*Yellow Fever* Descendant Of Dragon龍的傳人 Join Date: Jan 2008 Location: City Of Rain 雨之巿 Posts: 19,102 Likes (Received): 1819	Tax hike coming for Vancouverites in 2009 *Tax hike coming for Vancouverites in 2009* By Christina Montgomery December 18, 2008 Vancouver homeowners can brace for a tax hike of somewhere between six and 13 per cent next year — depending on how successfully staff find way to trim their present budget estimates for 2009. The initial figures in a staff report tabled Thursday show that an increase of 13 per cent is needed to cover: • an expected drop in revenues as the economy declines; • the ongoing shift of the tax burden from businesses to homeowners; • the cost of 96 new officers and 22 civilian staff for the police department; and • the annual wage hike for city workers. Taxes would also rise from 2008 levels to cover money spent this year. The 2007 city strike held the tax rate down for this year, but spending will continue next year without any such savings to soften the blow, the staff report notes. But it also says that staff hope to cut the 13-per-cent hike to between six and seven per cent through budget adjustments that won’t affect services. If council still isn’t happy with a six or seven-per-cent hike, it can make further cuts — but they’ll require the city to make reduce staff or service, the report says. The debate on what to trim will be held in the new year. But the question of how heavily last term’s NPA-dominated council raised homeowners’ taxes was in hot dispute yesterday. During the November campaign, NPA, COPE and Vision Vancouver candidates dished out wildly different figures on how much taxes had been increased. Yesterday, under questioning from COPE Coun. David Cadman, staff confirmed that homeowners had been dealt an 18.78-per-cent tax hike in the past three years. Because of the move to shift taxes by one per cent a year for five years from businesses to residential homeowners, businesses faces a 1.46-per-cent tax hike in the same three years, according to Annette Klein, director of budget services. The general tax increase was 9.5 per cent over three years, Klein said. But under questioning from Vision Vancouver Coun. Raymond Louie, Klein noted that the 9.5-per-cent hike didn’t include strike savings, which held the rate down artificially. Without those savings, the general tax hike would have been closer to 12 per cent over three years, she agreed. Inflation was about two per cent per year during that period, Louie noted. cmontgomery@theprovince.com

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December 21st, 2008, 05:18 PM	#2
DrT "The Ignorant Fool" Join Date: Jun 2005 Location: JAX,MCO,YVR,YYZ,SRQ Posts: 2,595 Likes (Received): 1	Ouch! When taxpayers may be hurting, to increase their taxes is counterproductive to the overall economy. The pain should be shared by the city, ie., revision of wage hikes negotiated during "good times" and cut backs in those huge public servant salaries recently featured in the Sun.

December 21st, 2008, 06:23 PM	#3
*Yellow Fever* Descendant Of Dragon龍的傳人 Join Date: Jan 2008 Location: City Of Rain 雨之巿 Posts: 19,102 Likes (Received): 1819	More comments from the Province's readers.... julz December 19, 2008 - 7:32 AM I am a homeowner, wife, mother and employee. My employee will not give me a raise due to the economic crisis. He has cut my hours. My husband and I also have 2 part time jobs. I am never home because I am trying to provide for my family. I am physically and emotionally tired. I cannot afford to live in this city. Shame on the government for thinking of themselves instead of their people. Due to the economic crisis the Olympics should be cancel and the money dedicated to this should go back to the people of BC. Healthcare and people before Olympics. After the Olympics our cost of living will be even higher. Is there a middle class anymore in BC? rf December 19, 2008 - 7:27 AM It is sickening when you pull up the City of Vancouver salaries on the recent public sector data base. There are hundreds of people at city hall making 100K-200k with fat fully indexed pensions and 37-hour work weeks. I bet half of them get at least 7 weeks holidays when you count there "Flex" days. How come a payroll clerk for a private company makes 55k but you get 90k working for the city. It's out of control. Why don't the white collar city workers take a pay cut instead of hacking staff? WTF December 19, 2008 - 12:04 AM people in this city do nothing but complain but gee...we have the ocean and mountains so life is wonderful. Get your heads out of your fat asses people, this city is not liveable for the average person. You have to be making $100000/yr to have a 'good' lifestyle which means you are putting away a bit of money each month. Some people literally live like paupers in kits or yaletown just to live here?? I'm planning my move outa here. This city is way overated. Puddytat December 18, 2008 - 10:37 PM Just a cpl more years and I am out of here and then they can stick there tax.

December 23rd, 2008, 04:02 AM	#5
Franky Registered User Join Date: Nov 2005 Location: Surrey, BC Posts: 266 Likes (Received): 0	That's a poor move when housing prices have started dropping.

December 23rd, 2008, 08:15 AM	#6
Quimby BANNED Join Date: Jun 2008 Location: Kamloops Posts: 363 Likes (Received): 0	Though some of the city staff's salaries are quite high to an average person, the savings per property taxpayer by reducing them would be next to nothing. Cities are all going to be in a tough spot with assessments going down in the long run and completely relying on property taxes for revenue will put a big crunch on them and a massive rate increase. Add in the fact that cities can not be in deficit by law, then you are looking at some tough times ahead for all municipal governments. This is a very good reason to give municipalities a better mix of taxes, though all would be going down, it would give them more flexibility. I have always thought that provincial governments should reduce their take in sales and income taxes and allow the municipalities to move into the tax space created by them. In BC for example, the province could reduce the PST to 5% and allow municipalities to use the 2%.