Impact Study hits Tiny Residents hard!
By John Grant – Addison Beach
Predicted results became fact as the Impact Study for Simcoe County’s Market Value Reassessment (1992 base) was released August 15th, 1995.
Residential property owners learned that their taxes would skyrocket under the proposed system, if adopted, while farms, commercial and industrial would be favoured and pay much less than under the current system.
FULL MVA BAD NEWS FOR HOMEOWNERS
According to the study, if 1995 tax bills had been levied using Full MVA, the following AVERAGE tax increases and decreases would have been experienced:
Average Tax Changes – listed by property classification
County Average Tiny Average
Residential 15.7% Increase 31.0% Increase (1 to 6 units) Residential 16.0% Decrease 8.3% Decrease (multiple units) Commercial 18.6% Decrease 41.5% Decrease
Farms 30.5% Decrease 45.0% Decrease
Industrial 37.7% Decrease 48.1% Decrease
All Properties 0.0% 23.0% Increase
“SCRAM” LEADS COUNTYWIDE FIGHT TO DEFEAT MVA
A major county-wide residents’ group, Simcoe County Residents Against Market Value Reassessment (SCRAM) has mobilized opposition to fight MVA proposals. (see article on page 4). SCRAM’s concerns are that:
• the huge increases in taxation upon residential properties will bear little or no relation to the residents’ effective ability to pay and will place an intolerable burden on some residents (those on fixed incomes such as retirees and modest income property owners) based on fluctuating market prices (prices which homeowners cannot or wish not to realize). • property taxes should be levied in proportion to services received not upon market value. SCRAM points out that many seasonal or cottage residents receive no service for their education tax dollar.(# • the Ontario Government’s Fair Tax Commission, which reported to the province in 1992, suggested that education taxes should be shifted from municipal property taxes to the provincial level. Premier Harris’ new government has promised to look at property tax reform and this should happen before county-wide reassessment is considered. • local municipalities will lose control over their taxing power if the county-wide assessment system should be adopted because it would bring with it “automatic reassessment every 4 years forever” and it would be under provincial government control.
RESIDENTIAL CLASS HAMMERED BY FULL MVA
Comparing average Residential (1-6 units) tax increases amongst various municipalities revealed startling differences.
Barrie would have had 3.2% increase, the big winner.
Whereas other municipalities would have been rocked with substantial Residential tax increases and 11 municipalities would have received increases above the 16% county average increase …
Average Increases for Residential Class (those above the 16% County average) Tiny increase 31.0% Rama increase 30.8% Orillia increase 28.5% Midland increase 27.8% Penetang increase 26.6% Collingwood increase 26.5% Clearview increase 24.7% Severn increase 19.5% Adjala-Tosorontio increase 17.7% Oro-Medonte increase 16.3% New Tecumseth increase 16.1%
The above figures are averages for the residential property classification. Individual properties could see much more dramatic shifts. In TINY TOWNSHIP, some residential properties would see their taxes more than double.
Keep in mind that the study was based on redistributing the taxes that were levied in 1995. In future years, as provincial grants and subsidies to the local and regional levels of government fall significantly, these grant revenues will have to be replaced by major tax hikes, by service cuts or both. Thus, the effect of moving to Full MVA could be considerably more taxing than the above quoted percentages suggest.
THE CURRENT SITUATION Currently, the value at which a property is assessed depends on the municipality. In most localities, including Tiny, each property class is weighted differently (pays a different mill rate). But some municipalities (e.g. Wasaga, Tay, Oro) levy the same mill rate on each property, no matter whether it is residential, farm, commercial or industrial. However, the municipalities rely upon valuation surveys which were done at different times. In Tiny and Penetanguishene, for instance, assessments are based on 1980 market values, in Adjala and Collingwood 1975 values, and in Barrie, Flos and Tay, 1984 values.
Under the proposed new “Full MVA” system, every property in the county would be assessed on the same basis, namely, at its market value in 1992. The assessment would automatically be updated every four years, and each property would pay the same county, education and local taxes in proportion to its assessment, although the local levy would differ depending on the mill rate determined by the particular municipality.
FACTORIZED MVA … THE BLOW IS LIGHTER, BUT ... It still hurts. Correctly anticipating that there could be stiff opposition to the dramatic changes envisaged under the Full MVA proposal, the Provincial Assessment Branch prepared a second impact study, based on a sort of halfway house called Factorized MVA. In this system, properties would still be assessed at their 1992 market values, but each of the major property classes (except farms) would be given a weighting factor to ensure that its total 1995 taxes would not have changed materially. Within each class, taxes would be redistributed as for Full MVA, but not between classes.
RESIDENTIAL PROPERTY (1-6 units) Under Full MVA Average countywide property tax increase 15.7% (from 31% in Tiny to 3.2% in Barrie) Under Factorized MVA Average countywide property tax increase 2.9% (from 18.8% in Tiny to 11% in Barrie)
INDUSTRIAL PROPERTY Under Full MVA Average county-wide property tax decrease -37.7% (down -64.5% in Penetang and down -48.1% in Tiny but up 37.8% in Innisfil) Under Factorized MVA Average county-wide property tax decrease -0.9% (down -42.5% in Penetang and down -13.3% in Tiny but up 128% in Innisfil)
COMMERCIAL PROPERTY Under Full MVA Average countywide property tax decrease -18.6% (down -41.5% in Tiny and down -4.3% in Penetang but up 24.6% in Adjala) Under Factorized MVA Average county-wide property tax increase 0.9% (down -24.3 in Tiny but up 20.2% in Penetang and up 60.8% in Adjala)
FARM PROPERTY Under Full MVA Average countywide property tax decrease -31.0% (from -45.0% in Tiny to -13.7% in Essa) Under Factorized MVA Average county-wide property tax decrease -37.3% (from -50.3% in Tiny to -22.2% in Essa)
Note: To the Tiny taxpayer – In Tiny there are a total of 421 Farm properties, 11,006 Residential properties and 7 multi-Residential (apts) properties. Keep in mind that the decrease in Commercial and Industrial taxes is insignificant as a tax revenue source since 85% of our commercial assessment was lost to Midland and Penetanguishene as a result of Restructuring.
THE DECISION…TO BE OR NOT TO BE? For a county-wide MVA assessment system (either Full MVA or Factorized MVA) to be adopted, each municipal council must first decide whether it wishes to request it. If a majority of the 16 municipalities (or 18 if Barrie and Orillia participate) request the change to county-wide MVA… AND… if a majority vote of the Simcoe County Council supports it as well, the request will go forward to the Minister of Finance (Ontario). If it is accepted by the Minister, ALL THE MUNICIPALITIES in the County will be required to use the new system, except for Barrie and Orillia which could opt out.
However, if the proposal is defeated, either by a majority of the municipalities OR at County Council, countywide implementation would not proceed.
In this case, it should not be forgotten that ANY INDIVIDUAL MUNICIPALITY could still request reassessment of its own municipality. By this route, there would not be an automatic reassessment every four years.
