Pondering Tax Policy Scenario’s

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Further to a SaultOnline.com report Monday night on the long term tax policy for the City.

The report indicated that residential taxes would have to go up if Industrial and Commercial  taxes go down.

Robert Heil, a consultant with the Municipal Tax Advisory Group presented a few scenario’s for the City to ponder.

Scenario 1: Reduction of the Industrial Broad Class Ratio To 2.63;

Scenario 2: Reduction of the Commercial Broad Class Ratio To 1.98;

Scenario 3: Reduction of both Broad Class Ratios To 2.63 and 1.98 respectively.

Scenario 3 Observations: This scenario sees the greatest tax shift to other classes, in particular the Residential and Multi-Residential classes, increasing their 2018 tax level by 8.08% and 16.39% respectively. Both the Commercial and Industrial classes share in each other’s tax redistribution; hence, the reason Scenario 1 and Scenario 2 class tax reductions, tax shifts and percentage share of the total levy differ from Scenario 3.

Both commercial and industrial tax classes would be out of levy restriction meaning the other classes would no longer pick up any of their levy changes due to elimination of the Threshold Restrictions. Over time, the reduction of tax ratios that exceed Provincial Thresholds will systemically occur unless the municipality maintains its levy at Revenue Limit. Reduction of ratios on levy restricted classes occurs where a municipality has an increase in levy (exceeds the Revenue Limit).”

Council did not approve the increase outlined in the aforementioned scenario, nor was the report presented as such. The report was part of an educational session and council received it as information. Council did approve a motion in relation to a recommendation from the city’s treasurer, opting for alternate tax ratios.

Here is a link to that report: http://saultstemarie.ca/Cityweb/media/City-Clerk/Council-Agendas/2018/2018_03_19_AGENDA.pdf?ext=.pdf