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HomeMy WebLinkAboutTR-51-93 THE CORPORATION OF THE TOWN OF NEWCASTLE REPORT Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE File # o Date: June 7, 1993 Res. By-Law# Report#:__TR-5 1-9 3 - File#: Subject: PROPERTY TAX WORKING GROUP REPORT - COMMENTS Recommendations: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-51-93 be received for information. 2 . That report TR-51-93 be forwarded to the Fair Tax Commission in response to their request for comments, on the draft report. 3 . That the Fair Tax Commission be requested to prioritize the issues and allow municipalities further opportunities for input in advance of implementation of any of the recommendations identified in the report. BACKGROUND & COMMENTS 1.0 The Working Group Mandate The Property Tax Working Group was established by the Provincial Treasurer in September 1991 to report to the Ministry of Finance on it's findings after having examined the issue of "Fair Tax" . The following questions were posed to the 49-member working group: 1. IS THE CURRENT PROPERTY TAX SYSTEM CAPABLE OF MEETING THE REVENUE REQUIREMENTS ASSOCIATED WITH LOCAL GOVERNMENTS' AND SCHOOL BOARDS' PROGRAM DELIVERY RESPONSIBILITIES WHILE IMPOSING A FAIR TAX BURDEN ON PROPERTY OWNERS? 2. IF NOT, WHAT CHANGES SHOULD BE MADE TO THE PROPERTY TAX SYSTEM AND /OR OTHER FUNDING SOURCES FOR LOCAL GOVERNMENTS AND /OR SCHOOL BOARDS TO IMPROVE FAIRNESS IN THEIR REVENUE RAISING REQUIREMENTS?. TR-51-93 Page 2 2 .0 The Draft Report The working group produced a draft report containing 49 recommendations regarding taxation. These recommendations are summarized with Staff comments on the attached Schedule A. 2 . 1 The report put forward two general lines of argument that were thought to underlie much of the public concern about property taxes. One suggests that services such as education and general welfare assistance that serve broad provincial public policy objectives should not be funded from property taxes but should be related to ability-to-pay. The second argument suggests that it is not fair to charge property taxes for services that may not be made use of by some people and instead property tax should be more of a user based fee for service. 2 .2 The working group also produced a discussion paper on the same topic. Some statistical information from this document and the draft report are identified in Schedule B attached to this report. The working group's report is in draft form and the comments solicited from all sectors should produce some productive initiatives regarding taxation. Staff will keep Council informed as final documents are released. 2 . 3 The Working Group Draft report presents many good ideas, however some appear to Staff to be somewhat idealistic . In many cases implementation strategies and action plans have not been elaborated on. Because taxation of all forms are such fundamentally entrenched mechanisms, changes to the process are met with scepticism and resistance. A good example of which is the market value assessment. The report also contains recommendations with some directions that appear to be in conflict with the Provincial disentanglement initiative. Staff anticipate that these conflicts and workable action plans will be addressed in the final reports by the Working Group. 2 .4 Staff has three major concerns with the recommendations and the report in general. Firstly there appear to be a significant number of "Teams" or "Studies" recommended which may ultimately be very costly and will extend the time to resolve many of the issues raised. Secondly, the report does not identify what are considered to be priority recommendations or strategies which may be acted upon immediately. Finally the report appears to be Provincially slanted and some of the recommendations may ultimately strengthen Provincial control on issues which have historically been more so under Municipal direction. 3.0 The Report contains many areas of focus, and the following are some points relating to those issues which are thought to be key to the focus of the report: TR-51-93 Page 3 1. ASSESSMENT: as a basis for taxation is not based on ability to pay. • The assessed value of property is a regressive indicator of wealth, and it is a single standard which is applied in practice differently to the same types of properties. • Market value assessment is not necessarily a superior system of assessment for residential property. • A study of market value compared to other systems based on the physical characteristics of property should be undertaken by the F.T.C. • Assessment reform by itself will not improve the fairness of the property tax in relation to the ability to pay. • The F.T.C. concluded that there should be consistent assessment systems for residential and commercial and industrial property across the province. • The assessment of special properties such as railway and hydro rights of way be changed to fixed rates based on physical measurement. 2. PROPERTY TAR: is a regressive tax (the proportion of income devoted to property tax decreases as income increases) and it is not based on ability to pay. • Ontario's dependence on the property tax as a source of revenue for education and social services programs should be reduced. • Property taxes are the largest source of funding for local governments and they are the second largest tax paid by individuals in Ontario - first is personal income tax. 3. EDUCATION: is the largest proportion of the property tax bill. • Recommended that the provincial share of funding of education be increased to reduce the dependence on the property tax. • Recommended a new system for determining provincial equalization grants for education. • Grants would be allocated as follows: * for Commercial and industrial all grants should be for equalizing taxes for provincially mandated programs . * for residential taxpayers, grants would be aimed at equalizing the average household income impact of taxes to support provincially mandated programs . - 4 TR-51-93 Page 4 4. ECONOMIC DEvELOPmENT: " bonus ing " 0 Conclusion that local governments should not be permitted to provide tax abatements as incentives for economic development because of concerns such as non-accountability once imposed, unfairness to existing industries, reduction in levels of service similar to the U.S.A. • Recommendation that restrictions on bonusing be loosened to permit the provincial government and local governments to work together on innovative approaches to public/private partnerships. 4.0 The Discussion Paper The discussion paper was produced by the Fair Tax Commission, and was published in December 1992 . Comments on the reports are requested by June 30, 1993 . The paper focuses on the same issues and provides an overview on these issues, ie. taxation in more generalized approach. Some interesting statistics represented in graph form produced by the report are highlighted in the attachments labelled Schedule C for the information of Council. 5.0 Conclusion 5. 1 The report has raised a significant number of critical areas that could contain answers to the question of fairness in taxation and also identify some important ideas for investigation with respect to providing alternative funding sources to municipalities. 5.2 The opportunity to have valid input prior to the implementation of any changes to the current tax system is crucial to the future of municipalities in general. As a result Staff feel it would be beneficial to request that the Fair Tax Commission summarize all comments received and prioritize the recommendations. At that point, together with concrete proposed action plans the municipalities should be given further opportunity to comment and advise as appropriate. Respectfully submitted, Recommended for presentation to the Committee Ma ie A. Marano H.BSc. ,A.M.C.T. Lawrence E. o, 4g f Treasurer Chief Administrative Officer MAM/NT/ges Attachments: Schedule A Schedule B Schedule C 4 % X- ........... ................................................ ........ ........... X................. ... ... ...... UU.. N.U. ....................... :XXXXXXXXXXXXX ........I........... M . .. ............... 0: .................. E. WOR*KIN...........*'..-*.....*'.,- .' :QN: ................. ....... ................... ........ WMM --N,-Vi . ... ...... . ...R P R. P PROP ...................... 1 Assessment and Taxation: The provincial government should continue to be responsible for assessment This is contrary to provincial disentanglement suggested throughout Ontario. There should be one consistent, equitable province-wide disposition of assessment. It may be appropriate for municipalities assessment system. to control assessment but only if the transfer of responsibility is at a level of technologized sophistication satisfactory to Taxation should be a responsibility of local government subject to clear provincial municipalities. One assessment system for both Residential and guidelines. Commercial may be difficult to sell- ie. the Commercial/Business enterprises have greater capacity to generate revenue and therefore is this proposed change in keeping with the "ability to pay" approach to "fair tax"? 2 Taxation Policy Flexibility for Local Governments: Local governments should be permitted to exercise policy discretion with respect to the May be difficult to get consensus from local governments on what relationship between tax rates on different classes of property. The provincial rates should be applied. Also the role of the Region is not government would define classes and the limits of"bands" within which the specified in this scenario. Numerous classes adds complexity and relationships between tax rates on the classes of property would be permitted to vary. may create problems in categorization between various classes. (ie. local permission to vary the relationship between commercial and industrial tax rates from low commercial rates at 80% of industrial rate to a high of 1205/6) 'Local governments would be permitted to set mill rate relationships within those bands. Still very strong suggestion of control over entire process by the The same mill rate relationship should apply to both education and municipal taxes. province. If the province defines classes and limits of bands, they are in effect dictating local tax policy to a substantial degree. 3 Local Exemption Policy: Local government should not have any discretionary power to exempt property from Agree with the report, that municipalities should have a voice in taxation but should have the power to provide grants to certain entities and under decisions which remove taxable assessments from their tax rolls, certain circumstances. however, if province retains exemption rights exclusively erosion to the tax base may be made by this avenue. co 4 Provincial Exemption Policy: a Exemption policies should be determined at the provincial level and incorporated into Strong provincial control suggested. Municipal input should be rt provincial legislation. solicited as a minimum to ensure appropriate safeguarding of 0 municipal interests. (D 0 Exemption policies should be reviewed on a regular basis by a provincially appointed Creating more committees may be moving in a direction opposite rt Exemptions Committee. The committee should include representative of all local to the stream lining approach of disentanglement. If members are governments including school boards. provincially appointed, then this gives the province added control L—n over exemptions. Also, there is no indication of the extent of powers that will be given to the Exemptions Committee (ie. can they change decisions made by province.) Nx: . . ... ................. . . . ....... ...... .............. . ................ ..... ... .. .. ............... ......... X EOI ........... :XX , - 0 PER W., 0, ............... .. .... 5 Criteria for Exemption: Exemptions should be attached to the use of a property rather than to the owner or the Agree that this is an important deterrent to abuse of priority status property. Criteria for exemption for charitable organizations other than churches and regarding blanket exemptions. This definition should be specific cemeteries, should require that such organizations be non-profit, offering a service that so as to restrict and limit the types of inappropriate organizations is available to all members of the public, organized to provide some clear social eligible for exemption. benefit, able to meet a means test; and recognized by Revenue Canada as a charitable institution. This is a very significant recommendation but little comment or Public Utilities should be taxable. discussion is provided on the issue. There is no elaboration on the extent of public utilities - ie. Hydro Commission and Transit Systems are both Public Utilities. 6 Payments in Lieu of Taxes by Provincial and Federal Government: Both federal and provincial governments should make full payment in lieu of taxes on This may be beneficial to the municipalities, however, if"banding" an assessment/mill rate basis. is set by province, this may affect the final value of payment of grants in lieu. The Grant Formula for school boards support should be revised to maintain the overall Agree with this suggestion but it appears to be contrary to the transfer payments at the existing levels. current direction of the Province regarding all transfer payments 7 Assessment Principles: Assessments should be done uniformly across the province using a common set of This seems similar to the "regionalization" and market value principles. approach of the province. Assessment is also used by province to determine appropriate transfer payments -therefore if it is not Assessment should be based on a fair and consistent method of evaluation. accurately or consistently submitted by municipalities, if they were given this responsibility, it could result in the province using alternative funding allocation methods. This could be difficult to resolve or may still prove difficult to implement particularly for remote, small northern Towns. Details of alternatives in Attachment #2. Assessments should be updated regularly. How often is "regularly". This could be a costly and never ending process that would add constant confusion. 8 Further review of Alternatives to Market Value Assessment: Undertake a further study of assessment systems including ones based on the physical This may be a reasonable way to amend many of the outdated characteristics of property as an alternative to market value as the basis for an assessment value bases used now, and therefore may be assessment system. beneficial to municipalities. ti as (D N 0 h-h «< :..:......R. ... iT1'TA?E.1NCE iCI G.. ROUP..Ft iCOE1il.[�[� D�TE�i3.................................................................. ........ ........0 1=I . . ...C��i..I �CE31�E11�1 b ........... . . .. .... .... u............ ELI ATi QN ......................................................... 9 Residential Assessment: All residential properties, including single-family residential properties, condominium Agree that this appears to be a reasonable recommendation. residential properties and rental residential properties should be assessed at fair and consistent values. 10 Residential Tax Relief: Any tax relief provided to residential property owners or occupants should be made No comment - no direct municipal impact. through either tax reductions or rebates on an individual applicant basis. 11 Property Tax Credits: The provincial government should maintain the current property tax credits given to No comment. individuals with modest and low incomes to help lighten their property tax burdens. 12 Phase-In: Appropriate phase-in mechanisms should be provided to assist residential property No length of time is indicated as appropriate for phase-in. (little owners and tenants when all properties are assessed at their fair and consistent value. concrete direction) 13 Property Tax and Tenants: Amend Rent Control Act for the allocation of taxes to be consistent with the Consistency in appropriate legislation is recommended. Assessment Act. Amendments, possibly a good source of revenue, but may be L�a administrative and collection problems. A permanent mechanism for the pass-through of tax reductions to tenants, integrated with the relevant provisions of rent control, should be developed and incorporated into Who will ensure that the tax reductions are passed on to tenants? the relevant provincial legislation. (ie. may be difficult to enforce) 14 & 15 Recreational and Recreational Trailers: Recreational properties and trailers should be assessed and eligible for full property Cottages &trailers may not receive all services that others receive taxation. - therefore is this "fair", but perhaps no more so than seniors paying for school taxes. There may be collection problems for taxes on recreational trailers. Should be further explored. 16 & 17 Assessment of Commercial & Industrial Property: All commercial and industrial properties should be assessed at their fair and consistent Need further definition or direction on terms "fair" and 'consistent" value. and the extent of application. 18 Exemptions from Industrial Assessment: The exemption of machinery and equipment should be specified and categories of This would have to be very specific and could lead to many machinery and equipment eligible for the exemption should be set out in regulations disagreements and discrepancies (especially if the unit value under the Assessment Act. assessment system is adopted.) Possibly could lead to lower overall assessment in mining communities. 0 .IR'#?�..fiAX.yVO. loll X.R. ..G.. 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ATtfJNS.................... 19 Assessment of Underground Mining Operations: The current assessment treatment of underground mining operations should be No Comment- not applicable to our municipality. retained. 20 Sharing of Tax Revenues from Mining: A protocol should be developed by the provincial government, the federal government, No comment. municipalities and mining companies for existing and future mining operations with respect to the sharing of all mining taxes. 21 Assessment of Special Properties Based on Physical Measurement Rather the Value: Statutory rates should be used for the valuation of roadways, rights of way, hydro Appears to be a reasonable recommendation leading to a fairer -_`rights-of-way and railway rights-of-way. These statutory rates should be updated on a taxation of these properties. The potential impact on municipal v-regular basis. revenue would vary depending on abutting land but rates should - be consistent. 22 Revenue from Special Property Taxation in Unorganized Areas: The taxes collected in unorganized areas from railway and hydro rights-of-way, No comment. generating stations and pipelines should be turned over to the appropriate local services boards, school boards, local roads boards, statutory labour boards and other local authorities to assist in funding local services. 23 Telecommunication Property: The current assessment and taxation method for telecommunications company No comment. property should be retained. 24 Telecommunications Tax: In place of the current 5% tax rate on company gross receipts, a provincial No indication of what tax rate or base that may be used therefore telecommunications tax on all telecommunications services including cable television cannot assess impact on Municipality. Good potential for and services competitive with the telephone system should be introduced based on increasing revenues. Suggests that whatever rate is applied be direct subscriber billing. updated regularly. Specific allocation should be made to municipalities and school boards. Municipality should have opportunity to comment further on allocation if this becomes a reality. ro w 00 0 i-n PR' '...............' 1110:=: ::»><> >:::>:::»»:>:>:>: : ::;:::<:<:<> >:>:»>>:: ::::>:>:::>::::::>:><>s >»»> >< >»>»'< >» » y«><»'`` y< > ;.> >:;:<::>:::><>::»>;:;<: <<>:<:: >:::»>.;```>:>.;:>:::«:<::::>:; ::<:<> '. >>< < <<> < > ><«? < <> >> ..<:>::>::>:::: 1G..GROUP..FRO© M.11[I= IDA' 101 ........................:::::::.::.:....... ............ ..............:CC3 ( I_N::. ::.�J>!J:.1= . ix 25 Assessment and Taxation of Farm Property: All farmlands should continue to be assessed at fair and consistent values. Farm Tax Again may be good depending on the definition of fair, and Rebate Program should be retained. ultimate assessment changes. Sale of historical farmland for uses other than bonafide farm uses should look at a method to claw A study group is suggested which would review farm assessment. back some of rebate from sale proceeds. More study groups - cost increases. 26 Business Occupancy Tax: A study should be done of the economic impact of various alternative to the business Agree that this tax bears no relationship to health or level of tax as a source of revenue from business activity. Ways of replacing any lost revenues activity of the business. Recommends yet further studies. Agree for local government should be studied. that this should be explored further. 27 Commercial Concentration Tax: Should be abolished and alternative approaches developed for the funding of Agree that this tax should be abolished but finding an alternative infrastructure. funding source is a major problem. Agree that it is not fair for the GTA to fund infrastructure costs while general revenue support the balance of province. 28 The Provincial Land Tax in Unorganized Areas: Where local government organization is possible, the Provincial Land Tax should be No comment. replaced by appropriate local taxation. Where this is not possible or appropriate, the Provincial Land Tax should be set at a level designed to eliminate any incentive to locate in unorganized territory on the fringes of organized communities. 29 Infrastructure Financing: The provincial government and municipalities should be encouraged to consider Agree that public- private sector partnerships should be explored innovative urban development standards that can achieve desired infrastructure as a priority and this avenue has potential for infrastructure objectives at reduced cost and to review carefully the need for, and value of, stringent support to municipalities. standards currently applied to many new developments at significant cost to the eventual residents in those developments. Federal and provincial governments should be encouraged to increase funding levels How does a local government "encourage or ensure" increased d for significant infrastructure projects. funding from other levels of government? 0 rt, ........... ....................... ............................... .......... ...................... ....................... .................. ........................ ........ .... .... . E .0 ....................... EN : ... ' Mr. ER* *X1............. ,.Rpp T N 0 MENT$ ............ �i 1,1111 30 User Fees for Environmental Services: Fees should be charged to raise revenue to help modify behaviour: ie garbage This suggestion may be a good source of revenue while at the collection levy to decrease waste. same time ensuring overall cost reduction. This suggestion should be given priority ranking for further investigation for Water and sewer services should be charged based on true cost of providing the implementation. services. 31 Tax Mix: Ontario's dependence on the property tax as a source of revenue for education and Agree with this comment however, provincial grant system for social services programs should be reduced. transfer payments seems to be continually reducing without an trade-off to the province for costs. 32 G.W.A.: Should be borne by province. Consistent with disentanglement. 33 Property Tax Credit: The property tax credit should be revised to link credit base ("occupancy cost" in the No comment -tied to personal income tax system. current system) directly to property taxes actually paid, including apportionment of property taxes paid on rental property on behalf of tenants, and to link the timing payments to the timing of property tax obligations. Agree that it may be more "fair"to be based on ability to pay Property tax credits should not be dependent on the age of the applicant. rather than strictly age. 34 Local Property Tax Relief: The Disabled and Seniors in the Community Program, and the Municipal Elderly No comment. -- Residents Assistance Act should be continued. _,35 Education Funding: Should be a shared responsibility between province and local school boards. Agree that some review of the current system is necessary as the province is continually reducing funding which ultimately falls to Provincial government either increase funding or re-evaluate number of mandated the taxpayer, however, maybe the focus should be on joint-board programs. projects and pooling of resources with local governments. This could lead to reduced capital and operating costs for Boards and Technical transition team be established to prepare and coordinate impact studies on Municipalities. (D the revenue changes proposed. Setting up further studies and teams will also have a price tag ON attached. 0 rn 36 Provincial and Local Responsibilities: The provincial government must provide for full funding of those services it mandates. No comment - provincial initiatives, however saying that every person has "equal access" has cost implications. AX.1�VO1l I#�G:.�R�U�..FtECC�I�I.I�IE�►€f�l�Tll`7�.. ..... . Gfl . 1=N:.. .ON::i1=tom ...............:... ...................................... . 111A :l ::::::........:::::::::::::..:::::::::::::.. . . An M.. :. :::..:.::::::::::::::::::::::::::::::..::::. ................................................... ............ .................................. 5......................................................... 37 Sharing Responsibility: Although property taxes are paid to municipalities and school boards, both provincial Education of all taxpayers is a difficult process and may be costly. and federal laws and policies actually determine a significant portion of the bill. To Also it is critical to municipal sustainability that the province and improve accountability and clarify responsibilities, this must be acknowledged and Federal Government not have more control over the property tax explained clearly to local property taxpayers. system. This would erode the municipal accountability. 38 Income, Sales and Payroll Taxes: Local governments should not be given the power to enact local income, sales or Agree. payroll taxes. 39 Hotel and Motel Taxes: Local governments should not be given the power to enact local taxes on hotels and No comment. motels. 40 Poll Taxes: Poll taxes are not acceptable on equity grounds as an alternative revenue source for May be appropriate for infrastructure support; ie. 407, where there 'local government. is also an alternative available. This would then be a more user based approach. 41 Which Local Government Should Exercise Taxing Powers: School boards should not have the power to levy taxes, or participate in assessment or This may prove to give more accountability but in fact would tax collection, except in regions of Ontario where the school board is the tax collecting create much duplication. Currently the Town tax bill does identify authority the tax split clearly. -in order to make the tax system more accountable, information in the tax bills should clearly set out who is responsible for how much of which tax. 42 Tax Abatements for Economic Development: Local governments should not be permitted to offer property tax abatements for The potential for amending legislation with the focus on attracting economic development. economic development is positive and should be explored further. This should also be identified as a priority for future investigation. Provincial restrictions on bonusing should be loosened to permit a co-operative ,.ti approach to be developed by local governments and the province that would permit w municipalities to take advantage of community economic development instruments such as community development bonds. V 0 ... A. ►± :..................................: .. :::..cam . > .. :::eta.>.. ............................................ ... ... ...... ....... IaAriOIS............ .......................................................... . .. .... ............. ...........:.::............................... ...... 43 Local Governance: The provincial government should institute a comprehensive review of the structure and Care must be taken to ensure we are not allowing for direct effectiveness of our institutions of local government. provincial government involvement or interference in the operations and activities of local government. There are many duplications and economies of scale that could be achieved by cooperation of activities. 44 New Legislative Framework for Assessment and Local Taxation in Ontario: Agree, once all details of any new assessment system is Assessment Act should be rewritten to reflect current terminology and technology. complete. 45 Building Public Understanding of the Property Tax System: The Ministry of Revenue should strengthen it's public information activities by: Improved communication with taxpayers about the assessment publishing a handbook on residential assessment appeals, publishing a short menu of process may clarify the responsibilities of the various parties to the .assessment services, and establishing the position of taxpayer"ombudsman" in each public and therefore reduce misunderstandings. regional assessment office to handle public enquiries and complaints which go beyond 'requests for information. 46 Assessment Reform in The Interim: Ministry of Revenue should consult with AMO and school board associations to If this is an interim measure, it may reach conclusions which may develop a schedule of services and fees for reassessment services and procedures for be in conflict with the final recommendations of the assessment assessment reform. reform. It may be costly to pursue and is therefore questionable, —7) , however, AMO and all municipalities should continue to be consulted throughout the process. 47 Assessment Appeals: All issues with respect to assessment should be reviewed by the Assessment Review This will clarify appeal process and help prevent backlogs in the Board and all appeals should be heard by a new Assessment Appeal Board. These appeal procedures. Boards should be required to schedule a hearing within one year of the filing of a complaint or appeal and to render their decision within 90 days following the hearing. ro w o� 00 0 rn fG..taRUP.:.REC014r1. E.. :......................... fCA''I ..............................................;..:.::::.:...................C} EJ. . ..J1..iECflC ...................:.::...................................................:. :.::.:.............................................................................:.. ..:...: :.................I ..... ....`(5........................... t1.ENt?�4'ft7hl ...........:............................................. ............ 48 Criteria for Transitional Arrangements: IT IS RECOMMENDED: That local government financial reform must be as comprehensive as possible, both to This comprehensive approach rather than piece meal is a much ensure that the dislocation is worthwhile and to maximize the opportunities for impacts more logical approach in gaining acceptance from public. to offset each other. That transition must take place over a defined period of time (three years of five years, A defined time period results in greater clarity and easier for example) rather than being linked to some event such as the sale of individual implementation. properties. That to the extent that the costs of transition are not managed by phasing in gains and This results in fairer allocation of tax burden relating to costs of losses at the same rate, they must be carried by the entire tax base and not by any implementation. particular class of property (in the case of tax reform) or local government (in the case of grants reform). That the same transitional measures must apply to all classes of property. This will be perceived as fairer and clearer than if only selected classes affected. Lr: ro w 0 rt, Schedule B to Report TR-51-93 TAXATION - STATISTICS 0 1990 tax structure for all property tax revenue in the province was as follows: 57% Residential Property Tax 26% Commercial Tax 11% Business Occupancy Tax 4% Payments in Lieu of Taxes 2% Telephone & Telegraph receipts for property rights of way • Property taxes as an approximate percentage of total revenue requirements: Municipalities raise 38% of their revenue through tax School Board raise 53% of their revenue through tax 0 Residential taxes as a percentage of household income: 1969 = 5% 1977 = 3% 1990 = 3.5% • Residential property taxes for social assistance benefits vary as a proportion of household income from a high of $1.62 per $1,000 of household income to a low of $0. 10 per $1,000; 1990 GWA support - Wellington County $1. 62 / 1000 household income - Durham Region 0.54 - Peterborough County 0 .23 - Simcoe County 0. 15 - Perth County 0 . 10 In Peterborough County, lower tier municipalities are responsible for social assistance. i Schedule C to Report TR-51-93 Page 1 of 2 FIGURE 11 WHERE OUR TAX DOLLARS GO: MAJOR PROVINCIAL AND LOCAL EXPENDITURES IN ONTARIO, 1991-92 Health Care 24% Older Interest on Provincial 3% fir•. Debt 6% General Government t 8 6% Education 24% Recreation and Culture ;�•;«,• 3% �- Justice and Protection 6% Economic 3 Development Social Services 3% 5% Infrastructure Social Asst.&Benefits 13% 7% Source: Public Accounts of Ontario 1991-92; and Ministry of Municipal At fairs,•Municipal Financial Information, 1991 (forthcoming). Note:Numbers compiled by combining provincial,municipal and school board expenditures and netting out transfers from the province to local governments and school boards. FIGURE 14 WHO PAYS THE PROPERTY TAX IN ONTARIO, 1990 Payments in Ueu 4% $0.5 8101on Comm./Ind. 26% $3.2 Billion Bus. Sector Homeowners 46% Total 39% $5,561111on $4.8 Billion Res. Sector Total 57% $7.OBillion Telephone & Telegraph 2% $0.2 Billion Occupancy Tax 11% / $1.4 Billion I Tenants 11% $1.5 Billion Source: Ministry of Municipal Affairs, Municipal Analysis and Retrieval System(MARS). Schedule C to Report TR-51-93 Page 2 of 2 FIGURE 1 SHARES OF TAX REVENUE FROM MAJOR TAXES: ONTARIO, 1991-92 Personal income Tax 31% OlherTax Revenue 1% Non-Residential Property Retail Sales Tax Taxes(fiscal) 17% 12% Residential Prope C orporations Tax rty 7%Taxes(fiscap Employer Health Gas,Fuel,Tobacco Ta)t/OHIP &Alcohol Taxes 6% 9% Source:Public Accounts of Ontario, 1991-92;Ministry of Municipal Affairs. Note:All data(including property tax revenues)are for the fiscal year. FIGURE 2 SHARES OF TAX REVENUE FROM MAJOR TAXES: ONTARIO, 1971-72 Personal IncomeTax Other Tax 20% Revenue 3% a, � • a; Retail Sales Tax Non-Residential 15% Property Tax (fiscal) 13% Corporations Tax 9% Residential Property Tax (fiscal) Employer Health 19% Tax/OHIP Gas, Fuel,Tobacco 6% & Alcohol Taxes 15% Source: Public Accounts of Ontario, 1971-72; Ministry of Municipal Affairs. Note:All data(including property tax revenues)are for the fiscal year. I l f f