A 59% tax increase in 8 years?!? This can't be true.
Updated: Jul 28, 2022
Well, it is.
Our tax bill is composed of two levies: one controlled by Carling and the other by the Province.
In 2014, the Carling tax rate was $337 per $100,000 of property value while the education tax was $203 per $100,000 of property value. In 2022, those taxes were $536 to Carling and $153 to the Province.
So, on a $500,000 property, the Carling tax went from $1,685 in 2014 to $2,680 this year.
The increase in Carling's rate is apparent when you look at the total municipal tax collected from ratepayers (excluding education taxes): in 2014, $3,450,618 were collected; and this year, the budget calls for $5,750,422 to be collected (mostly through yet another significant rate increase). That is a 68% increase in total taxes collected mostly through Carling's tax rate increases over eight years. Why did the total collected increase by a higher percentage than the Carling tax rate? See below.
How did we not notice this?
Because of smoke and mirrors--from my analysis and research, this is how it happened:
A big part of Carling's 59% tax rate increase was disguised by the 25% decrease in the education tax. They spent our savings from the education tax reduction.
The remainder was disguised by the fact that Carling's tax base expanded from new properties being built and major improvements made to existing properties, which increases the tax base. The amount of additional new tax revenues is not disclosed in Carling's budgets or financial statements; however, the amount appears to be in the range of $100-200,000 more per year or about 2.8 to 5% of the total taxes collected. So, they spent this new revenue as well. It could have been used to reduce the taxes on existing properties (i.e., your own).
Here's the kicker: whereas our total combined tax bills, including the education levy, seemed only to increase about 2.75% per year over the eight years, our Council was actually increasing their tax rate by about 7.4% a year! We could have been receiving tax reductions from the 25% decrease in the education levy and the 5% new tax revenue on new properties.
Where did it all go?
I have been looking at this, but it is difficult to find without the full cooperation of the CAO. In 2016, we saw a change in the allocation of OPP costs, but that only accounted for about a 2% increase in that year.
An astute Carling resident, Dr. Alves, at the most recent budget meeting pointed out a more significant source of tax increases: reserves are too high. He mentioned some bench-marking he had done against some other municipalities or an industry database (not sure which) and stated that our reserves are much too high. In the meeting, he asked that Council start to return those to the ratepayers but got nowhere.
Some reserves are mandatory and must be set aside to fund major repairs to equipment and infrastructure and for normal cash management purposes. Most reserves, however, are discretionary. Carling's reserves have been built up through tax increases and, as these accumulate, are held in the township's bank accounts (or placed in short-term GIC's). So, Carling has been collecting excessive taxes from the ratepayers and sitting on them for some unspecified, undisclosed, and unapproved projects down the road.
This seems to be how the new Community Centre was funded in 2018 with "no impact on taxes" as we were told. The tax increases were done a few years in advance to fund additional reserves. Also some surplus township land, which could have gone to reduce our taxes, was sold. When the Community Centre hit the official agenda, Council found that they had $1 million dollars to spend! So, this is the scheme: big projects, that are never disclosed or discussed, are funded years in advance under the radar. Reserves have been approved in their entirety as part of the annual budgeting exercise with no discussion of any specific reserve, its purpose, or its amount. This needs to change.
Surely our taxes are well-spent?
I'm not so sure. To try to answer that question, I compared Carling's tax base, tax rate, and tax collections to similar West Parry Sound municipalities, Whitestone and McKellar, and then compared their spending requirements. The results only raise more questions and a great deal of concern.
For one thing, our reserves are three times higher. In addition, it apparently costs us $5.7 million a year to fund about the same amount of infrastructure and services that Whitestone and McKellar maintain for only $3.1 and $3.7 million a year (refer to the table below). It also appears that we are sending increasing levels of funding to organizations in Parry Sound with little to no effective say in how those recipients are managed.
The most concerning and significant observation though is that our property taxes are higher than each of those municipalities despite our tax base being over 60% bigger!
A $500,000 property in Whitestone is levied $2,485 but Whitestone has a much lower tax base (i.e., fewer properties and lower property values in total). If Carling were spending the same amount as Whitestone to maintain the same level of services and facilities, the tax on a $500,000 property would be only $1,610 in Carling (vs the actual $2,680). We should have the lowest individual property taxes by far but instead have the highest! There is something seriously wrong here.
Here is the Table of Comparatives