Calgary Municipal Politics

[CalgaryTiger]

Rick Bell even ran against Duerr.

RICK BELL RAN FOR OFFICE! AND LOST!

There is a higher power.

it's the Herald columns

I imagine Rick watching Newsmax and writing in single-sentence thought-paragraphs for the Herald. I don't doubt his intelligence to play to the audience directly in front of him.

Also... Can anyone confirm if it is this simple why property taxes need to go up:

Is it because property taxes are a percentage of a property's value and not a consumption tax (GST) or inflationary-reflective tax (income tax)? Meaning that because of inflation things just always cost a little bit more? Buying that concrete for that project cost more this year than last and the City inspectors wage also went up too so those increasing costs need to be made up somehow.

Isn't it that simple? If it is that simple, then I think the City needs to do a better job of explaining that at budget time. To some, they'd still never accept a tax increase and would want the City doing the same or more with less. In reality it would mean less for less but I digress.

 

[darwink]

RICK BELL RAN FOR OFFICE! AND LOST!

There is a higher power.


I imagine Rick watching Newsmax and writing in single-sentence thought-paragraphs for the Herald. I don't doubt his intelligence to play to the audience directly in front of him.

Also... Can anyone confirm if it is this simple why property taxes need to go up:

Is it because property taxes are a percentage of a property's value and not a consumption tax (GST) or inflationary-reflective tax (income tax)? Meaning that because of inflation things just always cost a little bit more? Buying that concrete for that project cost more this year than last and the City inspectors wage also went up too so those increasing costs need to be made up somehow.

Isn't it that simple? If it is that simple, then I think the City needs to do a better job of explaining that at budget time. To some, they'd still never accept a tax increase and would want the City doing the same or more with less. In reality it would mean less for less but I digress.

Property taxes are a revenue neutral model. The rate is recalculated each year. If buildings are added, if buildings are torn down, if property values go up, if property values go down, that does not change the amount of money raised (the cash requirement).

Council each year sets the cash requirement, and allocates that cash requirement across property classes, in Calgary's case residential and non-residential. The cash requirement and allocation then causes the rates to be set once the property assessment is complete.

The 'headline rate' of property tax increases can be multiple things:
1: the percent increase in the overall cash requirement
2: the precent increase of the residential cash requirement
3: the percent increase of the average revenue raised for a 'typical' single family home.

These numbers can go in different directions depending on property trends. In the 2000s there were even years where 1 and 2 increased but 3 decreased.

 

[trtcttc]

Property taxes are a revenue neutral model. The rate is recalculated each year. If buildings are added, if buildings are torn down, if property values go up, if property values go down, that does not change the amount of money raised (the cash requirement).

Council each year sets the cash requirement, and allocates that cash requirement across property classes, in Calgary's case residential and non-residential. The cash requirement and allocation then causes the rates to be set once the property assessment is complete.

The 'headline rate' of property tax increases can be multiple things:
1: the percent increase in the overall cash requirement
2: the precent increase of the residential cash requirement
3: the percent increase of the average revenue raised for a 'typical' single family home.

These numbers can go in different directions depending on property trends. In the 2000s there were even years where 1 and 2 increased but 3 decreased.

The main argument against tax increases is that they're using "more residents" as the justification. But more residents got to live somewhere, so the number of houses have been increasing already. The numerator (total cash required) divided by the denominator (total properties) gives the average tax. The issue is as residents increase, driving up the denominator, the progressive argument is that will lower taxes (more people paying for the same road), but it seems like it's the other way around since the numerator is increasing faster than the denominator. With that context, it's hard to see growth as being positive for existing residents.

 

[darwink]

The main argument against tax increases is that they're using "more residents" as the justification. But more residents got to live somewhere, so the number of houses have been increasing already. The numerator (total cash required) divided by the denominator (total properties) gives the average tax. The issue is as residents increase, driving up the denominator, the progressive argument is that will lower taxes (more people paying for the same road), but it seems like it's the other way around since the numerator is increasing faster than the denominator. With that context, it's hard to see growth as being positive for existing residents.

It depends how we grow. Fire service in even relatively dense new neighborhoods costs so much that they require a subsidy for decades if they ever 'break even' at all. Sometimes it is made even worse with road design, but most of the time it is lack of density driven.

If you lose money on every (suburban) unit, you can't make it up with volume.

 

[CalgaryTiger]

So I'm wrong then? Or I'm a bit confused.

It isn't that concrete costs more and City employees' wages go up it is that the City, on top of those increases, is spending more money and becoming less and less efficient.

In this case I am not thinking about individual property and how some people's taxes increase at different levels depending on their property value relative to other properties. I'm talking about the headline tax increase number.

 

[darwink]

So I'm wrong then? Or I'm a bit confused.

It isn't that concrete costs more and City employees' wages go up it is that the City, on top of those increases, is spending more money and becoming less and less efficient.

In this case I am not thinking about individual property and how some people's taxes increase at different levels depending on their property value relative to other properties. I'm talking about the headline tax increase number.

Residential taxes don't cover the cost of residential services, plus incremental city wide services for residents, in most neighbourhoods in Calgary today. As Calgary grows on the residential side much more than it does on the non-residential side in recent years, it means almost all of the incremental costs have to be covered by the residential tax class.

 

[CalgaryTiger]

Residential taxes don't cover the cost of residential services, plus incremental city wide services for residents, in most neighbourhoods in Calgary today. As Calgary grows on the residential side much more than it does on the non-residential side in recent years, it means almost all of the incremental costs have to be covered by the residential tax class.

I'm so confused.

Do you mean nonresidential taxes don't cover the cost of residential services?

I am still confused. Is the City less and less efficient each year because our external growth means we're chasing our tail?

 

[darwink]

I'm so confused.

Do you mean nonresidential taxes don't cover the cost of residential services?

I am still confused. Is the City less and less efficient each year because our external growth means we're chasing our tail?

It isn't a matter of efficiency. Spending is not rising faster than population growqth + inflation.

The amount of revenue the city can raise from non-residential properties is relatively fixed, via two factors: the legislated tax ratio (influenced heavily by property commerical property value); and that non residential tax base growth is only lightly tied to residential tax base growth.

So when the residential base grows, there is less nonresidential base to subsidize each arbitrary unit of the non residential base. And you end up with residential making up nearly the full increase.

 

[CalgaryTiger]

Spending is not rising faster than population growth + inflation.

This is all I needed to know, thank you though. Your thoroughness is very much appreciated. I just couldn't grasp what you were saying.

The complication of the explanation is a big part of the problem.

When the statement: "City bad with money", is so complicated to rebut no wonder people just go back to that overused trope.

 

[trtcttc]

It isn't a matter of efficiency. Spending is not rising faster than population growqth + inflation.
View attachment 690275

The amount of revenue the city can raise from non-residential properties is relatively fixed, via two factors: the legislated tax ratio (influenced heavily by property commerical property value); and that non residential tax base growth is only lightly tied to residential tax base growth.
View attachment 690278

So when the residential base grows, there is less nonresidential base to subsidize each arbitrary unit of the non residential base. And you end up with residential making up nearly the full increase.
View attachment 690277
View attachment 690276

Using these charts, it's pretty reasonable for existing residents to oppose growth. While I recognize it is non-residential subsidy, that subsidy being spread thinner makes taxes higher and services funded less on a per capita basis. I support growth generally, but this argument that it'll bring down taxes because more people will fund roads or services is simply not real.