Towns want property tax replaced with new revenue sources
Town councils in the province have a challenge on their hands, following huge hikes in the assessed value of homes, and Municipalities NL says new ways should be found to bring in revenue.
"We just don't like the property tax a whole lot," said chief executive officer Craig Pollett, "It's a regressive tax, it doesn't accurately reflect your ability to pay all the time. It lags behind the economy."
Pollett got an earful from callers to CBC Radio's CrossTalk Thursday. People are upset by how much their home assessments have gone up.
He doesn't blame them.
"If my value went up 60 or 70 per cent, I'd be shocked too, and want to know why," said Pollett. "But that's the system we have and it's out of our control."
Pollett said the problem is the assessments were done in 2014 and the economy has changed since then.
"The challenge that we're finding now is that we've had a year or so of a not so great economy. People's home prices have sort of stagnated, and they're surprised to see this big increase 'cause what they're used to over the last year is the value of things going down."
We don't like the property tax a whole lot.- Craig Pollett, Municipalities NL
It's a challenge for town councils too, said Pollett.
"They need more money, but no council in this province wants to give a 50-per cent tax increase in one year to its residents, so they need to adjust their mil rate to balance that out."
That's not simple either, said Pollett, because not everyone had a whopping increase in their assessment, and if towns lower their tax rate too much some people will be paying "way less than everybody else."
Pollett said Municipalities NL has lobbied for change. The group says property assessments could be done more often than once every three years.
But the real solution, it has argued, is to replace the property tax with something else.
"We need to start looking at other taxes for municipalities to use … a share of income tax, a share of sales tax, because right now most municipalities have 75 per cent of their income coming from property tax," said Pollett.