Pick your poison: higher property taxes or reduced services

Things got a little heated around Thompson last week but it didn’t have anything to do with the weather.

The heat was generated by residents’ blood boiling as they opened up their 2018 property tax bills and saw that they were going to be paying more this year than they did last, at a time when the local economy is not doing as well as it has and houses are sitting on the market for weeks and months without any offers because many who can are looking at how to get out of Thompson and many who can’t are not inclined to spend money on anything unless they absolutely need to.

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That property taxes are going up should not come as a big surprise to anyone who has been paying attention to municipal politics, but a lot of people, apparently, aren’t overly concerned with how their elected representatives are serving them until it is time to pay the costs, at which point, unfortunately, it’s a little too late.

For those who have been otherwise occupied over the last six or seven months, here’s a crash course on the city’s financial picture. Those of you who have been following municipal politics can consider it a bit of a refresher.

The year started off with council voting to accept a new four-year grant-in-lieu agreement with Vale, which will see the mining company pay 20 per cent less than the $6 million per year it has given the city over the course of the previous five-year agreement for 2018, which totals about $1.2 million.

Fun fact: the city actually ended up getting more money from Vale this year than last year, in effect, because it decided not to give any of the $4.8 million it received for 2018 to the School District of Mystery Lake (SDML), with whom it had split the grant-in-lieu money approximately 70-30 over the previous five years and even further into the past.

If that’s not bad enough, the ensuing three years of the grant-in-lieu agreement, which runs until 2022, will see an even bigger drop, with Vale only committing to paying out $3 million a year – half of what it paid in the previous agreement ­ – for each of those years, though there is a chance the amount for 2019 could go up depending upon how profitable or not the company’s Manitoba Operations are. Hands up everyone who’s counting on the city collecting on that bonus? Anyone?

So, anyways, that was the first week of January.

Fast-forward to late April, when the city held its public financial plan meeting, where it was revealed that residential mill rates would rise about 1.13 per cent from 2017, with the portion for the SDML increasing 0.25 per cent from 18.578 to 18.624 and the City of Thompson levy going up 1.9 per cent from 21.4 to 21.807. For commercial properties, which pay an additional 9.77 mills education special levy to the provincial government, the overall mill rate actually dropped from 50.478 in 2017 to 50.201 for 2018.

However, while the residential mill rate only went up about 1.1 per cent from 2017, provincial property assessments were done for 2018 based on an April 1, 2016 reference date, two years after the previous reference date of April 1, 2014. So if, for example, your assessment rose 5.9 per cent and the mill rate went up about 1.1 per cent, your overall tax bill would be up about 7.1 per cent. On top of that, there’s a special water utility levy to cover service line repairs more than one metre from the structure on residential properties, rather than having those who suffer water breaks pay the entire cost of the excavation and repair themselves. This levy is based on the actual costs of repairing such breaks in the previous year and for 2018 it is $108.69, up from $83.80 in 2017.

If this were a fairy tale or a sitcom, this would be the part where the comforting conclusion that wraps everything up and makes everyone happy would begin. But this is real life and property taxes seem unlikely to go down any time soon. The city will have $1.8 million less revenue from Vale next year than it did this year, which can only be made up through tax increases, spending cuts or transfers from the provincial government. As the Mining Community Reserve Fund contretemps with the city showed, Premier Brian Pallister’s government isn’t inclined to spend any money it doesn’t have to so the last option probably isn’t something to count on. What’s more, when the sewage treatment plant is finished, projected to be in 2019, property owners will have debenture repayment instalments added to their property taxes for as long as 25 years, unless they decide to pay a large lump sum up front. And as more people leave Thompson, the costs of all the services provided by the municipal government will be spread out among fewer and fewer people.

Tough choices lie ahead, for the residents of Thompson and the people they elect to serve them.

© Copyright 2018 Thompson Citizen

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