A Look at Innisfil’s Tax Pie

My last article suggested that an investment in sustainable practices could be financially as well as environmentally beneficial. But our municipal tax bill is only a fraction of the total property tax. I spent some time to look at the way the tax bill has shaped up over the past ten years when the population grew by about 33% from 28,600 to an estimated 38,000. (40% of Innisfil’s population, about 15,000, reside in Alcona).

Based on my own property taxes, each $1,000 of tax in 2001 grew to a total of $1,465 in 2010. That’s an overall increase of 46% over 10 years. By my calculation, that’s a compounded rate of increase of about 4.3% per year. Considering inflation, that’s a fairly reasonable rate of increase but it was offset by some pretty heavy municipal borrowing during some of those years that will have a continuing impact.

The tax ‘pie’ is split four ways for the Town, Policing, the County of Simcoe and the Board of Education. In 2001, the Town share accounted for 42.7% of the total (there was no separate assessment for policing). By 2010, the combined share for the Town and Police grew to 50.7% of the total. While the County maintained a relatively consistent share of the tax bill, the education portion declined as a percentage of the larger tax pie.

 

Assessment for

2001

Tax Share

%

2010

Tax Share

%

Town of Innisfil

42.7

33.0

Police Service

17.7

County of Simcoe

27.3

28.4

Board of Education 29.9

20.9

  • The 2010 Innisfil budget for the 1/3 of property taxes that paid for municipal services and administration (excluding police service) allocated $246,000 for vehicle fuel.
  • The cost of telephone and utilities (electric, water, sewer) are combined as line items in the detailed budget. The total allocated last year was more than $1.5 million. The Innisfil Recreation Complex accounted for 40% of this total and another 23% was allocated to street lighting. These two items account for almost two-thirds of the telephone/utilities budget for the Town of Innisfil.
  • The Town owns Innisfil Hydro so the utilities expense is offset by revenues. The Town budgeted for $925,000 in dividends from Innisfil Hydro last year and a net gain of $766,000 after paying principal and interest on long-term debt related to Hydro ownership. Essentially, the Town pays its utility bill from tax revenue and then recovers 60% of its utility costs through revenue from Innisfil Hydro which is used to pay long term debt.

Utility costs are projected to continue climbing. If Town utility expenses declined gradually through conservation and sustainable technologies while Innisfil Hydro rates rise, the Town may be able to continue budgeting for stable or growing dividend income without increasing the Town operating budget. Otherwise, residents will feel rate increases both in their tax bill and at their hydro meter.

Fuel costs are volatile and unpredictable. Continuing to rely on fossil fuels without looking at alternatives can only lead to chaotic budgeting scenarios in the future.

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