In my last article, I reviewed the main aspects of the 2014 municipal budget. Now I want to look at how successive Innisfil Budgets compare over several years. Fortunately, a document called the Financial Information Return (FIR) is publicly available from the Ministry of Housing and Urban Affairs (MHUA). It allows anyone to examine the financial returns of any Ontario municipality, or municipalities, as part of Ontario’s Municipal Performance Measurement Program. It is a very dense collection of spreadsheets that is a number-cruncher’s playground.
First of all, how has the municipal portion of the tax bill grown in comparison to the other portions of the tax pie levied for Simcoe County, the Boards of Education and the South Simcoe Police Service? FIR reports for Innisfil show the population, number of households and assessed taxes. It allows us to calculate the tax levied per household. The annual compound rates of growth from 2000 to 2012 look like this…
- Innisfil housholds 1.7%/year
- Innisfil population 2.5%/year
- Tax per household, Education: 0.9%/year
- Tax per household, County of Simcoe: 4.9%/year
- Tax per household, Town of Innisfil: 5.8%/year (includes police service)
Those percentages include inflation. According to the Bank of Canada’s Inflation Calculator, goods and services costing $100 in 2000 would cost $126.95 in 2012. That’s an annual rate of inflation of 2.0% so the tax rates above could be adjusted lower accordingly. Either way, taxes are increasing much faster than households or population.
In dollar terms, the growth in Innisfil property tax looks like this:
In reality, most of us pay less, or more, than the amount per household shown above since our taxes are not shared equally but based on the assessed value of property. In my case, my tax bill is less, while folks with ‘estate’ lots and lakeside frontage are picking up the slack. The Innisfil and County portions clearly look like they have been accelerating since about 2004. We can compare the year-to-year percentage increases to get a sense of the relative rates of growth. The percentage change in tax per household in 2012 compared to 2000 looks like this:
- Increase in number of households: +23% since 2000
- Tax per household, Education: +12% since 2000
- Tax per household, County of Simcoe: +77% since 2000
- Tax per household, Town of Innisfil: +97% since 2000
Plotting the tax increases on a graph is even more dramatic:
What should we make of this?
- Municipalities are apparently overwhelmed by the cost of managing and delivering services for an ever larger population. There are two aspects to this: more complex infrastructure and more complex administration. The 2014 Budget handout helpfully notes that the Town of Innisfil now has 62 buildings and structures, 913 lane-km. of roads, 146 km of main water pipe, and 113 km of main wastewater pipe to maintain. The larger the organization, the greater is the expectation for expertise in law, finance, engineering, planning, and other fields. And that doesn’t come cheap either. Keep in mind that full-time positions declined from 160 in 2000 to 137 in 2012:
- It may help to explain the universal pursuit of more growth among municipalities since more households translates, at least theoretically, into a lower tax load per household. There doesn’t seem to be any point of equilibrium though.
- The zero real growth in education tax levy may explain why my grandkids are selling magazine subscriptions and why your kids are coming home with a new fund-raising assignment every month.
published previously: Combing for Answers in the 2014 Innisfil Budget