Some Taxing Answers

One of my readers had a few questions about the proposed Innisfil budget so I’m taking a little time to provide answers … and a little more.

The Taxpayers

Statistics Canada put Innisfil’s population at 36,566 in 2016. Innisfil’s average gross household income is $107,643. Median after-tax income of two-or-more-person households in 2015 was $81,984. However, high-income earners skewed the average income higher to $93,000 after tax.

The Household Assessment

The draft budget says the “typical” Innisfil property Is assessed at $423,000 in 2019 and will be assessed at $446,000 in 2020. Waterfront properties have an average assessed value of $758,000.

Future Growth

“About 11,100 housing units are forecast to be constructed from 2015 to 2034. The forecast composition of the new units – 61% single and semi-detached units, 17% row units, and 22% apartments – is a reflection of the housing required by family forming in-migrants and, in the case of Friday Harbour, second home owners.

The higher rate of household growth compared to population growth is predicated on a slight decline in occupancy levels in existing housing.

… the majority of new housing (5,272 units or 48%) is to be built in the Alcona service area, which incorporates developments in Alcona proper as well as at Leonard’s Beach, Sandy Cove, and the Big Cedar Point Shoreline. Substantial housing is also anticipated in the Friday Harbour (in the near-term), Lefroy-Belle Ewart, and Alcona South (Sleeping Lion) service areas.” (Long Range Financial Plan, Town of Innisfil – Hemson Consulting, Feb. 2016)

Industrial / Commercial Assessment

Innisfil’s assessment base is almost entirely residential. Including farms, 92.5% of property assessment value is classed as ‘Residential’. Just 6.3% of property assessment is classed as Commercial. Industrial assessment makes up 0.8% of the total.

The 2019 total proposed tax levy is $34.9 million, so we can estimate that $2.47 million is from industrial and commercial assessment.

The 2019 draft budget indicates that the average 2018 Commercial tax assessment in 2018 was $3.18 / square foot. The average Industrial tax assessment in 2018 was $1.97 / square foot.

Hemson Consulting estimated that employment would increase over 20 years (from 2014 to 2034) from 9,300 to 14,000. About 56% of employment in 2034 is estimated to be in Commercial spaces, and 41% in Industrial space. Accordingly, Commercial space would increase to 143,000 square metres in 2034 and Industrial space would occupy 164,700 square metres. Calculating from existing average assessment rates, this would yield about $8.3 million in property tax in 2034.

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Some Taxing Decisions

It’s budget season again in Innisfil. That means Council is busy allocating almost $80 million for operating ($34.9M) and capital projects ($45M) for 2019 and a little over $63 million total for 2020. Over the two-year period, a total of $45.9 million is being allocated to various road projects.

In previous years, the budget was organized according to municipal departments. The problem with that approach was that the cost of a particular service might be allocated to multiple departments – for instance, customer service, human resources, maintenance etc.) That made it difficult to identify the overall cost of a specific municipal service.

This year staff presented a budget organized by service categories. Some of the larger proposed budget allocations for 2019 and 2020 were recently reported by Simcoe.com:

  • $15 million – urbanization of the 7th Line, from 20th Sideroad to Lake Simcoe
  • $5.8 million – 7th Line improvements, 10th Sideroad to Yonge St.
  • $5 million – playground, water play area, landscaping, and pathway in Alcona core
  • $1.5 million – new park in Sleeping Lion development
  • $916,000 – repairs to parking lot, Innisfil Recreation Complex
  • $550,000 – rescue/firefighting boat with $500,000 donated by Friday Harbour
  • $318,000 (2019) + $1 million (2020) – new docking facility, Innisfil Beach Park

Overall, that means an ‘average’ Innisfil household (assessed at $423,000) can expect an increase of $98.23 on the 2019 property tax bill. Innisfil’s budget is scheduled to come forward for approval on February 27 but could be discussed further prior to that.

About that Budget (2017-18)

I haven’t been browsing through the Town’s website for a while so the new (to me) web format was a surprise. It is organized as a straight-forward directory to easily locate basic town departments or services such as recreation programs or business-related information.

Although visitors are invited to download the proposed budget document, I’m not sure many people would have. The proposed tax increases stem in part from an earlier (Draft) Long Range Financial Plan prepared by Hemson Consulting in February 2016. Council subsequently approved a Multi-Year Budgeting Policy in May 2016.

A discussion of the “draws, contributions and balances” of the Capital Reserves “shows that … in key periods, from 2019 to 2022 and 2026 to 2027, Capital Reserves will be insufficient to fund capital needs …” Continue reading

Sunny Days in Innisfil

The annual Sunshine List was released a few weeks ago documenting who in the public sector was paid $100,000 or more, sometimes much more, per year.

Obviously, those with the power and opportunity fare better than the rest of us. That includes politicians who vote their own salaries, administrators and executives who set their own budgets, and organized labour that negotiate collective agreements.

With the release of the Panama Papers, it should be evident that the Sunshine List just acts as a distraction from the shenanigans of the One Percent in the private sector. There, multi-million dollar rewards top the list, and it finances specialists who hide assets offshore. Outrageous stories make the news, like the 20% pay raise (to almost $20 million) for the CEO of BP Oil while losing $6.5 billion on operations.

Even the language used is revealing. The wealthy rely on tax “havens”, a place of safety or refuge …. or a tax “shelter”, a protection or shield from something harmful. Lesser beings might be accused of participating in an “underground economy” or “black market”. What is “wealth management” to some is “tax evasion” for others.

Still, the Sunshine List is significant because the average Ontario salary, around $49,000, is about half of the list’s bottom entry point. Statistics Canada reported the average income in Innisfil was $38,893 at the last census in 2011.

I haven’t seen much in the way of analysis of the Sunshine List so I thought I would have a look at some historical data for Innisfil. There are some interesting trends:  Continue reading

Back to Numbers, Not Measures

Regular readers may recall that I mentioned Ontario’s Municipal Performance Measurement Program (MPMP) here a few times. I went so far as to compile some comparison tables that are still posted on this blog under the “By the Numbers” tab (above). Since the last published data was from 2011, I thought that a breezy warm day would be a good time to update some of this information. But the Ministry of Municipal Affairs and Housing informs me that the program was killed a year ago.

“Effective for the 2014 reporting year, changes were made to reduce the reporting burden of municipalities.  The collection of Municipal Performance Measurement Program (MPMP) measures are no longer required, and have been replaced by Schedule 80D of the Financial Information Return (FIR).”

MPMP was a logically constructed and systematic attempt to measure municipal services performance. Only researchers and analysts like myself might miss it, but it was an intriguing set of data that pulled back the numerical curtain on the inner workings of municipalities. For good measure, the government also deleted from its website the Annual MPMP summary reports that compiled performance data from all of Ontario’s municipalities. Several year’s reports can still be found archived on the web regardless. It would have been interesting to have a longer historical span of data, say 10 years, to look at. MPMP could have continued to apply only to median sized, and larger, municipalities.

Schedule 80D is a simplified numbers dump that doesn’t attempt to provide any performance measure. One step forward, two steps back in the campaign for open and transparent government. MPMP was useful though, in presenting a functional template for the analysis of municipal performance even though municipalities themselves resisted compiling the data and obviously didn’t use it.

The Comparator Trap

Council gave approval to what might have been considered a routine housekeeping matter – updating a list of municipalities to which Innisfil is compared. These “municipal comparators are used for a variety of research and analysis purposes including best practice reviews, recruitment practices, and compensation” according to the staff report. Comparative municipalities are chosen “based on their size, geographic proximity, similarity in the scope of services delivered. It is also recognized that the Town competes with them for talent in the employment market.”

The ‘outdated’ list consisted of 9 other municipalities ranging in size from 19,241(Collingwood) to the City of Barrie (136,000). The new comparator list approved by Council consists of 14 other municipalities ranging from Collingwood to the City of Vaughan (288,301) plus the County of Simcoe (446,000). This list, prepared by a consulting firm at the request of staff, purportedly “maintains the Town’s “mid-market” positioning” but increases the average population size from 72,011 to 147,750 – an increase of 105%. The staff report claims this is “to capture the current and anticipated growth of the Town, as well as highlighting an expanded attracting and retention focus.”

The over-riding assumption is that we must compete with, i.e. out-bid, other municipalities, and the County, for the best administrative candidates. Let’s face it – this is a mug’s game. Continue reading