My recent post about the property tax increase solicited a strong response from Marc; it is in the comments section on right side of this page. As I was reflecting on how to respond I reviewed my post and realized that I had focused on discussing the change in assessments by MPAC and had failed to discuss why our tax rate is what it is.  The latter is driven by what is required by Township for its operating  and capital budget.

I asked our Director of Finance & Treasurer to help me explain further how the budget requirements drive the tax rate.

Each year, the Township reviews its operating and capital / infrastructure requirements to ensure adequate sources of revenues are accessible to support planned operating and capital needs.  At the same time, analysis is completed to evaluate the adequacy of contributions to reserves for purposes of establishing a sustainable financial framework that appropriately plans for long-term infrastructure needs (maintenance, rehabilitation and reconstruction) throughout the Township.

At no time in the 2017 budget planning cycle has the Township made the decision to request access to sources of revenues (i.e. through property taxation) from its residents that weren’t required or necessary.

However, the Township did make the decision in June of 2017, at the time of setting final tax rates for 2017, to increase its contribution to infrastructure reserves as a direct result of new information relating to infrastructure related needs (i.e. strategic land acquisition and accelerated capital works) that weren’t forecast to occur until 2019 or later.

In so doing, the staff recommendation to increase contributions to infrastructure reserves knowingly meant residents would be asked to contribute more in the form of property taxation to support infrastructure needs in direct correlation to the change in assessed value of their household.

As mentioned in my earlier post, some property owners, particularly in King City and Nobleton, saw their assessments increase significantly more than the average.  The extent to which a property’s assessment value changes more or less than the average change, the tax burden on that property owner will be greater or less; but in all cases it is the assessment of business needs (operating & capital budget) which drives the tax rate which is then applied against the MPAC assessment.  This is discussed in more detail on the information page posted on the Township website; see 3 rd last question.

This was a difficult decision to make.  It was the only “right” decision to make if we are to establish a sustainable financial framework to ensure that appropriate infrastructure can be built in a timely manner  to meet the needs of both current residents & businesses and our growth.  Avoiding this tough choice now would necessitate tax increases later.