Proposed tax changes unfair to rural ratepayers, say Chatham-Kent farm groups

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A proposal to eliminate area rating of property taxes for policing, streetlights and horticulture will result in a “monumental tax burden transfer” to rural ratepayers, particularly farm properties, according to two local agricultural organizations.

The Kent Federation of Agriculture and the Chatham-Kent Association of Christian Farmers delivered a position statement to municipal council, sharing concerns about paying higher taxes for services they doubt will change much.

The statement came ahead of a report on Monday’s municipal council agenda that includes an administrative recommendation to eliminate area rating for policing, streetlights and horticulture services, replacing it with a flat rate for all ratepayers as part of a tax-modernization project.

Noting agriculture is Chatham-Kent’s largest industry, Kent Federation president Jay Cunningham said the recommendation is “needlessly downloading additional costs, especially for services we’re not going to see a change in.”

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“To me, it is not an equitable solution to anything,” he said.

The position statement notes that a 300-acre farm in Romney Township, assessed at $12,000 an acre with a farm residence assessed at $200,000, would see a total annual tax increase of $1,132 under the proposal.

Cunningham said that will be compounded by an upcoming reassessment by the Municipal Property Assessment Corporation in 2021, along with municipal plans to raise the farm tax levy from 22 to 25 per cent over three years.

Between the Kent Federation and Christian Farmers, Cunningham said there are more than 2,000 members in the rural community “that are definitely not happy about this and are definitely going to be negatively impacted.”

The tax-modernization report states the goal is to implement a new tax system by consolidating the current 3,000 municipal tax rates, including 14 different area charges, to create efficiencies in the administration of property taxes.

The report noted the “excessive number of tax rates are a carryover of rates from pre-amalgamation.

“The annual calculation of the municipal tax rates is cumbersome and complicated,” the report added. “Area charges add complexity to the understanding of property taxes as it is not a well understood concept by property owners.”

Cunningham disagreed with municipal staff’s opinion that area rating is too difficult to understand.

He said if a box is ticked on your tax bill, you are paying for that service.

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“It’s pretty simple.”

Cunningham also pointed to wording in the report that stated: “Area rating is justified when there is a differential service.”

He said there is definitely a differential in service between rural and urban taxpayers.

“All we’re saying is, ‘We don’t really want to pay the same rate as others who are getting more service than we are,’” Cunningham said.

Coun. Steve Pinsonneault said he’s been hearing about this issue on a near daily basis.

He favours continuing to area rate taxes to pay for police services.

“It’s area-rated for a reason,” he said. “You obviously have more police presence in the City of Chatham than what you have in rural Chatham-Kent.”

The report noted eliminating area rating for policing would result in a $102.65 annual increase per $100,000 assessment for taxpayers in 16 rural areas, including Thamesville. A flat rate would provide $75.84 in annual savings per $100,000 assessment for taxpayers in the urban areas of Chatham, Wallaceburg, Dresden, Ridgetown, Blenheim and Tilbury.

Coun. Carmen McGregor said she is also not in favour of one rate across the board for such services as policing.

“If you live in the rural areas … you’re not getting the same service as if you live in the City of Chatham or he Town of Wallaceburg,” the Wallaceburg ward councillor said.

When it comes to service levels between rural and urban residents, “it isn’t apple to apples, it’s apples to oranges,” Pinsonneault said

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He said area rating is needed because the same level of services are not provided.

“It’s a different level of service and a different level of service should be charged to who is receiving the benefit,” Pinsonneault said.

McGregor agreed that there needs to be some streamlining for the tax system, but not by lumping everyone in one bucket.

McGregor said eliminating area rating would lower taxes for her constituents in Wallaceburg, “but it’s also my responsibility to make decisions for all of Chatham-Kent.”

“If you’re not getting the same service, I don’t think you should be rated the same,” she said.