Chart showing 2009 Tax Rates in Simcoe County & Taxes Charged on a New Home sold and assessed for $300,000 (ranked from low to high)

Transcription

1 Chart showing 2009 Tax Rates in Simcoe County & Taxes Charged on a New Home sold and assessed for $300,000 (ranked from low to high) Location Local Rate Local Tax County Rate Education Total Rate Total Tax % of Assessment $ on 300K Home % of Assessment % of Assessment % of Assessment $ on 300K Home Adjala-Tosorontio Tp $ $2,256 Essa Tp $ $2,343 Tiny Tp $ $2,432 Severn Tp $ $2,544 Oro-Medonte Tp $1, $2,667 Ramara Tp $1, $2,675 Springwater Tp $1, $2,887 Wasaga Beach T $1, $3,053 Bradford-West Gwillimbury T $1, $3,067 New Tecumseth T $1, $3,142 Clearview Tp $1, $3,401 Innisfil T $1, $3,410 Tay Tp $1, $3,720 Collingwood T $2, $3,982 Barrie C single tier - no separate rate $4,134 Orillia C single tier - no separate rate $4,274 Penetanguishene T $2, $4,438 Midland T $2, $4,589 This chart shows Midland taxes on new homes are the highest in Simcoe County! This is a main reason Midland is growing at a much slower rate than other communities. Construction and other costs for a new home are about the same everywhere in Simcoe County. But Midland charges $2,983 in tax just for local services on a $300,000 home while Tiny charges $825 and Wasaga Beach charges $1,446. This is clearly why new home builders and buyers choose places like Wasaga Beach or Tiny instead of Midland. And why Midland cannot grow until its tax and spending problem is fixed.

2 THE CASE FOR CONTROLLING MIDLAND TOWN SPENDING A comparative study of spending and taxes across 14 Ontario towns and cities

3 Midlandcommunity.ca October, 2011 Midland Community.ca is a community based citizen s group interested in: - A tax and policy friendly community - Accountable and competitive delivery of municipal services - Providing timely and relevant communication to the community-at-large through its website Through its actions, Midland Community.ca strives to promote and influence fair and affordable taxes, efficient municipal services, sustainable growth and economic development. In short, maximizing Midland s magic. Guiding principles: Transparent, selfless, respectful, involved, supportive, constructive and responsive to community needs. Key activities: 1) Understand and monitor the issues and opportunities confronting the town by attending Council and other relevant meetings, and reporting on decisions made to the community. 2) Help create greater transparency and accountability at the municipal government level. 3) Increase citizen/voter participation by making council more relevant to constituents. 4) Help maximize the urban node status opportunity through debate, knowledge and involvement. 5) Encourage neighboring communities to come together on those matters that will mutually benefit the parties i.e. Shared Services, Urban Node, Economic Development, Culture and Heritage, etc. 6) Provide volunteer member resources to town and Council, to support those activities and initiatives that promote Midland s full potential.

4 7) Conduct analyses on relevant issues and share results with members, the community, Council and/or town staff, as appropriate. 8) Provide a forum that informs, and is informed by, the citizens of Midland on issues that affect the functioning and prosperity of the town. To learn more about our group, please contact, Midlandcommunity.ca. Roy Ellis/Stewart Strathearn Ambassadors Deputation to Council by Midlandcommunity.ca, formerly known as Coalition for Fair Taxes: October/24/ Mayor McKay, Deputy Mayor Kramp, Council, senior town staff, interested residents from the community and members from the press, we d like to thank you for the opportunity to address you this evening. - My name is Roy Ellis and I m speaking on behalf of Midlandcommmunity.ca. Our presentation is titled, The Case for Controlling Midland Town Spending. - Midlandcommunity.ca is a community-minded group, approximately 200 members, from all walks of life, with a stated goal to promote and influence fair and affordable taxes, support efficient municipal services, and through all stakeholders collective actions, help drive economic development. - As we only have 10 minutes of your time, we will keep our presentation at a very high summary level and leave you with a detailed handout hoping you will reference the information when making timely 2012 budget decisions. For the audience watching at home on Rogers, a copy is available on our web site, at Midlandcommunity.ca

5 - The first and most important headline is that from 2000 to 2009, the taxes Midland charges the average household for Midland s services are up over 80%, inflation is up just 20%, and we experienced a mere 5% growth in population. - With this as a backdrop, we recognize that many communities and governments at every level around the World are facing similar budgetary and economic challenges. We also acknowledge all are competing for the same pot of gold, that being, growth in business development, population and the resulting growth in the tax base. In our view, the governments and communities that welcome the debate and choose to think and act differently will clearly win in these difficult times. Those communities and governments that are defensive or remain in denial will surely fail. - Our presentation this evening is divided into three parts. First, how Midland performed for the period , second, a review of Midland s budget for years 2010 and 2011, and finally, some projections and commentary. PART 1 - EXTERNAL COMPARISONS We carried out a study of spending and taxes across a random group of 14 Ontario municipalities including Midland, 8 other cities and towns in Simcoe County, 3 in the Muskoka area and 2 in the GTA. Appendix 1 lists the municipalities and our handout contains the comparative results. 2. We obtained our data from detailed Financial Information Reports (FIR s) that all municipalities must file each year with the Province. These are public documents the Province posts on its website. We shared our information with Ted Walker and Sue Gignac and they have had the opportunity to validate the study s accuracy.

6 The comparative information shows Midland has the second lowest population growth of the 14 municipalities - only Parry Sound had lower growth - and some of the highest Departmental spending resulting in the second highest taxes for local Town services. 3. From 2000 to 2009, Midland s population grew by a mere 5% (average population growth 31% for the group) and the number of households grew 8% (average household growth 20% for the group). 4. During the same period, Midland s fulltime staff increased from 112 to 156, an increase of 39% or approximately 5 times the growth in our households and almost 8 times the growth in our population. 5. Inflation measured by the CPI (Consumer Price Index Ontario) increased 20% from 2000 to During the same years from 2000 to 2009: The taxes Midland charged the average household for Town services increased 82% 2nd highest taxes among comparators that are not single tier; The Town s payroll spending per household increased 93% almost doubling in 9 years highest payroll spending among comparators that are not single tier; Spending for Parks and Recreation per person increased 215% more than tripling in 9 years 2nd highest spending among comparators and highest rate of increase; Spending for Fire per household increased 97% highest spending among comparators;

7 Spending for the Library per person increased 61% 2nd highest spending among comparators and before the recent expansion; Spending for Police per household increased 45% 4th highest spending among comparators. PART 2 - MIDLAND 2010 & 2011 (Financial Information Reports for these years not yet published) We should be reminded that in 2008 we experienced the most severe economic downturn since the Great Depression and we re far from being out of the proverbial woods yet. Let s see how we performed in 2010 and 2011 with this in mind: 7. The 2009 inflation rate measured by the CPI was 0.4%: Midland s 2010 spending budget increased by $779,000 (5.0%) over 2009 almost 13 times the 2009 inflation rate; Midland increased its 2010 taxes by 3.7% 9 times the 2009 inflation rate. 8. The 2010 inflation rate measured by the CPI was 2.5%: Midland s 2011 spending budget increased by $896,000 (5.5%) over 2010 approximately double the 2010 inflation rate; Midland increased its 2011 taxes by 2%; To assist in achieving a 2011 increase below the 2010 inflation rate, the Town took an additional $100,000 dividend out of electricity charges paid by Midland PUC customers; Midland also increased its water & sewer charges by 14% in 2011.

8 9. The key point here is annual population growth of approximately 1/2% cannot sustain annual spending increases of 5% or more. 10. A recent study reported in the Globe & Mail looked at 100 U.S. communities and concluded that areas with low taxes tend to grow faster than those with high taxes and areas with high growth tend to have lower taxes than those with low growth. (See Appendix 2) The Town of Wasaga Beach provides an example of this close to home. In 2009, average local taxes per household in Wasaga Beach were just 58% of those paid in Midland. From 2000 to 2009 its population grew 72% against Midland s 5%, approximately fourteen times Midland s rate. PART 3 - PROJECTIONS and COMMENTARY 11. The average single-family house in Midland is now paying $1,812 just for the Town s part of the 2011 tax bill. The Town s charges have almost doubled over the last 11 years with County and Education taxes, and water and sewer increases on top of that.

9 12. Those fortunate enough to have wages or pensions that are fully indexed to the CPI are paying Midland taxes today that have increased 93% since 2000 out of an income that has risen only 26%. Sadly, someone on a fixed or diminishing income is much worse off still. This becomes even more compelling given the forecast that in ten years time, 52% of Midlanders will be 65 or older. 13. Midland is not a high-income community. According to 2006 Census data, the median individual income in Midland was $22,617 19% below the Simcoe County average of $27,838. And Midland s median household income of $45,256 was 27% less than the County average of $62, High property taxes hurt the poor in our community much more than the well-to-do. Property taxes are different from other types of taxation. If you have no income or very low income, you pay no income tax at all. But unless you are homeless, you pay property taxes either as an owner or as part of your rent if you rent the place you live. 15. And the lower your income, the greater the burden of property taxes becomes. According to material published by the Federation of Canadian Municipalities, the poorest 20% of Canadian families paid 9.62% of their gross income on property taxes in 2003 while the wealthiest 20% paid just 1.95% of theirs. In contrast, the poorest 20% paid 4.1% of their gross income on income taxes while the wealthiest paid 25.8%. If you fall within the poorest 20%, you pay over twice as much in property tax as you pay in income tax. 16. Unless the impact of property taxes on the poor is kept front of mind, well-intentioned municipal Councillors who want to ease the burden on their poorest residents can end up adding to it through high spending and resulting high taxes that especially hurt the poor. 17. In our view, our current path is not sustainable. We need decisive action now to steer a new course. While there are lessons we can learn from the past, we believe our main focus should be not how we got here but what actions we need to take to help our great town maximize its full potential.

10 Over the last year our group has spent countless hours attending council meetings, general committee meetings, urban node meetings, planning meetings and the like. We have invested 100 s of hours preparing the research for this report; we hope it will not fall on deaf ears. In summary, we believe the future is bright, to the extent we all acknowledge these trends and commit to action. We have many new faces on Council, testimony to the fact that the people of Midland spoke for change at the polls almost one year ago. When you add a highly competent and dedicated town staff, then throw into the mix, our gift, namely, the beautiful shores of Georgian Bay, with a little help from our generous citizens, the opportunity which we addressed today, should be simply a walk in one of our many beautiful parks. Finally, we applaud Council s commitment and personal investment of time and energy to define a vision for the Town. This vision should serve as our North Star in our pursuit to grow our town and help a better future arrive ahead of schedule. In closing, I d like to share with you one slide from the full handout we will distribute in a moment, titled Overview of Local Tax, Growth, property Values & Incomes for listed Municipalities. What it shows is not a good news story - low growth, low personal and household income, low housing values coupled with high taxes in a troubled local and global economy. That is a legacy from the past none of us should want to carry into our future. This concludes my remarks on behalf of Midlandcommunity.ca Thank you Roy Ellis

11 APPENDIX 1 List of Comparators SIMCOE COUNTY City of Barrie (single tier) Town of Bradford-West Gwillimbury Town of Collingwood Town of Midland Town of New Tecumseth City of Orillia (single tier) Town of Penetanguishene Tiny Township Town of Wasaga Beach MUSKOKA area Town of Bracebridge Town of Gravenhurst Town of Parry Sound (single tier)

12 GTA City of Mississauga Town of Newmarket APPENDIX 2 NEIL REYNOLDS How declining cities can reverse their fortunes From Monday's Globe and Mail Published Monday, Aug. 22, :00AM EDT Last updated Monday, Aug. 22, :10AM EDT In 1980, metropolitan Austin (Texas) had a population of 590,000, metropolitan Syracuse (New York) a population of 643,000. By 2007, Austin s population had grown by more than one million; Syracuse s had scarcely grown at all. More precisely, Austin s population grew by per cent, Syracuse s by 0.2 per cent; Austin s employment grew by per cent, Syracuse s by 24.7 per cent; and Austin s real personal income grew by per cent, Syracuse s by 45.3 per cent. Why the difference? Why exuberant growth in Austin and stagnation in Syracuse? Florida economist Dean Stansel, who analyzed the growth records of the 100 most populous U.S. metropolitan cities across the past 30 years, says economic growth tracks state and municipal tax rates. The lower the rates, the greater the growth. Austin s state-local tax burden (expressed as a percentage of personal income) averaged 9.2 per cent,

13 Syracuse s 12.6 per cent a difference of 33 per cent. Prof. Stansel s paper, published in the Cato Journal, explores the statistical relationships between tax rates and growth from both ends of the telescope: Did low taxes produce high growth, or did high growth produce low taxes? From either perspective, he reached the same conclusion. The data for the largest 100 metro areas show that areas with low taxes do indeed tend to grow faster than those with high taxes. The [same data] show that areas with high growth tend to have lower taxes than those with low growth. Further: Population growth was three times higher in the 10 lowest-tax metro areas than in the 10 highesttax areas. Employment growth was more than two and a half times higher and real personal income growth was twice as high. Comparing the 10 lowest-taxed metro areas with the 10 highest, Prof. Stansel found that population grew, on average, by 64 per cent in the lowest-taxed areas (versus 21 per cent in the highest); that employment grew, on average, by 108 per cent in the lowest-taxed areas (versus 40 per cent in the highest); and that real personal income grew by 157 per cent in the lowest-taxed areas (versus 75 per cent in the highest). The big winners in this three-decade competition were such low-tax cities as Raleigh and Charlotte (in North Carolina), Orlando, Tampa and St. Petersburg (in Florida) and San Antonio, Houston and Austin (in Texas). The losers were such high-tax cities as Detroit (in Michigan), Buffalo, Syracuse and Rochester (in New York) and Cleveland and Toledo (in Ohio). In most cases, it was the local tax burden (rather than the state tax burden) that was decisive. The tax burden in Miami, for example, is 14 per cent higher than in Tampa, where employment growth was twice as fast. Prof. Stansel s paper nicely coincides with California demographer Joel Kotkin s essay in Forbes magazine on

14 the great American migration of the early 21st century on the triumph once again of suburbs over inner-city condos as the preferred destination of the young and the restless: the cohort between 25 and 34. These young families were once thought to have found happiness in sophisticated, high-density urban ghettos. For the past decade, however, they ve moved in progressively greater numbers to the suburbs of southern cities. (Between 2000 and 2010, Houston attracted 174,000 migrants from this cohort alone and New York City lost 200,000.) Why the flight from condos? For one thing, Mr. Kotkin says, it s because young families still want the things that young families have always wanted: single-family homes (with backyard lawns) in low-rise neighbourhoods. For another, they wanted low taxes. It s impossible, of course, to compare the tax burdens of specific U.S. and Canadian cities especially in tough times. Blocked from running deficits, states are obliged to cut services, often arbitrarily. Provinces are under no such restraint; they simply borrow. Texas, for example, has a state debt of $30-billion (U.S.); Ontario has a provincial debt of $220-billion. The Canadian way is easier for now. But today s government debt is tomorrow s taxation. Nevertheless, cities compete in the same way that provinces and nations compete. Toronto and Montreal, two of Canada s highest-taxed cities in two of its highest-taxed provinces, should take note. Immigration aside, these two cities have stopped growing. People do vote with their feet The Globe and Mail Inc. All Rights Reserved. CHARTS to follow:

15 Municipality REFERENCE OR NOTES Overview of Local Tax, Growth, Property Values & Incomes for listed municipalities (Ranked from low to high) Average Local Tax $ Population Growth % Average Value ( Town services only) ( ) owned housing $ Median Personal Income $ Median Household Income $ MIDLANDCOMMUNITY.CA STUDY RANK MIDLANDCOMMUNITY.CA STUDY RANK STATSCAN 2005 CENSUS RANK STATSCAN 2005 CENSUS RANK STATSCAN 2005 CENSUS RANK Tiny % 6 297, , ,760 9 Gravenhurst % 7 258, , ,962 3 Mississauga % , , , Wasaga Beach % , , ,181 7 Bracebridge % 9 264, , ,193 8 Newmarket 1, % , , , New Tecumseth 1, % , , , Penetanguishene 1, % 5 230, , ,666 6 Midland 1, % 2 194, , ,256 2 Bradford West Gwillimbury 1, % 8 320, , , Collingwood no 2009 data 11% 3 274, , ,839 5 Parry Sound (Single Tier) (one tier) 0% 1 202, , ,336 1 Orillia (Single Tier) (one tier) 13% 4 229, , ,722 4 Barrie (Single Tier) (one tier) 77% , , , Average 1,193 31% 271,910 26,715 59,048 Data updated to September 18, 2011

16 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY 2000 LOCAL TAX per Household incr incr. FIR REFERENCE OR NOTES $ $ RANK % RANK $ RANK % RANK Tiny % % 4 Gravenhurst % % 9 Mississauga % % 2 Wasaga Beach 924 1, % % 1 Newmarket 649 1, % 7 1, % 7 New Tecumseth 809 1, % 3 1, % 3 Penetanguishene 1,003 1, % 9 1, % 5 Midland 922 1, % 8 1, % 8 Bradford / W. Gwillimbury 1,103 1, % 6 1, % 6 Bracebridge % 10 no data Collingwood 1,016 1, % 4 no data Orillia (Single Tier) Parry Sound (Single Tier) Barrie (Single Tier) High 1,103 1,765 96% 1, % Average 759 1,208 62% 1,216 62% Low % 754 5% CPI = 20% Midland 922 1, % 8 1, % 8 Data updated to August 23, 2011

17 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY FIR REFERENCE OR NOTES WORKFORCE FULLTIME EMPLOYEES FULLTIME EMPLOYEES per 1000 Households Tiny Gravenhurst Wasaga Beach Newmarket Penetanguishene Bradford / W. Gwillimbury New Tecumseth Mississauga ,031 4, Midland Orillia (Single Tier) Barrie (Single Tier) Parry Sound (Single Tier) Bracebridge no data 9 9 Collingwood no data High Average Low CPI = 20% Midland Data updated to August 23, 2011

18 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY PAYROLL per Household PAYROLL per Person incr incr incr. FIR REFERENCE OR NOTES $ SPENT RANK $ SPENT RANK $ SPENT RANK $ SPENT RANK $ SPENT RANK $ SPENT RANK Tiny % % % Gravenhurst % % % Wasaga Beach % % % Bracebridge % no data no data Penetanguishene , % 1, % % New Tecumseth , % 1, % % Collingwood , % no data no data Newmarket , % 1, % % Mississauga , % 1, % % Bradford / W. Gwillimbury , % 1, % % Midland 1, , % 1, % % Orillia (Single Tier) Parry Sound (Single Tier) Barrie (Single Tier) High 1,034 1, % 1, % % Average 682 1,158 72% 1,253 81% % Low % % % CPI = 20% Midland 1, , % 1, % % Data updated to August 23, 2011

19 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY CPI HOUSEHOLDS POPULATION YOUTH POPULATION % incr % incr 2008 % of TOTAL FIR REFERENCE OR NOTES RANK RANK RANK Parry Sound (Single Tier) 20% 2,801 2,818 2,904 4% 1 5,847 5,251 5,818 0% % 4 Midland 20% 6,813 7,305 7,354 8% 3 16,406 17,200 17,200 5% 2 1, % 5 Collingwood 20% 8,130 9,831 9,831 21% 8 15,745 17,503 17,503 11% 3 1, % 3 Orillia (Single Tier) 20% 12,083 13,165 13,319 10% 4 27,882 31,129 31,420 13% 4 2, % 7 Penetanguishene 20% 3,329 3,713 3,831 15% 7 7,730 9,354 9,354 21% % 8 Tiny 20% 8,509 9,072 9,072 7% 2 8,875 10,784 10,784 22% 6 1, % 13 Gravenhurst 20% 7,446 8,235 8,235 11% 5 8,870 11,046 11,046 25% 7 2, % 14 Bradford / W. Gwillimbury 20% 6,952 8,487 8,644 24% 10 19,940 24,500 25,589 28% 8 2, % 12 Bracebridge 20% 7,301 8,142 8,142 12% 6 11,856 15,562 15,562 31% 9 1, % 9 Mississauga 20% 186, , ,000 24% 9 529, , ,000 38% 10 53, % 2 New Tecumseth 20% 8,974 11,082 11,180 25% 11 23,020 31,551 31,903 39% 11 2, % 6 Newmarket 20% 20,659 25,832 26,955 30% 12 55,079 82,127 83,048 51% 12 6, % 10 Wasaga Beach 20% 7,867 11,368 11,612 48% 14 9,710 16,384 16,700 72% 13 1, % 1 Barrie (Single Tier) 20% 34,108 48,809 50,123 47% 13 78, , ,000 77% 14 11, % 11 High 48% 77% 19.1% Average 20% 31% 9.3% Low 4% 0% 6.5% CPI = 20% Midland 6,813 7,305 7,354 8% 3 16,406 17,200 17,200 5% 2 1, % 5 Note: 2009 Households and Population shown for Collingwood and Bracebridge are 2008 data carried forward because 2009 data not available Data updated to August 23, 2011

20 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY 2000 FIRE per Household incr incr. FIR REFERENCE OR NOTES $ SPENT $ SPENT RANK % RANK $ SPENT RANK % RANK Gravenhurst % % 11 Tiny % % 12 Penetanguishene % % 10 New Tecumseth % % 4 Wasaga Beach % % 3 Bradford / W. Gwillimbury % % 7 Parry Sound (Single Tier) % % 1 Barrie (Single Tier) % % 6 Orillia (Single Tier) % % 8 Newmarket % % 2 Mississauga % % 5 Midland % % 9 Bracebridge % 12 no data Collingwood % 6 no data High % % Average % % Low % 77 31% CPI = 20% Midland % % 9 Data updated to August 23, 2011

21 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY 2000 POLICE per Household incr incr. FIR REFERENCE OR NOTES NET $ NET $ RANK % RANK NET $ RANK % RANK Tiny % % 5 Wasaga Beach % % 1 Penetanguishene % % 8 New Tecumseth % % 7 Orillia (Single Tier) % % 2 Midland % % 4 Parry Sound (Single Tier) % % 3 Bradford / W. Gwillimbury % % 9 Barrie (Single Tier) % % 6 Collingwood % 5 no data Mississauga Newmarket Gravenhurst Bracebridge High % % Average % % Low % % CPI = 20% Midland % % 4 Data updated to August 23, 2011

22 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY 2000 LIBRARY per Person incr incr. FIR REFERENCE OR NOTES $ SPENT $ SPENT RANK % RANK $ SPENT RANK % RANK Tiny % % 10 Wasaga Beach % % 12 Barrie (Single Tier) % % 1 Newmarket % % 2 Parry Sound (Single Tier) % % 3 Penetanguishene % % 4 New Tecumseth % % 8 Bradford / W. Gwillimbury % % 7 Gravenhurst % % 6 Mississauga % % 11 Midland % % 9 Orillia (Single Tier) % % 5 Bracebridge % 6 no data Collingwood % 7 no data High % % Average % 43 44% Low % 16-11% CPI = 20% Midland % % 9 Data updated to August 23, 2011

23 SURVEY of TAX & SPENDING DATA , 2008 & 2009 MUNICIPALITY 2000 PARKS & REC per Person incr incr. FIR REFERENCE OR NOTES $ SPENT $ SPENT RANK % RANK $ SPENT RANK % RANK Tiny % % 11 Penetanguishene % % 1 Bradford / W. Gwillimbury % % 5 Mississauga % % 9 Orillia (Single Tier) % % 3 Wasaga Beach % % 8 New Tecumseth % % 10 Barrie (Single Tier) % % 6 Gravenhurst % % 4 Parry Sound (Single Tier) % % 2 Midland % % 12 Newmarket % % 7 Bracebridge % 10 no data Collingwood % 2 no data High % % Average % % Low % % CPI = 20% Midland % % 12 Data updated to August 23, 2011