Bridging the Property Tax Gap

Transcription

1 Impact of School Division and Municipal Taxes on Manitoba Farmland Bridging the Property Tax Gap February 10, 2005 Adrienne Batra Manitoba Director Canadian Taxpayers Federation Portage Ave Winnipeg, MB R3C 0E2 Tel: (204) Fax: (204) Web:

2 About the Canadian Taxpayers Federation The Canadian Taxpayers Federation (CTF) is a federally incorporated, non-profit and nonpartisan, advocacy organization dedicated to lower taxes, less waste and accountable government. The CTF was founded in Saskatchewan in 1990 when the Association of Saskatchewan Taxpayers and the Resolution One Association of Alberta joined forces to create a national taxpayers organization. Today, the CTF has over 61,000 supporters nation-wide. The CTF maintains a federal office in Ottawa and offices in the five provincial capitals of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. In addition, the CTF has a Centre for Aboriginal Policy Change in Calgary dedicated to monitor, research and provide alternatives to current aboriginal policy and court decisions. Provincial offices and the Centre conduct research and advocacy activities specific to their provinces or issues in addition to acting as regional organizers of Canada-wide initiatives. CTF offices field hundreds of media interviews each month, hold press conferences and issue regular news releases, commentaries and publications to advocate the common interest of taxpayers. The CTF s flagship publication, The Taxpayer magazine, is published six times a year. An issues and action update called TaxAction is produced each month. CTF offices also send out weekly Let s Talk Taxes commentaries to more than 800 media outlets and personalities nationally. CTF representatives speak at functions, make presentations to government, meet with politicians, and organize petition drives, events and campaigns to mobilize citizens to effect public policy change. All CTF staff and board directors are prohibited from holding a membership in any political party. The CTF is independent of any institutional affiliations. Contributions to the CTF are not tax deductible. The Manitoba division of the Canadian Taxpayers Federation is located in Winnipeg at: Suite 212, 428 Portage Avenue Winnipeg, Manitoba R3C 0E2 Telephone: Facsimile: abatra@shawbiz.ca Web Site:

3 Table of Contents Property Taxes Defined...2 Recommendations...2 Key Findings...3 Overview...4 Assessment Facts...6 What is Assessment?...6 How do Assessments Relate to Property Tax?...7 How are Farms Assessed?...8 Map: Manitoba Agricultural Regions...9 Ten Year School and Municipal Tax Comparison of Rural Municipalities: Long Term Forecast of School and Municipal Taxes in Rural Municipalities: School Division Taxes Levied on Farmland in Municipal Taxes Levied on Farmland in Average School Division and Municipal Taxes Levied on Farmland per Farm...30

4 Property Taxes Defined Property taxes levied on Manitoba properties are collected by three layers of government the Province of Manitoba, municipalities and school boards. The province sets the provincial education support levy. Municipal governments set the municipal taxes and school boards set school division taxes. Together, these three forms of taxation make up the property tax bill for a typical Manitoba residence. Properties classified as farmland are not subject to the provincial education support levy, but municipal and school division taxes are levied on farmland. Recommendations i The province should extend the scope of the of the Taxpayer Protection Act to municipalities and school boards so that all school and municipal tax increases must first be passed by voter approval through referendum. i To remedy the burden of unaffordable and profit-insensitive school taxes, the CTF is calling for the elimination of school division taxes levied on farmland. i To benefit all tax paying property owners in Manitoba, the CTF recommends that the province and school divisions freeze school taxes and work toward annual school tax reductions. i Due to year after year increases of school division taxes, the province should explore alternative funding mechanisms, including a property tax cap (annual increases limited to the rate of inflation) and relevance of school boards. 2

5 Key Findings 1. Between 1993 and 2002, school taxes have increased more than three times the annual rate of inflation. 2. Over these years, school taxes in Manitoba's municipalities increased from $87 million to $161 million, or 85%. 3. On average, school taxes increased at a rate of 7.11% per year. 4. Over the same period, municipal taxes in Manitoba's municipalities increased from $69 million to $115 million, or 67%. 5. On average, municipal taxes increased at a rate of 5.93% per year. 6. A long range forecast from 2003 to 2010, shows that school taxes levied in Manitoba's municipalities would ratchet up to $279 million and municipal taxes would run as high as $103 million if the current average annual tax increases (7.11% for school divisions and 5.93% for municipalities) were used as the indexing factor. 7. In 2004, $47.8 million in school division taxes were levied on properties classified as farmland in rural municipalities out of a total $148 million school division tax base. 8. School division taxes levied on farmland represented 32% of the total school division tax base in Manitoba's rural municipalities. 9. A wide tax gap exits from one rural municipality to another in terms of the dependency on farmland to pay school division taxes. In the R.M of Cameron, school division taxes on farmland account for a remarkably high 86% of the total school division tax base. Whereas in the R.M. of East St. Paul, where farmland acreage is low, school division taxes on farmland account for a mere 1.0% of the total school division tax base out of 116, rural municipalities depend on farmland to support over 50% of the school division tax base. 11. In 2004, $45.4 million in municipal taxes were levied on properties classified as farmland in rural municipalities out of a total $122.1 million municipal tax base. 12. Municipal taxes levied on farmland represent 37.5% of the total municipal tax base in Manitoba's rural municipalities of 116 rural municipalities depended on farmlands to support over 50% of the municipal tax base. 14. In 2004, farmland on the average farm in Manitoba was charged $2,198 in school division taxes and $2,148 in municipal taxes for a combined property tax bill of $4,346. These taxes were levied on farmland alone. 3

6 Overview Farmers Riveted by High School Taxes Many Manitoba farmers are bracing themselves for another property tax hike. Despite a recent reduction in the portioned assessment on farmland that is subject to taxation, reassessments on farm properties across the province are on the rise. Manitoba farmers are no strangers to the crucible of natural disasters and unstable commodity markets. These are the risks borne by the Manitoba farmer. But who in the business would have anticipated the exacting cost of property taxes on farms. Between 1993 and 2002, school division taxes in Manitoba rural municipalities increased 7.11% per year. That's more than triple the average annual rate of inflation. Property taxes on Manitoba farmlands are broken down by municipal taxes paid to local government and school division taxes paid to local school boards. The provincial education support levy is charged on farm residences but not farmlands. In 2004, rural municipalities across the province collected $147 million in school division taxes. Unfortunately, the available data does not break down how much municipal and school division taxes were levied on farmland specifically. Between November 2004 and February 2005, the Canadian Taxpayers Federation conducted research on 116 Manitoba municipalities to study the extent of property taxes levied on Manitoba farmlands in The findings are outlined in this report. The total amount of municipal taxes charged on farmlands in rural municipalities in 2004 was $45 million while $48 million was collected in school division taxes. Properties classified as farmland within rural municipalities alone are paying 32% of the costs to finance Manitoba school divisions and 37.2% to support municipal government. These figures are watered down by the rural municipalities that have a low ratio of farmland to other property classes. But in some municipalities, the school division taxes on farmland are remarkably high. In the R.M. of Cameron, school division taxes levied on farmland account for 86% of the total school division taxes. The school tax burden only compounds the latest problems of flooding, low commodity prices, and unfair international farm subsidies. The only difference between these four curses is that the provincial government is in a position to do something about the grossly unfair property tax burden. The province's speech from the throne has finally offered some much needed relief to Manitoba s rural communities with a 33% reduction in school taxes on farmland, and an additional 17% reduction in 2005 but there is still 50% more to go. The lopsided property tax burden on farmland is rooted in the structure of the property tax system itself that discriminates against businesses (farms) whose mode of operation depends on a large property base. The property tax system has shown itself to be profit-insensitive. 4

7 For example, a high-tech dot.com company run from a garage has made instant millionaires out of many young entrepreneurs who pay next to nothing in property taxes. Meanwhile, a farmer may face a loss in a given year but still have to pay a $10,000 property tax bill. The system is unfair because it fails to link the value of farmland to the income it produces. To remedy the burden of unaffordable and profit-insensitive property taxes, school division taxes should be lifted off properties classified as farmland. For the benefit of all tax paying property owners in Manitoba, the province and school divisions should freeze school taxes and work toward annual school tax cuts. To legislate against annual school and municipal tax hikes, the province should extend the scope of the of the Taxpayer Protection Act to municipalities and school boards so that all school and municipal tax increases must first be passed by voter approval through referendum. Finally, the province should also conduct a comprehensive review of the school tax system to explore alternative education funding mechanisms. Manitobans should not be treated like a cash cow. School boards will have to stretch their current dollars farther and the province will have to arrive at a new funding formula to ensure standard education needs are satisfied. 5

8 Assessment Facts What is Assessment? 1 Assessment is the estimation of a property s probable market value. Properties are assessed so that local governments can levy property taxes. The market creates the value, Manitoba Assessment reports it, and the municipal corporations set the required tax rates based on a number of factors including assessed values. Each property owner s share of property taxes is determined by their assessment. Taxes paid do not necessarily reflect the amount of services a property owner uses they are related to the value of the property. To determine a property s assessment, an assessor takes into account the local market conditions during a reference year. The reference year for the 2002 reassessment, as established by provincial legislation is Put simply, the assessment is the assessor s best estimate of the most probable selling price for a property had it been for sale in the reference year. Location, size, age, and replacement cost are some of the elements that affect market value. Property Information collected by assessors, along with statistical analysis of typical selling prices in the reference year, form the basis of most assessments. The assessed value may not be exactly the same as the selling price if your property sold in the reference year, as assessments only reflect typical values of comparable properties. The purpose of assessment is not to directly reflect one sale price but to assess all similar properties at a similar value so that taxation is shared fairly. While assessors determine the value of most properties by analyzing real estate transactions, some building assessments are measured by calculating their replacement cost less an amount for depreciation. This approach is taken in the case of properties that do not typically sell such as schools, hydro generating plants and manufacturing plants. For some properties, examining their income is the best way of establishing their value. Properties like hotels, apartments and commercial buildings that are leased out generate income for their owners. It is this rental income that attracts a buyer and determines the selling price. Assessors use an accounting/valuation procedure called "capitalization" to determine the appropriate value of such properties. To do so, income and expense information is required from the owners. This information is treated with the strictest of confidence. 1 What is Assessment?, republished from Manitoba Intergovernmental Affairs,

9 How do Assessments Relate to Property Tax? 2 An increase or decrease in assessment may not result in a corresponding change in one s taxes. This is because assessed value is only one of the factors that determines taxes levied on a property. Municipal and school budgets establish the total amount of taxes to be collected -- assessments only determine how the taxes are distributed among properties. In the spring of each year, municipalities, school divisions and Manitoba Education, Training and Youth, determine the amount of property taxes to be raised. Rates are set for each by dividing budget requirements by the total assessment in the taxing jurisdiction (municipality, school division or province as the case may be). The municipal rate, expressed as thousandths of the total assessment, is called the "mill rate" after the Latin word for thousand (millesimum). For the purpose of calculating mill rates and taxes, municipalities use "portioned" assessment. Portioning was introduced with the amendments to assessment legislation in When Manitoba began market value assessment, it became apparent that types of property had increased in value at varying rates over the years. Bringing assessments up to current market values all at once would have resulted in very large tax increases for some property owners. To phase in the changes, nine property classes were created with each class being assigned, initially, the same share of taxes that such property had been paying before market valuation began. Through annual adjustment of the portion percentages assigned to certain classes of property, a more equitable sharing of taxes has been achieved. Property Class and Percent of Assessment Residential (less than 5 dwelling units) 45 Residential (more than 5 dwelling units) 45 Residential (Owner occupied condominiums and cooperative housing) 45 Farm 26 Designated Higher Education Property 26 Institutional 65 Pipeline 50 Railway 25 Other 65 Designated Recreational Property 10 The municipal mill rate is applied to your "portioned" assessment. For instance, if your singlefamily residence is valued at $100,000, its portioned assessment is $45,000. The mill rate is then applied to this figure. An increase in assessment will not necessarily mean higher taxes. Only properties that see above average increases are likely to see an increase in taxes. In other words, if your property increased in value by 10% and the average increase of all properties in the municipality was 5%, your tax bill may rise (depending on how municipal and education budgets have changed). If your property increased in value by 4% and the average increase was 5%, you would not likely have a higher tax bill (again, depending on the taxing authorities requirements). 2 How do Assessments Relate to Property Tax?, republished from Manitoba Intergovernmental Affairs,

10 How are Farms Assessed? 3 Farmland, farm outbuildings and farm residences are assessed on the basis of their most probable market value. Market value assessment is the assessor's best estimate of the selling price of a property had it been for sale in the reference year (1999 for the 2002 reassessment). In determining the market value of farmland, the assessor takes into consideration such factors as sales values, soil productivity and location. Land that is considered non-arable is typically assessed at lower rates than arable land. Examples of non-arable land include bush, pasture, sloughs and ravines. The value of land that is suitable for cultivation may be affected by such physical characteristics as drainage, topography, erosion, salinity and stoniness. Market values of arable farmlands are also influenced by supply, demand and the ability to grow specialized crops. Farmlands in close proximity to major centres or recreation areas often have higher sale values than similar farmlands located in the more remote areas of the Province. This added value is due to their location near more intensively developed land. The potential for development of the farmland drives up its value. The assessor must identify this value in preparing the assessment but legislation provides the property owner with the option to apply for a "Farm Use" assessment. Farmland subject to a Farm Use assessment is assessed and taxed on the basis of its value as farm land as opposed to the higher assessment which reflects the development influence. Farm Use assessments remain in effect for as long as the property is used for farm purposes. A change in use of the property will result in a "tax payback" on the difference between the two values for a period of up to five years. There is a large variety of farm buildings to be valued ranging from older wood frame structures to specialized buildings used in the dairy, hog and poultry industry. In some cases, buildings add little value to the farm unit and in other cases they are a major component. In determining the value of farm buildings, the assessor considers size, age, condition, quality of construction, and sales of similar properties. 3 How are Farms Assessed?, republished from Manitoba Intergovernmental Affairs,

11 Map: Manitoba Agricultural Regions 9

12 Ten Year School and Municipal Tax Comparison of Rural Municipalities: * Findings: Between 1993 and 2002, school taxes have increased more than three times the average annual rate of inflation. Over the same period, school taxes in Manitoba's rural municipalities increased from $87 million to $160 million, or 85%. On average, school taxes increased at a rate of 7.11% per year. Over the same period, municipal taxes in Manitoba's rural municipalities increased from $69 million to $110 million, or 67%. On average, municipal taxes increased at a rate of 5.93% per year. A long range forecast for 2003 and 2010, shows that school taxes levied in Manitoba's rural municipality would ratchet up to $279 million and municipal taxes would run as high as $103 million if the current average annual tax increases (7.11% for school divisions and 5.93% for municipalities) were used as the indexing factor. *Most current data available. 10

13 Ten Year School and Municipal Tax Comparisson: Avereage Annual Increase Percent Increase: School Taxes 1 $87,032,521 89,931,466 95,338, ,540, ,097, ,788, ,138, ,233, ,015, ,958, % Annual Increase % 6.01% 6.51% 13.35% 10.16% 6.59% 5.99% 6.83% 5.19% 7.11% - Municipal Taxes 2 $68,660,385 72,487,735 74,319,574 79,572,788 90,457,643 95,980,113 99,755, ,144, ,997, ,892, % Annual Increase % 2.53% 7.07% 13.68% 6.11% 3.93% 4.40% 4.66% 5.41% 5.93% - Annual Rate of Inflation 1.80% 0.20% 2.40% 1.50% 1.60% 1.00% 1.70% 2.70% 2.50% 2.30% - - Notes: 1 School taxes include the school division special levy and the provincial education support levy. 2 Municipal taxes includes general municipal tax, special areal levies, debt charges and other government levies. Source: Statistical Information: Municipalities of the Province of Manitoba, Years , Manitoba Intergovernmental Affairs Consumer Price Index, Statistics Canada, Years

14 Ten Year School and Municipal Tax Comparison: (Millions) $180.0 $160.0 $153.0 $161.0 $143.2 $140.0 $135.1 $126.8 $120.0 $115.1 $114.9 $100.0 $80.0 $87.0 $68.7 $89.9 $72.5 $95.3 $74.3 $101.5 $79.6 $90.5 $96.0 $99.8 $104.1 $109.0 School Taxes Municipal Taxes $60.0 $40.0 $20.0 $

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16 Long Range Forecast of School and Municipal Taxes in Rural Municipalities: Percent Increase: School Taxes $172,402, ,660, ,789, ,852, ,915, ,048, ,329, ,839,122 62% Average Annual Tax Increase 7.11% 7.11% 7.11% 7.11% 7.11% 7.11% 7.11% Municipal Taxes $68,660,385 72,731,946 77,044,950 81,613,716 86,453,409 91,580,096 97,010, ,763,536 50% Average Annual Tax Increase 5.93% 5.93% 5.93% 5.93% 5.93% 5.93% 5.93% Note: Forecast is indexed by the average annual school tax increase (7.11%) and the average annual municipal tax increase (5.93%) 13

17 School Division Taxes Levied on Farmland in 2004 Findings: In 2004, $47.8 million in school division taxes were levied on properties classified as farmland in rural municipalities out of a total $147.9 million school division tax base. School division taxes levied on farmland represented 32% of the total school division tax base in Manitoba's rural municipalities. A wide tax gap exits from one rural municipality to another in terms of the dependency on farmland to pay school division taxes. In the R.M of Cameron, school division taxes on farmland account for a remarkably high 86% of the total school division tax base. Whereas in the R.M. of East St. Paul, where farmland acreage is low, school division taxes on farmland account for a mere 1.0% of the total school division tax base 49 out of 116, rural municipalities depended on farmlands to support over 50% of the school division tax base. 14

18 Rural Municipalities School Division Taxes Levied on Farmland in 2004 School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Albert $237,087 $304, % Alexander 147,086 2,710, % Alonsa 342, , % Archie 168, , % Argyle 412, , % Armstrong 290, , % Arthur 375, , % Bifrost 417,161 1,074, % Birtle 343, , % Blanshard 309, , % Shellmouth Boulton 317, , % Brenda 486, , % Brokenhead 466,365 1,917, % Cameron 395, , % Cartier 851,032 2,267, % Clanwilliam 90, , % Coldwell 143, , % Cornwallis 239,836 1,297, % Daly 271, , % Dauphin 636,516 1,337, % De Sallaberry 749,350 1,713, % Dufferin 822,194 1,411, % East St. Paul 66,337 6,788, % Edward 250, , % Ellice 160, , % Elton 386,222 1,122, % Eriksdale 101, , % Ethelbert 125, , % Fisher 384, , % Franklin 658,346 1,315, % Gilbert Plains 458, , % Gimli 106,764 3,127, % Glenella 164, , % Glenwood 348, , % Grahamdale 257, , % Grandview 372, , % Grey 757,505 1,227, % Hamiota 295, , % Hanover 1,101,461 3,821, % Harrison 167, , % Headingley 119,661 1,783, % Hillsburg 152, , % Kelsey 168, , % La Broquerie 550,072 1,392, % Lac du Bonnet 252,504 2,353, % Lakeview 106, , % Langford 207, , % Lansdown 245, , % Lawrence 162, , % 15

19 Rural Municipalities (con't) School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Lorne 1,036,055 1,656, % Louise 733, , % Macdonald 1,498,907 5,066, % McCreary 183, , % Miniota 280, , % Minitonas 506,941 1,040, % Minto 158, , % Montcalm 567,250 1,061, % Morris 1,178,627 1,942, % Morton 514, , % Mossey River 186, , % Mountain 297, , % North Cypress 800,078 2,512, % North Norfolk 704,986 1,948, % Oakland 308, , % Ochre River 165, , % Odanah 157, , % Park 186, , % Pembina 947,261 1,517, % Piney 164, , % Pipestone 375,518 1,219, % Portage La Prairie 1,917,177 4,944, % Reynolds 104,218 1,185, % Rhineland 1,541,392 2,855, % Ritchot 417,435 2,758, % Riverside 298, , % Roblin 287, , % Rockwood 779,711 3,606, % Roland 514, , % Rosedale 310, , % Rossburn 190, , % Rosser 450,501 1,859, % Russell 198, , % St. Andrews 490,093 5,661, % Ste. Anne 407,743 2,191, % St. Clements 394,993 5,051, % St. Francois Xavier 231, , % St. Laurent 61, , % Ste. Rose 180, , % Saskatchewan 245, , % Shell River 337, , % Shoal Lake 200, , % Sifton 221, , % Siglunes 129, , % Silver Creek 221, , % South Cypress 316, , % South Norfolk 532, , % Springfield 922,115 7,986, % Stanley 1,075,952 2,647, % Strathclair 211, , % Strathcona 191, , % 16

20 Rural Municipalities (con't) School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Stuartburn 228, , % Swan River 729,528 1,502, % Tache 544,983 3,714, % Thompson 441, , % Turtle Mountain 597, , % Victoria 388, , % Victoria Beach 703 1,074, % Wallace 450,267 1,282, % Westbourne 630, , % West St. Paul 102,819 3,118, % Whitehead 256, , % Whitemouth 245, , % Whitewater 395, , % Winchester 387, , % Woodlands 543,048 1,534, % Woodworth 382, , % Totals: $47,304,480 $147,872, % Local Government Districts School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Mystery Lake NA NA NA Pinawa $6,007 $599, % Totals: $6,007 $599, % Villages School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Benito NA NA NA Binscarth , % Bowsman 8,639 64, % Cartwright 1,546 67, % Crystal City 1, , % Dunnotar NA NA NA Elkhorn , % Ethelbert 1,855 49, % Garson NA NA NA Glenboro 1, , % MacGregor , % McCreary 1, , % Notre Dame des Lourdes 6, , % Plum Coulee 2, , % Powerview , % Riverton , % St. Claude , % St. Lazare , % St. Pierre-Jolys 1, , % 17

21 Villages (con't) School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Somerset 2, , % Treherne 3, , % Waskada , % Wawanesa , % Winnipegosis , % Totals: $36,630 $2,752, % Towns School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Altona $14,096 $1,708, % Arborg , % Beausejour 214 1,293, % Birtle 3, , % Boissevaine , % Carberry 1, , % Carman 2, , % Churchill , % Deloraine 1, , % Emerson 23, , % Erickson , % Gilbert Plains 1, , % Gillam 5, , % Gimli NA NA NA Gladstone 1, , % Grand Rapids NA NA NA Grandview 1, , % Gretna 2, , % Hamiota , % Hartney 1,181 75, % Killarney 1, , % Lac du Bonnet , % Leaf Rapids NA NA NA Lynn Lake NA NA NA Manitou 3, , % Melita , % Minitonas , % Minnedosa 4, , % Morden 16,488 2,676, % Morris 2, , % Neepawa 12,907 1,080, % Niverville 11, , % Oak Lake , % Pilot Mound 1, , % Rapid City , % Rivers 2, , % Roblin , % Rossburn 1, , % Russell , % 18

22 Towns (con't) School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Ste. Anne 3, , % Ste. Rose Du Lac , % Shoal Lake 1, , % Snow lake , % Souris , % Stonewall 3,430 1,711, % Swan River 1,452 1,854, % Teulon , % Virden 1, , % Winkler 53,949 3,523, % Winnipeg Beach NA NA NA Totals: $191,824 $27,611, % Cities School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Brandon $30,139 $16,651, % Dauphin 10,411 3,125, % Flin Flon NA NA NA Portage La Prairie 20,095 4,406, % Selkirk 9,046 3,661, % Steinbach 29,399 4,323, % The Pas 338 2,823, % Thompson NA NA NA Subtotals: $99,428 $34,992, % Winnipeg $444,653 $332,055, % Totals: $544,081 $367,047, % Summary School Division Taxes on Farmland Total School Division Taxes* Farmland School Division Tax as a % of 2004 School Tax Revenue Rural Municipalities $47,304,480 $147,872, % Local Government Districts 6, , % Villages 36,630 2,752, % Towns 191,824 27,611, % Cities 544, ,047, % Total $48,083,022 $545,883, % NA - Not Applicable (no taxes levied) *School Division Tax does not include the provincial education support levy Source: Total Municipal and School Assessment for the Year 2004, Report RMA07, January 11, 2005, Manitoba Intergovernmental Affairs 2004 Municipal Rates and Levies, Manitoba Intergovernmental Affairs 19

23 Percent of School Division Taxes Levied on Farmland in 2004 Broken Down by Rural Municipality (1) 100.0% 90.0% 86.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 81.6% 79.6% 77.9% 75.4% 73.9% 72.9% 72.8% 72.6% 71.8% 71.8% 71.4% 71.0% 70.1% 70.0% 69.3% 69.3% 69.1% 69.0% 67.9% 67.6% 67.5% 67.5% 10.0% 0.0% ridging the Property Tax Gap: The Impact of School Division & Municipal Taxes on Manitoba Farmland 66.9% 65.6% 63.9% 63.5% 62.7% 62.6% 20 Cameron Louise Alonsa Albert Whitewater Birtle Mossey River Roland Grandview Silver Creek Lakeview Rossburn Gilbert Plains Lansdown Brenda Winchester Woodworth Thompson Ethelbert Glenella Hillsburg McCreary Roblin Farmland School Division Tax as a % of Total School Division Tax Revenue Riverside South Norfolk Westbourne Arthur Morton Lawrence B

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25 Percent of School Division Taxes Levied on Farmland in 2004 Broken Down By Rural Municipality (2) 70.0% 62.5% 62.4% 62.3% 61.7% 61.6% 61.4% 60.7% 60.5% 59.8% 59.8% 60.0% 58.8% 58.7% 58.3% 56.3% 54.0% 53.8% 53.4% 52.5% 52.0% 51.6% 50.0% 49.5% 49.4% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% ridging the Property Tax Gap: The Impact of School Division & Municipal Taxes on Manitoba Farmland 49.0% 48.7% 48.6% 48.3% 47.6% 46.4% 21 Lorne Pembina Shellmouth Boulton Grey Victoria Mountain Morris Ellice Turtle Mountain Argyle Edward Rosedale Dufferin Daly Rhineland Strathclair Montcalm Minto Langford Strathcona Franklin Fisher Shell River Farmland School Division Tax as a Percent of Total School Division Tax Revenue Shoal Lake Minitonas Swan River Ste. Rose Dauphin Armstrong B

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27 Percent of School Division Taxes Levied on Farmland in 2004 Broken Down by Rural Municipality (3) 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 44.9% 43.7% 42.9% 42.4% 40.6% 39.5% 39.4% 39.0% 38.8% 38.8% 38.6% 38.6% 37.5% 37.4% 37.1% 37.0% 36.2% 35.9% 35.8% 35.5% 35.4% 35.4% 5.0% 0.0% 35.1% 34.6% 34.4% 34.0% 32.8% 32.0% 31.8% Stuartburn De Sallaberry Harrison Blanshard Stanley La Broquerie Hamiota Russell Bifrost Portage La Prairie Grahamdale Glenwood Cartier Odanah Clanwilliam Oakland North Norfolk Whitehead Saskatchewan Eriksdale Ochre River Woodlands Farmland School Division Tax as a Percent of Total School Division Tax Revenue Wallace South Cypress Elton Sifton St. Francois Xavier Whitemouth North Cypress 22

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29 Percent of School Division Taxes Levied on Farmland in 2004 Broken Down by Rural Municipality (4) 35.0% 31.1% 30.8% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 29.6% 29.5% 29.3% 28.8% 24.3% 24.2% 21.6% 21.1% 20.5% 19.8% 19.2% 18.6% 18.5% 15.1% 14.7% 11.5% 10.7% 10.5% 8.8% 8.7% 0.0% 7.8% 6.7% 5.4% 3.4% 3.3% 1.0% 0.1% Archie Pipestone Macdonald Miniota Coldwell Hanover Brokenhead Rosser Rockwood Piney Park Siglunes Kelsey Ste. Anne Cornwallis Ritchot Tache Springfield Lac du Bonnet St. Laurent Reynolds St. Andrews Farmland School Division Tax as a Percent of Total School Division Tax Revenue St. Clements Headingley Alexander Gimli West St. Paul East St. Paul Victoria Beach 23

30 Municipal Taxes Levied on Farmland in 2004 Findings: In 2000, $45.4 million in municipal taxes were levied on properties classified as farmland in rural municipalities out of a total $122.2 million municipal tax base. Municipal taxes levied on farmland represented 37.2% of the total municipal tax base in Manitoba's rural municipalities. A wide tax gap exits from one rural municipality to another in terms of the dependency on farmland to pay municipal taxes. In the R.M of Cameron, municipal taxes on farmland account for a remarkably high 86% of the municipal tax base. Whereas in the R.M. of East St. Paul, where farmland acreage is low, municipal taxes on farmland account for a mere 1.0% of the total municipal tax base. 49 of 116, rural municipalities depended on farmlands to support over 50% of the municipal tax base. 24

31 Municipal Taxes Levied on Farmland in 2004 Rural Municipalities Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Albert $400,946 $514, % Alexander 92,777 1,788, % Alonsa 320, , % Archie 169, , % Argyle 457, , % Armstrong 264, , % Arthur 378, , % Bifrost 552,579 1,404, % Birtle 509, , % Blanshard 298, , % Shellmouth Boulton 389, , % Brenda 530, , % Brokenhead 451,097 1,707, % Cameron 486, , % Cartier 620,002 1,654, % Clanwilliam 128, , % Coldwell 189, , % Cornwallis 156, , % Daly 266, , % Dauphin 835,040 1,761, % De Sallaberry 671,558 1,552, % Dufferin 941,698 1,619, % East St. Paul 25,596 2,621, % Edward 362, , % Ellice 167, , % Elton 209, , % Eriksdale 130, , % Ethelbert 222, , % Fisher 391, , % Franklin 600,487 1,196, % Gilbert Plains 806,693 1,130, % Gimli 93,841 3,017, % Glenella 204, , % Glenwood 299, , % Grahamdale 213, , % Grandview 692, , % Grey 826,442 1,340, % Hamiota 258, , % Hanover 486,208 1,725, % Harrison 261, , % Headingley 93,204 1,401, % Hillsburg 191, , % Kelsey 148, , % La Broquerie 644,012 1,577, % Lac du Bonnet 169,430 1,578, % Lakeview 208, , % Langford 233, , % Lansdown 406, , % Lawrence 224, , % Lorne 757,746 1,225, % Louise 835,070 1,026, % 25

32 Rural Municipalities Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Macdonald 842,639 2,812, % McCreary 195, , % Miniota 212, , % Minitonas 417, , % Minto 171, , % Montcalm 506, , % Morris 1,148,047 1,926, % Morton 622, , % Mossey River 288, , % Mountain 316, , % North Cypress 377,675 1,188, % North Norfolk 457,116 1,293, % Oakland 154, , % Ochre River 194, , % Odanah 127, , % Park 162, , % Pembina 730,934 1,202, % Piney 113, , % Pipestone 416,214 1,351, % Portage La Prairie 1,858,322 4,775, % Reynolds 39, , % Rhineland 1,017,101 1,885, % Ritchot 288,156 1,786, % Riverside 331, , % Roblin 407, , % Rockwood 538,486 2,531, % Roland 427, , % Rosedale 416, , % Rossburn 427, , % Rosser 300,334 1,244, % Russell 285, , % St. Andrews 347,480 3,959, % Ste. Anne 217,385 1,136, % St. Clements 223,517 3,193, % St. Francois Xavier 183, , % St. Laurent 73, , % Ste. Rose 266, , % Saskatchewan 179, , % Shell River 293, , % Shoal Lake 355, , % Sifton 216, , % Siglunes 141, , % Silver Creek 365, , % South Cypress 216, , % South Norfolk 624, , % Springfield 537,208 4,725, % Stanley 619,042 1,532, % Strathclair 374, , % Strathcona 273, , % Stuartburn 255, , % Swan River 676,045 1,397, % Tache 397,049 2,776, % Thompson 606, , % Turtle Mountain 662,379 1,110, % 26

33 Rural Municipalities Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Victoria 496, , % Victoria Beach , % Wallace 443,431 1,265, % Westbourne 825,181 1,315, % West St. Paul 43,411 1,365, % Whitehead 214, , % Whitemouth 181, , % Whitewater 368, , % Winchester 588, , % Woodlands 599,442 1,619, % Woodworth 482, , % Totals 45,417, ,195, % Local Government Districts Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Mystery Lake NA NA NA Pinawa $5,350 $545, % Totals $5,350 $545, % Villages Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Benito NA NA NA Binscarth , % Bowsman 1, , % Cartwright 3, , % Crystal City 3, , % Dunnotar NA NA NA Elkhorn 1, , % Ethelbert 3,729 99, % Garson NA NA NA Glenboro 2, , % MacGregor , % McCreary 1, , % Notre Dame des Lourdes 7, , % Plum Coulee 4, , % Powerview , % Riverton , % St. Claude , % St. Lazare , % St. Pierre-Jolys 2, , % Somerset 4, , % Treherne 5, , % Waskada 1,091 80, % Wawanesa , % Winnipegosis , % Totals $45,444 $4,649, % 27

34 Towns Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Altona $12,362 $1,600, % Arborg , % Beausejour 174 1,129, % Birtle 12, , % Boissevaine 1, , % Carberry 1, , % Carman 2,425 1,043, % Churchill 174 1,661, % Deloraine 3, , % Emerson 31, , % Erickson , % Gilbert Plains 2, , % Gillam 7, , % Gimli NA NA NA Gladstone 3, , % Grand Rapids NA NA NA Grandview 2, , % Gretna 3, , % Hamiota 1, , % Hartney 2, , % Killarney 1,976 1,033, % Lac du Bonnet , % Leaf Rapids NA NA NA Lynn Lake NA NA NA Manitou 5, , % Melita 1, , % Minitonas , % Minnedosa 6,978 1,332, % Morden 10,003 1,673, % Morris 3,693 1,199, % Neepawa 19,514 1,812, % Niverville 9, , % Oak Lake , % Pilot Mound 3, , % Rapid City 1, , % Rivers 2, , % Roblin 1, , % Rossburn 3, , % Russell 1, , % Ste. Anne 2, , % Ste. Rose Du Lac , % Shoal Lake 2, , % Snow lake , % Souris , % Stonewall 2,427 1,350, % Swan River 1,353 1,875, % Teulon , % Virden 1,564 1,269, % Winkler 15,521 1,099, % Winnipeg Beach NA NA NA Totals $192,347 $32,374, % 28

35 Cities Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Brandon $39,034 $22,302, % Dauphin 16,139 5,113, % Flin Flon NA NA NA Portage La Prairie 29,513 6,741, % Selkirk 12,945 5,578, % Steinbach 19,514 3,114, % The Pas 487 4,221, % Thompson NA NA NA Subtotals $117,632 $47,072, % Winnipeg 506, ,641, % Totals $624,370 $424,713, % Summary Municipal Taxes on Farmland Total Municipal Taxes Municipal Tax as a % of 2004 Municipal Tax Revenue Rural Municipalities $45,417,453 $122,195, % Local Government Districts 5, , % Villages 45,444 4,649, % Towns 192,347 32,374, % Cities 624, ,713, % Total $46,284,965 $584,477, % Source: Total Municipal and School Assessment for the Year 2004, Report RMA07, January 11, 2005, Manitoba Intergovernmental Affairs 2004 Municipal Rates and Levies, Manitoba Intergovernmental Affairs 29

36 2004 Average School Division and Municipal Taxes Levied on Farmland per Farm Findings: According to the 2001 Census, 21,071 farms were reported in Manitoba down from 24,383 farms in In 2004, farmland on the average farm in Manitoba was charged $2,198 in school division taxes and $2,148 in municipal taxes for a combined property tax bill of $4,346. These taxes were levied on farmland alone. A wide tax gap exists from one rural municipality to another in terms of the impact of property taxes on individual farmers. The average farmer in the R.M. of Oakland was charged $1,788 in school division taxes and $894 in municipal taxes on farmland, for a total tax bill of $2,682. Meanwhile, the average farm in the R.M. of Rosser was charged $4,095 to cover school division taxes and another $2,730 in municipal taxes on farmland for a total tax bill of $6,

37 2004 Average School Division and Municipal Taxes Levied on Farmland Per Farm Census Farms School Taxes on Farmland Municipal Taxes on Farmland Average School Taxes Per Farm Average Municipal Taxes Per Farm Average School and Municipal Taxes on Farmland Per Farm Manitoba 21,071 $48,083,022 $46,284,965 $2,198 $2,148 $4,346 Agricultural Region 1 1,556 $4,135,685 $5,018,628 $2,643 $3,216 $5,859 Whitewater , ,276 3,565 3,318 6,883 Winchester (Includes Deloraine) , ,707 2,719 4,138 6,857 Cameron (Includes Hartney) , ,711 3,029 3,738 6,767 Turtle Mountain (Includes Killarney) , ,355 3,058 3,390 6,448 Riverside , ,835 2,983 3,318 6,301 Morton (Includes Boissevain) , ,542 2,754 3,334 6,089 Brenda (Includes Waskada) , ,959 3,245 3,546 6,791 Albert , ,946 1,810 3,061 4,870 Edward , ,651 1,925 2,790 4,715 Arthur (Includes Melita) , ,116 2,296 2,318 4,614 Strathcona , ,531 1,691 2,421 4,111 Agricultural Region 2 2,138 $4,396,153 $3,502,513 $2,077 $1,688 $3,766 Glenwood (Includes Souris) , ,031 2,682 2,308 4,990 North Cypress (Includes Carberry) , ,063 3,169 1,498 4,667 Woodworth , ,563 1,901 2,401 4,302 South Cypress (Includes Glenboro) , ,710 2,482 1,709 4,190 Daly (Includes Rivers) , ,139 2,059 2,024 4,082 Whitehead , ,097 2,103 1,755 3,858 Pipestone , ,214 1,699 1,883 3,582 Elton (Includes Cornwallis & Brandon) , ,106 2,137 1,316 3,454 Wallace (Includes Elkhorn & Virden) , ,332 1,483 1,463 2,946 Oakland (Includes Wawanesa) , ,724 1, ,683 Sifton (Includes Oak Lake) , ,533 1,348 1,318 2,666 Bridging the Property Tax Gap: The Impact of School Division & Municipal Taxes on Manitoba Farmland 31

38 Census Farms School Taxes on Farmland Municipal Taxes on Farmland Average School Taxes Per Farm Average Municipal Taxes Per Farm Average School and Municipal Taxes on Farmland Per Farm Agricultural Region 3 1,907 $3,519,097 $4,070,750 $1,828 $2,134 $3,962 Strathclair , ,403 1,944 3,435 5,379 Shoal Lake (Includes Town of Shoal Lake) , ,354 2,144 3,812 5,956 Blanshard , ,204 2,739 2,639 5,378 Birtle (Includes Town of Birtle) , ,186 2,044 3,072 5,116 Langford (Includes Neepawa) , ,977 2,024 2,321 4,345 Archie , ,331 2,129 2,143 4,272 Ellice (Includes St. Lazare) , ,913 2,057 2,153 4,210 Hamiota (Includes Town of Hamiota) , ,284 2,148 1,879 4,027 Harrison , ,996 1,533 2,404 3,937 Rosedale , ,614 1,532 2,052 3,584 Minto (Includes Minnedosa) , ,439 1,516 1,652 3,168 Odanah , ,157 1,727 1,397 3,124 Saskatchewan (Includes Rapid City) , ,573 1,689 1,237 2,926 Miniota , ,669 1,600 1,215 2,816 Clanwilliam (Includes Erickson) 80 90, ,511 1,133 1,606 2,739 Park (North & South) , ,140 1,296 1,126 2,422 Agricultural Region $1,421,744 $1,958,734 $1,626 $2,301 $3,927 Silver Creek , ,995 1,896 3,128 5,024 Russell (Includes Binscarth & Town of Russell) , ,702 1,887 2,714 4,601 Rossburn (Includes Town of Rossburn) , ,169 1,247 2,800 4,046 Shell River , ,494 1,854 1,613 3,467 Shellmouth Boulton , ,021 1,506 1,844 3,350 Hillsburg , ,353 1,363 1,709 3,072 Bridging the Property Tax Gap: The Impact of School Division & Municipal Taxes on Manitoba Farmland 32

39 32

40 Census Farms School Taxes on Farmland Municipal Taxes on Farmland Average School Taxes Per Farm Average Municipal Taxes Per Farm Average School and Municipal Taxes on Farmland Per Farm Agricultural Region $1,543,971 $1,412,783 $1,775 $1,630 $3,406 Minitonas (Includes Town of Minitonas) , ,822 2,244 1,849 4,093 Swan River (Includes Bowsman & Town of , ,918 1,626 1,492 3,118 Swan River) Mountain (North & South) , ,043 1,457 1,549 3,006 Agricultural Region 6 1,812 $2,830,725 $4,073,762 $1,491 $2,160 $3,651 Gilbert Plains (Includes Town of Gilbert Plains) , ,679 2,148 3,784 5,932 Grandview (Includes Town of Grandview) , ,540 1,686 3,129 4,815 Dauphin (Includes City of Dauphin) , ,178 1,931 2,541 4,472 Ste. Rose (Includest Town of Ste. Rose) , ,094 1,573 2,323 3,896 Mossey River (Includes Winnipegosis) , ,927 1,370 2,124 3,494 Lawrence , ,219 1,336 1,838 3,174 McCreary (Includes Village of McCreary) , ,236 1,385 1,483 2,868 Ochre River , ,198 1,250 1,471 2,721 Ethelbert (Includes Village of Ethelbert) , , ,727 2,699 Alonsa , ,495 1,261 1,178 2,439 Agricultural Region 7 2,509 $8,061,884 $7,599,233 $3,284 $3,189 $6,474 Cartier , ,002 7,954 5,794 13,748 St. Francois Xavier , ,702 5,261 4,175 9,436 Portage La Prarie (Includes City of Portage La Prarie) 460 1,937,272 1,887,835 4,211 4,104 8,315 Macdonald 304 1,498, ,639 4,931 2,772 7,702 33

41 Census Farms School Taxes on Farmland Municipal Taxes on Farmland Average School Taxes Per Farm Average Municipal Taxes Per Farm Average School and Municipal Taxes on Farmland Per Farm Agricultural Region 7 (continued) Westbourne (Includes Gladstone) , ,688 2,194 2,877 5,072 Victoria , ,167 2,701 3,446 6,147 South Norfolk (Includes Notre Dame & Treherne) , ,623 2,725 3,199 5,924 Grey (Includes St. Claude) , ,006 2,717 2,964 5,681 Lakeview , ,777 1,550 3,026 4,576 Lansdowne , ,158 1,597 2,637 4,234 Glenella , ,262 1,608 2,003 3,611 North Norfolk (Includes MacGregor) , ,374 1,964 1,274 3,238 Agricultural Region 8 3,021 $9,685,897 $8,558,551 $3,258 $3,064 $6,322 Montcalm (Includes Emerson) , ,387 5,091 4,641 9,732 Morris (Includes Town of Morris) 297 1,180,775 1,151,740 3,976 3,878 7,854 Roland , ,205 4,116 3,418 7,534 Thompson , ,533 3,066 4,212 7,278 Louise (Includes Crystal City & Pilot Mound) , ,369 3,178 3,627 6,804 Rhineland (Includes Altona, Gretna & Plum Coulee) 423 1,560,488 1,038,028 3,689 2,454 6,143 Dufferin , ,698 2,787 3,192 5,979 Pembina (Includes Manitou) , ,839 3,290 2,550 5,840 Lorne (Includes Somerset) 311 1,038, ,406 3,340 2,451 5,792 Argyle , ,436 2,218 2,459 4,677 Stanley (Includes Morden & Winkler) 430 1,146, ,567 2,666 1,499 4,165 Roblin (Includes Cartwright & Town of Roblin) , ,344 1,676 2,383 4,060 Agricultural Region 9 2,485 $6,428,003 $4,927,796 $2,879 $2,381 $5,260 La Broquerie , ,012 3,504 4,102 7,606 34