A failure in tax reform
Re: School taxes on residential property and community sustainability
I am writing to express my total concurrence with Bob Barnett's editorial of 19 April 2002 in which he expressed the view that "the (property) taxation issue is at the heart of sustainability" for the community of Whistler, as well as with Alison Taylor's article and Paul O'Mara's and Eileen Tomalty's comments on this subject, published on 15 March, 2002.
What I would like to do is add some comments and detailed information that might throw further light on the inequities in the school tax system as presently administered by the provincial government and some recent changes attempted in order to grant some relief with respect to residential property.
Not a School Tax per se
The first and most important thing to note is that it is no longer a tax system that directly supports the local school district where the taxes are collected. It is simply a provincial tax levied on residential properties throughout the province and the proceeds go into the province's Consolidated Revenue Fund. The total amount of these taxes to be collected and the rates to be applied are not fixed by legislation but are set annually by an administrative act of the government without debate in the Legislature. They have the arbitrary power to set different rates of tax in separate school districts (there are 59 in B.C.), and even to set different rates for separate communities within the same school district. These school district boundaries are really meaningless and the tax is a "school" tax in name only.
Home Owners Grant as Part of the Tax System
The next most important thing to note is that the Home Owners Grant ("HOG") is given by the province as a credit against school tax levied on permanent resident homeowners, much like the Basic Exemption in the Income Tax system. It effectively means that at grants of $745 for seniors and disabled owners and at this year's mil rate of 2.8910 mils set by the province for the Howe Sound School District, the first $257,700 of their home assessed value is not taxed. For all other homeowners, their grant of $470 means the first $162,500 of their assessment is exempt. However, this exemption is denied to and taken away from permanent resident owners whose assessments exceed $525,000. No similar removal of a basic exemption is found in the income tax system and this serves only to dramatically increase the proportion of tax born by higher assessed properties.
In Whistler the average single family home assessment for permanent resident owners is estimated at approximately $650,000, meaning that well over half of these owners who live and work in Whistler are denied the benefit of the HOG, at a savings to the province of over $600,000 in total annually. The total of the grants that were allowed in Whistler came to only $578,106 in 2001. By comparison in Squamish, where the average single family assessment is $191,376 this year, virtually all the permanent resident owners receive the full HOG, totalling $1,790,201 in 2001.