As in every other part of BC, the local region is in the throes of preparing the budget for the upcoming year. Running a city or municipality isn’t by any stretch an easy task. Trying to accurately predict how much it will cost and then collecting the right amount of money in a way that everyone thinks is fair is likely impossible.
North Cowichan is, in the local context, by far the biggest single taxing entity. Add to that the CVRD areas and the City of Duncan and this makes for a sizable annual budget with a scope of operations that has grown increasingly complex as we slowly transition from small municicpalities to an integrated region.
As the biggest piece of the local tax puzzle, North Cowichan collects a lion’s share of the regional tax revenues. At just under 30,000 residents North Cowichan is about six times as large as the City of Duncan, for example.
Most people are aware of the current budget deliberations and the ‘news’ that they are considering adding five new positions. Certainly total wages are a huge part of the underlying cost structure.
The annual budget, depending on how it’s considered, is about $50 Million. For example, for 2017, the last year for which there are published numbers the municipality collected a total of just over $53.3 Million in income, spent just over $46.8 Million, contributed $6.54 Million to the surplus and had a year end $290.6 Million in the surplus account. The question is how these numbers reflect the amount of taxes, which is the total amount money collected by the municipality from you each year for your house or property.
Taxes, as just about everyone expects, have risen over the years. Simplistically the amount of money collected from property taxes are a good starting point but don’t tell the whole story.
For example, local governments create separate ‘charges’ for water, sewer, and garbage that are outside the property tax charge. Nonetheless, they are still taxes, just taxes collected per property as opposed to based on property value. And all of those charges can and do increase over time.
North Cowichan posts the financial statements for previous years on their website. That data, which covers 2011 to the end of 2017, shows that basic property taxes have indeed gone up, rising from $26.5 Million in 2011 to $33.4 Million for 2017. Taking the $6.9 Million increase over the six year span is about $1.15 Million per year, and the total percentage increase of 26.5% averaged is 4.3% per year. The longer term average is even worse at 5.9%, as shown in the table.
By comparison, StatsCan estimates the Consumer Price Index (CPI) over the same period averaged less that 1% in Victoria, BC.
Critics point out that the spending side of the issue is what drives tax increases. Spending in North Cowichan has increased over the six-year period from 2011 ($37.5 Million) through 2017 ($46.8 Million). The increase of $9.3 Million over 6 years is $1.55 Million per year on average, or 4.1%. .
Each year the municipality makes public statements about how much taxes are expected to rise. In the local media at various times, Mayor Lefebure of North Cowichan indicated tax increases of 2.64%, 2.98%, 2.95%, 2.97%, and 2.61% for years 2014 through 2018 respectively for a five year average of 2.83%. These projections are well below where the actual increases ended up at. Far from political misstatements, this discerpancy is a reflection of the budegting process and spending controls.
Whatever the reason, it seems that the actual tax increases are consistently higher than politicians say. That may cause worry for North Cowichan residents when politicians are publically saying the increase will be between four and seven percent, an already high historical number.
All of this might leave taxpayers wondering what the actual increase will have been when we find out next year.