Monday, December 12, 2011

Property Tax Penalties, Numbers separating the facts from the BS.

The bs on this property tax penalty issue gets deeper and deeper.


First of all I will start out by saying yes everybody should pay their taxes on time, their bank payments, credit card bills, utilities etc, in a perfect world they would. This world is far from perfect and that’s why all of the above get to charge you interest on the outstanding balance on your account.

I quote from Councilor Gallants blog. “Our Director of Finance and Systems confirmed that over half of the total is residential homes and businesses, while the remaining 46% or so is attributable to land developments and other parties.”

So I said 50% they say 46% not much of a difference. I do not know of anybody that’s saying almost all these back taxes are tied to one developer.

So do you think this penalty will have an impact on the 46%? No, they will just owe more. Out of the other 54% I expect most of the businesses will clean up their accounts so who will the 50% penalty impact? Residents who find themselves in the unfortunate position of not being able to pay their taxes.

Some people are still talking about the previous penalty being one of the lowest in the province at 10%. It was not 10%, it was 10% on June 30th and another 10% on January 1st which compounds to 21% annually.

Now we can be proud we will have one of the highest rates in the province.

So let’s talk about numbers under the old tax penalty a home owner that did not pay their taxes for three years on a home with a annual tax bill of $1800 would by the time their home went to a tax sale owe $8002 of which $5400 would be back taxes and $2602 in penalties

Now that same home owner will owe $13253 of which $5400 would be back taxes and $7853 would be penalties.

That’s a whopping $5251 difference in penalties!

I hear the line that people not paying their back taxes is putting pressure on the municipality to cut services due to shortfalls in revenue, what a crock. Last year the budget for taxes was $6,439,407 how short was the municipality on its tax revenue? Not one penny $6,765,427 came in $326,020 more than anticipated.

Fact over the last six years $34,407,633 in tax dollars was budgeted to come in, the actual dollars that were collected $34,806,978.

Then I hear the line people are investing their money elsewhere instead of paying their taxes (its getting deep now) according to the Globe and Mail today the top paying mutual fund in Canada over the last 12 months was the “Canadian Long term fixed Income Fund” that gained 12.69%.

Can you imagine all the conversations around the Pass the last year that went like this “Martha lets not pay our taxes this year and incur the 21% penalties, instead we will take that money and invest it in the Canadian Long term fixed Income Fund we could be making up to 12.69%.

Then I hear the line “the taxpayers that do pay on time are being penalized by these people that owe back taxes”. That is not the case, every tax dollar that was projected to come in over the last six year came in and more.

Second if you look in the municipalities audited financial statements they have collected $385,993 in penalties in that timeframe. The municipality every year budgets under revenue for an average of $55,000 to come in from penalties, so if these dollars are not there where do you think that revenue will come from?

Yes your right the rest of us will be penalized.

The present system works every year somewhere around 3-5 taxpayers are threatened with a tax sale out of 4500 tax notices that go out. Less than one tenth of one per cent.


Note: If you disagree with the penalties you can do the following:  

Phone Marion Vanoni at 403-562-8833 or email her at finance@crowsnestpass.com.
Or phone the municipality and ask for a list of the council members phone numbers and give them a call.


The call you make today may well reflect on what tax increases you see this coming June, I have always said politicians love nothing more than silence.  

19 comments:

Anonymous said...

The big question that people should be asking is how much did we spend on transitional solutions for all those months.
Especially when we find out that we had a CAO sitting down stairs for all that time.
Any update on the fire department or is that going to be like the consolidation of the two shops?


Larry

Anonymous said...

Hi

Did anyone attend the council meetings where this was discussed? Just wondering what administration advised concerning this. Where they the ones pushing for the increase or did it originate from council?

Anonymous said...

Hi

Tim Hortons gossip this morning sounds like the new shop in Blairmore is not going ahead.

Sad I remember the time we had at least three car dealerships on main street. I remember M+M motors it was where Rexall is now, there used to be a body shop right across from the Greenhill in the present day extra foods. I didn't think main street looked that bad back then. At least it was busy and vibrant.

Anne

Anonymous said...

You know I looked at the picture in the Herald yesterday. That building looked good, the municipality could have put a limit on what he could park there.
Then enforced it. Especially with us having two bylaw officers soon.

Anonymous said...

Take a read of saindon's blog and his attitude in his comments.

There goes another business that the Crowsnest Pass could have used.
Maybe they would have made a contribution to our indoor swimming pool!

Anonymous said...

I beleive this is being done as a short term solution.Change the penalty, people pay up and you have another million dollars to spend before increasing everyones taxes.However in the long term you lose the tax penalties and you must increase taxes to cover the lost revenue.I wonder how many houses or businesses have actually been foreclosed on due to unpaid taxes?
The fact that just about everything is being voted on 7-0 on these major issues worries me the most.I find it very hard to beleive that 1-2 or more councilors do not think this is a bad idea. If we went to the polls tomorrow I would not vote for any of these sheep.

Anonymous said...

Well another business pushed away fron the Pass. Looks like a bright future ahead.

Anonymous said...

Well Dean, based on my email exchange today with Councillor Gallant who informed me he will not be posting my comment to his blog, and basically to take a walk... "council has made a decision and the matter is closed". I think it is clear that we now have at least one member of council who is closed-minded to a fault, and incapable of entertaining different viewpoints, never mind admitting when he is wrong.

Admitting when you are wrong after your arguments have been shattered (good work, Dean) by doing the right thing takes courage and moral integrity, not doing it demonstrates arrogant wilfulness bordering on meanness. What this community needs in its leaders is more of the former, rather than the latter, but sadly not from this councillor.

JP

Anonymous said...

I just dont get it. I thought credit card companies loved people who do not pay off their balance at the end of every month, therefore collecting interest payments.
So in comparison, the municapality is trying to force people to pay on time instead of being smart and collecting the interest.
The only thing I can think of is that this is a one time tax grab to cover their butts.

Well, you all asked for change and that is all what you will have in your pocket when these guys are done.

Crowsnest Pass Home said...

At last night's G+P meeting the Finance Officer reported that revenue for 2011 will exceed Budget.

Anonymous said...

So what has changed? Did spending go down? Or where did the extra revenue come from?
Or are they already counting the million dollars from unpaid taxes?

Anonymous said...

Do you even know what you are talking about any more Dean? You are all over your blog and mine acting as an ‘apologist’ for administration and council telling people the cupboards are not bare, yet you keep writing about all this hiring, bankrupting the municipality, and/or where is the money going to come from to pay for all these new employees?

Obviously it’s coming from the poor and downtrodden in this community by way of their rushing through (under-handededly, I might add - see this week's Promoter's editorial) the Property Tax Penalty Bylaw which is being fast-tracked to take effect at the end of this month. Short notice, rush job, would be an understatement which suggests they are strapped for cash and desperate.

In addition, you know yourself that for years now this municipality has to borrow money at this time due to not having sufficient reserves (like most well run community's have) to carry then over until the 2012 property tax revenues come in, next June.

Why you are buying into what Marion is telling you is beyond me? Are you that gullible? Well paid salaried employees living in a bubble who have obviously forgotten their roots (as in this case) are skilled at presenting to mayor and council what they want and expect to hear, while at the same time BS the public that their affairs are in good order. Isn’t that exactly what we had with the Irwin regime? Only to find out what we had been told was far, far from the truth? Sounds to me like it is déjà vu, all over again.

As a final note on your comment ... “At last night's G+P meeting the Finance Officer reported that revenue for 2011 will exceed Budget.”... 2011 ends in two weeks, what about 2012???

JP

Crowsnest Pass Home said...

Do you even know what you are talking about any more Dean? You are all over your blog and mine acting as an ‘apologist’ for administration and council telling people the cupboards are not bare, yet you keep writing about all this hiring, bankrupting the municipality, and/or where is the money going to come from to pay for all these new employees?


Response--John I would like to understand where you feel I am acting like an ‘apologist’ for administration and council? What I do understand is after sitting on council for six years the financial situation of this community. The point I am trying to make again and again is this community does not have the where with all to sustain all of what these guys are doing in the future without a significant increase in their revenues (which means we will all pay, in the form of franchise fees, tax penalties, tax rates etc."



Obviously it’s coming from the poor and downtrodden in this community by way of their rushing through (under-handededly, I might add - see this week's Promoter's editorial) the Property Tax Penalty Bylaw which is being fast-tracked to take effect at the end of this month. Short notice, rush job, would be an understatement which suggests they are strapped for cash and desperate.

Response--"Eventually the vast majority of the dollars will come from the poor and downtrodden, I did read the report of the affordable housing committee and know full well what the demographics of our population are. In February the preliminary numbers on the 2011 census come out you will see despite all the hiring the mines have done the numbers will not have changed much from 2006. For the sixty percent of our population that is over 50 on a fixed income or facing that situation in the next 10 years. This community is becoming less and less affordable. This community cannot just keep turning to the old practice of raising taxes, franchise fees, user fees etc etc."


In addition, you know yourself that for years now this municipality has to borrow money at this time due to not having sufficient reserves (like most well run community's have) to carry then over until the 2012 property tax revenues come in, next June.


Response--"The last two years I was on council the line of credit was not used we forced the administration to live within its means, that’s why the last budget we put in place both a hiring and over time freeze. What was incredible the operation of the town did not come to a screeching halt and we managed to start rebuilding the reserves by putting $450,000 back in plus we also paid cash for equipment that was required that year."

Why you are buying into what Marion is telling you is beyond me? Are you that gullible? Well paid salaried employees living in a bubble who have obviously forgotten their roots (as in this case) are skilled at presenting to mayor and council what they want and expect to hear, while at the same time BS the public that their affairs are in good order. Isn’t that exactly what we had with the Irwin regime? Only to find out what we had been told was far, far from the truth? Sounds to me like it is déjà vu, all over again.

As a final note on your comment ... “At last night's G+P meeting the Finance Officer reported that revenue for 2011 will exceed Budget.”... 2011 ends in two weeks, what about 2012???


Response--The point I was trying to make there John is the people that are trying to justify the tax penalty are arguing that the delay in residents paying their back taxes is causing financial problems for the community. The CFO clearly showed that is not the case therefore one less argument to justify those penalties."


JP

Anonymous said...

Dean, I think we have had a case of miscommunication, in that I interpreted your comment “At last night's G+P meeting the Finance Officer reported that revenue for 2011 will exceed Budget.” to mean something quite different from what you intended in your last paragraph above.

On the point of "one less argument to justify those penalties” it appears at this time they are fresh out of arguments while also feeling no obligation to justify their past and on-going actions, and have now gone silent, closed mouth sort to speak, resorting to saying nothing at all on this matter, as per Councillors Gallant and Saindon’s blogs in response to my comments there.

These guys think and behave like they are demi-gods answerable to no one, unless they personally appear before council. The way things are going they might soon get their wish. Maybe more than their little council chamber can handle?

JP

Anonymous said...

I am thinking in such a small place like this, that a business already here could probably have an influence on council's decision - probably a relative or friend.

Anonymous said...

Dean

I think the comment on John Prince's blog is 100% accurate.
These guys "know" that the River Run Vistas investors (well they didn't know prior to the meeting if you read their blogs)will be approaching the town with. Lets make a deal on the back taxes and we will build ??? units on the River Run property then you will be able to tell the doubters that the "Strategic Plan" is already working. Plus the additional penalties mean further bargaining power.

Mel

Anonymous said...

According to the NOTICE in the Promoter, Dec. 21 p.5:

"An average $2500 property tax amount due on December 31, 2011 will have penalties of approximately $1,443.00 of penalties applied in 2012."

The Bylaw 836, 2011 - Property Tax Penalities [sic] takes effect on March 31, 2012 and imposes a 2% per month penalty. Over nine months of 2012, this is not anywhere near $1443.

To come up with this large number they must be thinking of applying these penalties retroactively to 2011 or previous years.
IANAL, but I think there may be legal issues with that, so the tax bonanza may be much less than they are counting on.

BTW, 2% per month compounded is 26.8% annually. I can't see how they get 52.19% .

Anonymous said...

The math is correct and it is not retroactive.The old bylaw stays in effect until March, so a 10% penalty on Jan.1st.2%/month starting in April and 20% penalty on July 1st.
The 52.19% annual penalty under the new bylaw is also correct, 20% July 1st and 2%/month for 12 months.
Mafia type rates by our council to gain in the near term and lose out in the long term.Shame on them.

Anonymous said...

Anon @7:22

"Mafia type rates," is right. You mark my words. This council will be a one-term council, as this sinister 'tax grab' of theirs on our poor will hang around their collective necks like an albatross.

JP