THE TERRACE and District Chamber of Commerce asked city council to lower business taxes and cut $403,729 from its budget yesterday.
At a city budget meeting last night, chamber vice president Gordon Stamp-Vincent said businesses are being disproportionately taxed compared to residences based on rising and falling property values.
This came after a draft budget showed the share of business property tax increased 6.3 per cent compared to residential which decreased 2.3 percent. Despite this, said Stamp-Vincent, residential assessment values have risen and business values have dropped.
For 2012, the business category is to pay $27.77 in taxes on a $1,000 in value while last year it paid $26.12/$1,000. The residential category is pay $6.58/$1,000 compared to last year’s $6.73
Both classes represent the lion’s share of property tax revenue for the city.
Stamp-Vincent began his plea by acknowledging that businesses pay more tax because properties are revenue-generating.
But business property assessments have fallen 4.4 per cent since 2010, he said.
“Since values are dropping and since these properties are essentially valued on income generation, the capacity to pay is reduced,” he said. “The ability to increase prices because of a property tax are almost nil.”
The remedy as proposed by the chamber involved making the amount business paid in tax per residential dollar the same as in 2011, which means reducing this year’s budget by $403,729 and striking a task force to look at an appropriate balance of business and residential tax share.
“I always say to people we can do anything you want, what would you like to cut?,” asked councillor Marylin Davies in response to the request. “How many groups do you say no, sorry, there’s no money for you?”
“The city of Terrace is pretty lean in all departments,” added councillor Brian Downie.
“You’re the council, you set the priorities,” said Stamp-Vincent. “We’re saying, there’s a problem with the business community(‘s tax rate).”
At the meeting’s end, council left tax share proportions as they were.
Other proportions include utilities, which rose 13.3 per cent, major industrial rising 3.1 per cent, light industrial rising 4.8 per cent, recreation and non-profit rising 10.1 per cent and farms which decreased 10.7 per cent.
But none of it is final.
The budget won’t be made final until spring, and in the meantime a public meeting about the budget will be held at city hall Monday March 12th at 7 p.m.
Editor’s note: This story was amended from its original published online version. It was done so to clarify when Gordon Stamp-Vincent says there is a problem with the business community. He means there is a problem that exists within the business community due to its share of property taxes.
