After having this conversation with dozens of residents since the budget was passed on March 25th, I thought it best to turn my response into a post. For those wondering about the impact of the 2015 tax increase on their household budget I offer the following.
At the outset, it is important to note that the approved 3.55% levy increase is (in itself) not a tax increase. Rather it is a budget increase that will affect individual property owners differently. The 3.55% is the council approved increase to the City’s Operating Budget from 2014 ($200M) to 2015 ($207M). How this increase is now dispensed and collected across the 55,000+ households and 2,000+ businesses in Guelph is a separate discussion which I’m happy to examine.
Note: To read my thoughts on the budget increase please click here www.ward1guelph.ca/2015/03/my-thoughts-on-the-2015-tax-supported-operating-budget
Unlike provincial and federal income taxes, municipal property taxes are based largely on assessed value and growth (not income). How this impacts households differently is the fact that in Guelph, property types are appreciating at vastly different rates. For example, with a Guelph housing market starved of single and semi-detached homes (stemming from the Places to Grow Act), these desired properties are appreciating much faster than others. As a result, while many Guelph residents are still seeing increases above inflation (>3%), others have been incurring significantly higher tax increases in recent years (6%-8%). In many cases this has equated to $300-$450 annually. So while some have stated the tax increase will only mean a “cup of coffee a week” for them, I’ll remind those people that for many Guelph families, seniors and young homeowners the 3.55% will demand real sacrifice. Further, for fixed and low income homeowners (the demographic most vulnerable to sudden spikes in inflation), the combined tax levy (3.55%) and water use (4.1%) increase may finally represent the financial tipping point between the pride of home ownership and a forced return to renting. It is these realities that make controlling the costs of living in Guelph increasingly important. Because while the 3.55% increase will mean something different to everyone, the resourcefulness needed to absorb it (i.e. a tax increase that once again outweighs the average increase in family incomes) will be a common burden placed on all Guelph households.