Letter: Who will pay more or less, and why?

In the May 1 Peak story [“City of Powell River Council receives financial plan details”], City of Powell River councillor George Doubt said: “If the levy for the wastewater treatment plant was not part of this year’s calculation, the increase for the average home would be 2.9 per cent, which is close to the rate of inflation.” His interpretation of the financial plan is misleading at best.

From the financial plan presented to council April 29, 2020, yes, the tax increase for the average home will be 4.7 per cent, however, the general variable tax rate will increase by 8.6 per cent (a reflection of city increased spending).

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The (new) municipal debt tax will increase the rate by an additional 2.9 per cent for a total variable tax rate increase of 11.5 per cent. So how do we get to a 4.7 per cent tax increase for the average home?

First, the flat tax reductions are revenue neutral, which means the city receives the same total dollar amount, accomplished by redistribution, the above-average-assessed homes pay more and the homes assessed below the average pay less. This adjustment will decrease the average overall tax increase from 11.5 to 6.6 per cent.

Restricting the water, sewer and garbage fees increase to zero per cent will drop the 6.6 per cent increase to the magical and much-sought-after 4.7 per cent tax increase for the average assessed home.

For those who just had a sigh of relief, saying to yourself, “I can take this for one year,” bad news, there are two additional years of incremental increases for the new municipal debt tax and two more years of flat tax redistribution followed by 30 years of municipal debt tax of six per cent plus.

The chief financial officer, in the closing comments in the financial plans of 2019 and 2020 wrote: “The city’s current financial situation is not sustainable.”

Is there not at least one of the seven council members who understands the city’s fiscal dilemma and is willing to represent all residents, not just the average,  and bring the real financial issues forward?

Paul McMahon, Invermere Court
Powell River

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