March 04, 2008
By Jeff Nagel
BC Local News
TransLink mulls property tax hike
TransLink's unelected board will deliberate in secret on whether to raise residential property taxes to help businesses shoulder the burden of an expected tax hit.
At issue is how to raise an extra $18 million each year that TransLink no longer gets since the province eliminated its ability to levy a parking stall tax that the business community fiercely opposed.
The newly remade TransLink has the power to increase property taxes to make up for that lost revenue, and it had been expected the special replacement tax would only apply to business, industrial and utility properties.
But the same business leaders who campaigned against the parking tax are now lobbying TransLink to collect some of the money from homeowners as well.
"TransLink has the ability to place the tax on all sectors," said Ted Williams of the Park the Tax Coalition. "That's what we're hoping they'll do – the broader the tax, the better."
If the idea is backed by the new appointed directors – many with ties to business and industry – homeowners may have to pay roughly seven per cent more in property tax to TransLink this year.
For a $500,000 home, that means paying $197 in TransLink tax this year, up from $184 last year.
Business, industry and utilities (which together pay $115 million per year in TransLink property tax) would also pay seven per cent extra.
But if TransLink sticks to the original plan of exempting residential property (which accounts for $130 million), the business sectors face a 15 per cent property tax hike in order to raise the entire $18 million themselves.
Any plan by TransLink's board to increase taxes will still require the approval of the Mayors Council on Regional Transportation.
Surrey Mayor Dianne Watts, who chairs the body, said the mayors passed a motion at their February meeting opposing any increase in residential property tax to make up for the loss of the parking stall tax.
She said the issue has been referred to the TransLink board for recommendation.
"It really left TransLink in an awkward position," Watts said of the forced dismantling of the parking stall tax. "We're left holding the bag trying to find $18 million."
The residential exemption was recommended by the province's TransLink review panel and included in last spring's first draft of TransLink reform legislation (Bill 36).
But business groups then lobbied finance minister Carole Taylor and the final legislation (Bill 43) was altered to give TransLink the option to put the tax on residential as well and collect the tax in whatever proportions it wants from each group.
The TransLink board meets March 28, and will be open for one hour of public delegations before the meeting is closed.
But before the public is heard, several business groups will privately meet TransLink board chair Dale Parker on March 13 to press their position on the parking tax replacement.
They include the Vancouver Board of Trade, the Vancouver Fair Tax Coalition, the Business Council of B.C., the B.C. Chamber of Commerce and groups representing manufacturers, road builders and construction firms.
"We feel it should be equitably spread over all transit riders and transit users," said Bob Laurie, a Vancouver Board of Trade director and co-chair of the Vancouver Fair Tax Coalition. "Commercial properties are not the only ones that will use these services."
Laurie said the region's mayors are being "grouchy" and can expect a fight from business if they block the tax from applying to homeowners.
"They've unwittingly poured gasoline on themselves and we've got the matches," he said. "Why should the neighbourhood businesses be burdened with all that tax?"
It won't be the first time Vancouver Board of Trade reps have met with Parker.
The organization had a significant hand in selecting the TransLink board, holding one of five seats on the screening panel that vetted TransLink director candidates.
Watts said area mayors are also alarmed at the prospect of more property tax hikes in the future to fund TransLink improvements.
The province gave TransLink the power to collect an extra three cents a litre in fuel tax, but that is conditional on the new fuel tax revenue being matched by an equivalent increase in property tax, as well as from fares and other sources.
"There's an expectation from the provincial government that property taxes are continually being used for transportation," Watts said. "What we're saying is we're already paying through property taxes. You can't keep increasing them."
Impact varies around region
Replacing the defunct parking stall tax is a complex issue because it splits the business community and local cities as well.
The parking stall tax hit major shopping centres and other areas with lots of parking the hardest – particularly in the outer suburbs.
But a shift of the revenue it generated back onto business sector property taxes suddenly brings relief for car-friendly suburban retailers, but major pain for businesses with relatively little parking on high value land – particularly hitting the City of Vancouver.
Businesses in places like Coquitlam, Langley and Maple Ridge would collectively pay about half as much in replacement property tax (with residential exempted) as they did through the parking stall tax.
Vancouver businesses, in contrast, would pay about twice as much.
Parking tax lasted two years
The parking tax was collected in 2006 and 2007 until transportation minister Kevin Falcon ordered it scrapped as part of the TransLink overhaul.
Before its adoption TransLink struggled to find a new revenue source after a provincial pledge it could impose a vehicle levy was withdrawn.
The former TransLink board first wanted to increase the sales tax it collects on paid parking lots. But protest from Vancouver – home of most paid lots – led it to instead create the parking stall tax, applying to all parking areas, not just paid ones.
Advocates said it sent a green message – encouraging businesses to locate in transit-oriented corridors rather than more car-dependent areas.
Businesses said it was punitive and applied inconsistently and unfairly.
Administering the tax proved expensive, costing TransLink $6 million. |
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