May 10, 2019
RE: Industrial Tax Rate Discussion
Dear Kamloops Mayor and Council:
The Kamloops Voters Society (KVS) is concerned with the City’s on-going plan to alter several long-established tax classifications and effectively shift a portion of industrial property taxes (Class 4) onto residential taxpayers.
The agenda of the City of Kamloops Finance Committee meeting for May 13 shows that industrial tax rates will be getting a critical second look, with further changes anticipated. City planners are proposing to change the rules in order to diminish taxes on heavy industrial properties by further lowering the rates.
As well, it is being proposed that any future increased revenue gathered in the existing utilities category (Class 2) be given over directly to the industrial category, bypassing potential relief for homeowners and other taxpayers, or utilizing for City services.
This is significant because it is estimated that the Trans Mountain pipeline, if it proceeds, would contribute upwards of $1 million in new taxes to the City. But this new revenue would apparently be used for the sole purpose of further reducing the amount paid by heavy industry, rather than helping all city taxpayers in an even-handed way.
The KVS would like our concerns, as outlined in this letter, to be entered into the record and considered by the Finance Committee during their review process on Monday.
In total, the City is looking to reduce heavy industrial property tax by a further $2 million in the coming years and shifting this amount to residential homeowners.
Such an adjustment will result in an increase in general municipal property taxes paid by City residential property owners by over 2.5% to cover the shortfall. This is in addition to the typical 2% to 3% average annual increases that residential taxpayers have experienced in recent years to cover what the City calls “escalating costs.”
If this approach to taxation proceeds in our City, it will remove an estimated $2 million of disposable income per year from household pockets, most of which would be spent in the local retail business sector. It will also target those residents on limited and fixed incomes the most severely.
In reviewing council documents, it appears that this proposed move is an update from previous discussions in 2017 in which the goal was to demonstrate a need to reduce industrial tax rates in Kamloops.
To make this argument, the average industrial tax rate of 12 selected municipalities is compared; however, among the twelve selected by staff, five cities collect no Industrial taxes because they have no industrial businesses in their communities.
Further, only three of the sample cities have similar economic structures as Kamloops. This leaves well over half of the samples with artificially low industrial tax rates or comparisons to cities who have very different and unrelated property tax structures.
Please be aware that the KVS is opposed to the unfair changes to tax categories now being considered, as we believe they will be harmful to Kamloops homeowners and other taxpayers. We intend to pursue our concerns through a public campaign to educate and inform Kamloops voters about this issue.
Board member, Kamloops Voters Society