Like a predictable movie, council unanimously approved the 2019 budget Friday, pushing municipal spending to an all-time high and tagging rural ratepayers with 86% of the costs for services shared with Wawanesa.
In doing so, Oakland-Wawanesa councillors ignored petitions and requests from residents for a fair tax solution. But they promised to try harder next time. At least, a few did.
The new budget sets the rural mill rate at 5.060 and the Wawanesa mill at 6.337. At Large is 5.085.
Municipal spending will increase by over $200,000 this year, a 9% hike from 2018. That’s a big increase, when you consider that inflation is less than 2%, but it’s a familiar scene in Oakland-Wawanesa. The amalgamated council has hiked spending 29% since 2015, thanks to a windfall of tax dollars from rural property.
What’s In The Shadows?
Differential mill rates are still being used in 2019, with separate rates for Oakland, Wawanesa and shared spending. But a harmonized tax is lurking and it won’t be good for rural ratepayers.
Under the current system, taxes from rural and village pay for appropriate services in the appropriate district. Shared services are paid by At Large taxes, which come from both Oakland and Wawanesa. Council sets separate mill rates for all three.
A harmonized tax would do away with separate mill rates, tax rural and urban landowners at the same rate and throw all the money into one big pot.
This is critical because rural tax dollars already offset services enjoyed by village residents. Currently, Oakland pays 86% towards shared services with Wawanesa, despite having only 65% of the municipality’s population.
By harmonizing mill rates, council will shift even more municipal expenses onto rural taxpayers. Oakland’s 86% split of shared services costs will grow into an 86% share of ALL budget spending, except special levies.
Wawanesa council members have been pushing for a harmonized mill rate since 2015. Expect to hear more in the coming months.
No Heroes in this Scene
The 2019 budget faced opposition: a 200-person petition demanding shared costs be taxed according to population rather than property tax values; and my request to delay the budget until new councillors are elected on June 20. Both were dismissed.
I spent an hour with council on Friday, lobbying for a fair tax solution. I estimate that Oakland residents are contributing an extra $139,872 towards shared services in 2019, simply because rural property is worth a whole lot more than village property.
Council members defended the imbalance, defaulting to property value as the yardstick for measuring how much a resident should pay for municipal services.
While convenient for council, I think we perpetuate a problem by using property values alone to determine a fair price for services.
Here’s an example I used in my presentation to council. When I go to the movie theatre in Souris with my friend, we each pay $5 to see the show. That’s the price of service. If I go with Head of Council Dave Kreklewich, he wants me to pay $8.60 while he pays $1.40. Every time.
There’s no 50-50 sharing of shared costs. It’s not even shared 65-35 based on population. It’s 86-14 because rural property is worth more in Oakland-Wawanesa.
Using this principle, council has increased taxes paid by rural residents nearly 40% since amalgamation, while cutting corresponding taxes in Wawanesa more than 20%.
Thumbs Up, Thumbs Down
Yes, the 2019 budget lowers mill rates for rural residents by 4%. After large tax hikes in the previous four years, that’s something to celebrate, although the true saving will be reduced by higher property values and not every rural ratepayer will actually see a drop in their tax bill.
More importantly, the new budget does nothing to address the imbalance between rural and village paying for shared services. One councillor raised the idea of creating service districts to fund municipal contributions for recreation, but that’s a discussion for 2020.
With higher spending, rural still paying significantly more than village towards shared services and harmonized taxation delayed for another year, Budget 2019 has no new twist or surprise ending.
Regards,
-Glen