Recent letters to the editor concerning Oak Bay’s finances seem to warrant our attention.
Each year the municipality includes a budget summary with our property tax notice. The magnitude of the budget increase is clear and the incremental tax burden for an average residence is highlighted. Viewed in isolation the impact generally looks modest; across time the impact is less benign.
Between 2008 and 2014 the municipal share of property taxes increased from $16.5 to $21.3 million; this represents a compound annual growth rate of 4.4 per cent.
This growth rate is more than double the annual growth rate for taxes collected by the municipality on behalf of others (e.g., schools, CRD); it is two to four times greater than the annual percentage change in Victoria’s consumer price index as calculated by Statistics Canada; and, it is about 1.7 times greater than the annual compound growth in Oak Bay households’ median after-tax income as reflected in available census data.
At the 4.4 per cent growth rate, which does not reflect accelerated budget growth in 2015 and possibly 2016, taxes collected by the municipality will double in about 16 years.
Although the impact will not be uniform across households it is fair to suggest that a 50-year old could experience a doubling of property taxes by retirement and a further doubling by the time he or she is 80. I expect my 2016 property tax notice will firmly establish this trajectory for my property. And this is before we add the cost of sewage treatment.
We live in an incredibly small community (10 km²). Crime rates are amongst the lowest in Canada, there is no developable land to speak of and our population is, based on estimates by BC Stats, at a 15-year low.
No evident community characteristic suggests growth except the municipal budget. Perhaps concern about the budget trend is ill-founded or maybe the trend is unavoidable. Conversely, maybe the budget growth rate needs to be halved to better align with inflation trends, income growth etc. In any event, more engagement around municipal spending seems necessary.