No matter which way the Hamilton tax pie is sliced, Flamborough residents are going to pay more when the area-rating question is resolved.

That message was clear following a presentation made Tuesday by Hamilton’s general manager of finance Rob Rossini to upwards of 30 guests at a breakfast meeting co-hosted at Dutch Mill Country Market by the Flamborough Chamber of Commerce (FCC) and the Rotary Club of Flamborough A.M.  

Rossini outlined a city staff proposal recommending an urban/rural split that recognizes the different levels of municipal services offered to people living in built-up as opposed to rural areas. If such a model is adopted by city council, urban Flamborough residents would face a 1.7 per cent property tax increase in each of four years beginning in 2011 and their rural counterparts, a 0.3 per cent increase each year. Overall, that means a seven per cent increase for urban Flamborough residents and a one per cent increase for rural residents. Hamilton residents would see a decrease of three per cent.

While members of the audience didn’t challenge those numbers, they pointed out how they fail to represent the whole tax picture. FCC executive director Arend Kersten noted that the proposed tax increases in the urban/rural split are based on homes valued at $219,000 while the average value of homes in Flamborough is about $290,000. Rossini acknowledged that the dollar amounts for the taxes would increase based on higher home values.

A local businessman noted that Flamborough has already been burdened with significant tax
increases in the years since amalgamation with Hamilton and any new increases merely cause further resentment. Another man said that while the 1.7 phased-in increase isn’t huge, the regular yearly tax hike on top of it will result in a significant increase for homeowners. He said he expects to pay an additional $1,000 in taxes over the next four years.

“It’s 1.7 (per cent) plus plus,” Rossini said, noting that regular tax increases as well as adjusted home values through Current Value Assessments (CVAs) conducted every four years impact the overall tax picture.

Another Chamber member suggested that while she understands why the city must look at increasing its revenue streams, the same amount of effort should be placed on achieving cost efficiencies from within.

City manager Chris Murray, who accompanied Rossini to the meeting, said the city is looking at consolidating services where it can and within three months, he plans to complete a study on how to institute savings and efficiencies across city departments.

Both Rossini and Murray conceded that the city faces some stiff fiscal challenges ahead. “Taxes in Hamilton are high,” Rossini said, explaining that local taxpayers are known to be among those who pay “the highest property taxes as a percentage of household incomes.” Murray said 6.1 per cent of household incomes go to pay property taxes. A lot of the tax burden has shifted onto residential taxpayers because of a shrinking industrial base in Hamilton, Rossini noted.

The finance manager said it’s important for the area rating issue to be resolved because “we want to make sure service delivery more equitably drives taxes and it’s not the other way around.” In other words, people will pay taxes depending on the level of services they receive rather than what suburban municipality they reside in.

City staff has recommended that culture and recreation services cease to be area-rated and that street lighting and sidewalks be added to the list of area-rated services which also includes transit and fire services. But no decisions on changing the system will be made until after the municipal election in the fall. In the meantime, a soon-to-be-formed citizens’ forum will study the issue through increased public consultation and report its findings to council in November.

Council will make the final decision on the issue with the revised policy coming on stream in 2011.