Friday, August 30, 2013

Are Tax Increases Affordable In Nanaimo?

What Is An Affordable, Sustainable Tax Increase?

At the committee of the whole meeting on Aug. 29 city staff presented council with an explanation of an new process which is being developed to assist staff with preparing the financial plan for the city of Nanaimo.

It will be interesting to see how this exercise unfolds over the weeks and months to come as it seems that both city council and city staff are in the process of inventing a whole new approach to how to arrange the citys' finances.

At the end of the meeting I asked the new city manager, Mr. Swabey how the city went about determining what is an affordable, and sustainable level of tax increases. Given there is at least another 20% tax increase coming over the next five years I was curious how the topic of affordable and sustainable was determined.

The answer Mr. Swabey gave was that the question should be addressed to city council, as it is them who determined what is an affordable and sustainable level of taxation. I have now addressed that question to our Mayor and each member of Council and look forward to their replies which I will post here as they respond.

I suspect using the results of the recent Ipsos Reid survey will be used to support the idea the majority of taxpayers are happy with how things are going now. That survey of course is arguably flawed given sample size and the fact they only use a 4 point response option. Even at that however, nearly 40% of those surveyed said they did not wish to see their taxes increased at all, and some said they were willing to take a reduction in services to lower their taxes.

If you ask a person making $75,000+ per year who can expect another 2% pay increase, if they are concerned about a 4% property tax increase, the response might greatly differ from the person on a fixed income or employed in the service sector in Nanaimo.


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