After spending almost 40 years dealing with property appraisal, assessment administration and tax policy issues the Regional District of Okanagan-Similkameen’s new tax on all of us is flawed.
As a past-president of the International Association of Assessing Officers, I strongly recommend every resident of the RDOS oppose the quiet introduction of this bylaw for the following reasons:
1. One letter to the editor recently stated $170,000 would be raised from Penticton. The actual amount is $230,717 and adds almost one per cent to Penticton’s property tax rate in 2017. Full disclosure is needed instead of saying it’s only $10 to $14 per parcel. Very little information is on the RDOS website about the Alternative Approval Process. Aren’t there are better ways to build public support and acceptance of new taxes?
2. With little public information and reporting taxes being capped at the greater of $450,000, or, $0.0372 for every $1,000 in assessed value — there are professional reasons to oppose the tax
Taxes can increase annually based on new construction and increases in market value. It is wrong, against best practices and good tax policy. Using tax rates to drive taxation is not condoned by professional, internationally recognized property tax policy standards.
The world leading International Association of Assessing Officers publishes the Standard on Property Tax Policy with best practices for “rate-driven” versus “budget-driven” taxation systems. Taxing authorities that use rate-driven systems are “able to hide windfalls they may reap by arguing that they did not increase the rate of taxation. Rate-driven property tax systems fail to meet the test of open and visible property taxation.” (See http://www.iaao.org/media/standards/Standard_on_Property_Tax_Policy.pdf)
Good property tax policy relies on budget driven systems where tax rates increase or decrease with changes in assessed value due to new growth or fluctuations in market value.
3. This new tax is supposed to leverage funds and grants from other levels of government. The formula on how new funds will be used fairly and equitably has not been stated for any of the affected areas and there are at least three that won’t participate.
I reviewed the working documents. Calculation details are stacked against municipalities by weighting non-residential assessments with factors in excess of 300 per cent. Putting professional standards, best practices and good policy aside is not good.
The right thing to do is abandon the bylaw, rethink it and then do it right the first time.