Bid to hold the line on Petrolia municipal taxes fails

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Heather Wright/The Independent

Petrolia Councillor Wade Deighton had hoped to hold the line on municipal taxes. It doesn’t appear that’s going to happen.

The town recently completed its budget deliberations and Monday brought the $7.4 million document to the public at a virtual meeting.

Taxpayers are looking at a two per cent tax increase – about $24 more for every $100,000 of the assessed value of their homes.

Most homeowners now pay taxes on what their home’s market value was in 2016. The Municipal Property Assessment Corporation has delayed adjusting the rates for the last two years because of the economic impact of COVID-19.

But real estate values have gone through the roof since then. For example, the Sarnia-Lambton Real Estate Board reported in Sept. 2016, the average price of a single family home was $232,000. By Sept. 2021, that same house was selling for $504,529.

Anyone purchasing a new or existing home will pay the tax assessment on today’s market value. Deighton says with some people’s homes now assessed around $1 million, that could mean a $15,000 tax bill.

During budget deliberations Oct. 29, Deighton wanted council to take $150,000 out of the budget to eliminate a municipal tax increase, saying homeowners will soon see their tax assessment soar because of the rising housing prices.

Council rejected the move fearing it would mean “slashing services” and opted instead to take a half per cent off the increase, asking staff to trim $30,000.

That’s despite the fact the CAO/Treasurer, Rick Charlebois, told councillors there would be no need to slash services and that any reduction in the budget would simply mean less money would go into the working capital reserve.

It was established in 2014 and now contains $4 million. The 2022 budget plans to deposit another $1.5 million into the reserve. That’s about 20 per cent of the total budget.
And that raised the eyebrows of experts in municipal finance.

Almos Tassonyi says the $1.5 million the Town of Petrolia plans to put into its working capital reserve is “large… very large.”

Tassonyi, a Research Associate, International Property Tax Institute who is affiliated with the School of Public Policy at the University of Calgary, and senior economist with the Ontario Ministry of Finance until 2011, says most municipalities add between one and five per cent of the total budget into reserves.

Only one taxpayer asked questions about the budget during the public budget session Monday, concerned about the water issues in the west end of town.

During the council meeting later that evening, Deighton tried again to have council consider holding the line on municipal taxes.

His written motion suggested cutting the full $1.5 million destined for the working reserve for a zero budget increase, but after talking with the treasurer, Deighton changed the motion to remove $120,000 from the budget. That would mean taxpayers would have the same municipal bill as last year and still put $1.3 million into the working reserve.

Four members of council, Deighton, Councillors Grant Purdy and Marty Souch and Mayor Brad Loosley voted in favour of reconsidering the budget.

Councillors Ross O’Hara, Joel Field and Don Welten – who had all expressed concern about cutting services during budget deliberations, voted against reopening the budget to lower taxes. To reopen the budget, five councillors would have to agree.

Council has one more look at the budget when it approves the 2022 document at its December meeting.