Cause and Effect

Blaming property tax increases on annexation is like blaming your neighbour that your garbage wasn't picked up from the curb.

Annexation may lead to higher costs for residents (more on that later).
It's a chicken-or-egg question...what came first?

Annexation and higher property taxes aren't mutually inclusive; they remain independent.

A letter to the editor of the Morning Star yesterday, entitled Annexation comes with a cost, detailed a family's long-term residency and how their property taxes have steadily increased, naming the culprit the City of Vernon, which annexed the Okanagan Landing area back in 1993.

Yes, he's likely correct that annexation in this case resulted in property tax increases.
Chiefly because the City of Vernon is just that...a city, with no rural land base until the annexation.
In that 20-year span, additional factors have come into play as well.
 
The city's administration imposed its urban wish-list and rules on the rural area...and its property tax classifications (business often pays anywhere from four to 10 times the residential tax base, but business generally depreciates the plant and equipment, which residential isn't allowed to do).     

Except for farmers, the fewer the voters in a property class,

the higher the tax rates.  (UBCM)

An interesting read is this 250-page document "Local Government, Province of B.C. 4th Edition, Union of B.C.Municipalities".  

 In the United States, virtually all state governments simply require that tax rates are the same for all kinds of properties.  

As that document states, it's not surprising that councils "seek to satisfy their voters, who are largely residential property owners or tenants, by keeping residential property taxes low at the expense of non-residential property owners.  The councils can then provide more services for their residents than the residents would be willing to pay because the tax burden can be shifted to non-residential properties who subsidize the services to the residents.  It is nice for residents to reside in such a system, but it's not so nice if the high taxes on non-residential properties discourage investment and ultimately undermine the tax base.

"It is nice for residents to reside in such a system...not so nice if the high taxes on non-residential properties discourage investment and ultimately undermine the tax base."

British Columbia municipalities have more discretion to set different property taxes for different classes than any other jurisdiction in Canada.  Other provincial governments set the ratios among property classes, have fewer business and industrial classes, and/or constrain tax ratio and rate setting.  Since 1984, when B.C. municipalities were no longer required to base their tax rates on ratios set by the province, they have gradually increased the rates on business, industry and utility classes relative to residential tax rates.  By 2003, some non-residential rates and associated tax ratios were the highest in North America.  At the same time, the median rates for residential rates in B.C. were the lowest in Canada.

But by 2006, this gouging of business led to disincentives to investment.
That hasn't changed in the interim.

Look at the City of Calgary's 9-year history of tax rates for business here:
Yes, it's actually decreased!
Because they're not scaring business away.

An undiversified tax base hits rural communities hardest which is why electoral area directors are against amalgamation.  There is little diversity and even fewer taxes.
It does hit residential ratepayers last.
But as business increasingly resists reinvestment--some even leaving the area--it eventually does hit the residentialrate class.


Director of Area "C", Mike McNabb, made a presentation to the Union of B.C. Municipalities in 2011 that  delineates the difficulties electoral areas experience with (willingness of involved parties) amalgamation / unification, or, (forced) annexation:   inability to plan land uses, loss of tax base (with a corresponding increase--for the same level of service--to those residents who remain) and various social impacts, not the least of which is "loss of community and identity".

Cause and effect?
Fifty per cent of what landowners pay in property taxes goes to wages and benefits for an ever-increasing slate of bureaucrats and administrative processes.  That money needs to return to infrastructure and community projects.

The present system, often called the downward spiral, is unsupportable and unsustainable.
Because we residents say it is!
In 10 to 15 minutes, one can easily drive through the area in which there are three administrations and two mayors and councils.
Easily.

And, like the letter writer, I also mourn--albeit in advance--the results of amalgamation if not concluded  correctly.  By that I mean rural areas need to be distinguished as rural, and the new administration needs to resist imposing urban rules and regulations and hopefully, property taxes.  We acreage owners in Coldstream have already seen Mayor Garlick and Council's urban wish and effort to rezone East Coldstream's acreages to RU10/RU30.  Thankfully that failed, for the time being.

Let's hope the new, unified area's administration is able to resist the cookie-cutter control mechanisms of urban planners. 

"The effect must be less government," affirms Kia.

 Because we know what we value.