After we issued the previous Economic Snapshot which discussed how tax rates compare across the District, some of our members told us that they would like to see a broader comparison of our Township of Muskoka Lakes (TML) budget with those of our neighbouring communities. Today, we will respond to their curiosity.
First, we should have a basis of comparison. When we look at taxation and spending patterns in neighbouring communities, we need to be aware of demographic differences. Let’s look at population, geographic size, how many kilometers of roads in each jurisdiction to be taken care of, assessment values, etc. To find out, we turned to the 2016 Canadian government census report.
|2016 Census Demographics|
|Seasonal Population||7,435 (32.5%)||11,992 (49.9%)||7,633 (28.6%)||25,943 (79.5)|
|Permanent Population||15,414 (68.5%)||12,055 (50.1%)||19,056 (71.4%)||6,707 (20.5%)|
|Geographic Area (km2)||628||518||710||794|
|Kilometers of Roads||318||264||412||380|
|Population Density (people/sq km)|
|Seasonal Population Density||11.84||23.15||10.75||32.66|
|Permanent Population Density||24.54||23.27||26.84||8.44|
|Total Population Density||36.37||46.42||37.59||41.11|
There are a few observations we can derive from this data. In terms of the number of people who live and cottage in the area, the TML is the largest. Uniquely, 79.5% of the population is seasonal, a number that is considerably larger than any of our neighbours. When seasonal and permanent populations are combined, all four communities are very similar.
The TML is the largest in terms of geographic area and ranks second in how many kilometers of roads it must maintain. In terms of population density, the TML once again stands out as being mostly seasonal, but the overall density numbers show that all of the municipalities have similar density.
From this data one might assume that the overall budget for the TML is larger than its smaller neighbours. To find out, we checked out the 2017 budgets for the communities we are looking at.
To compare budgets, we looked at the property assessment values and applicable tax rates for each jurisdiction. This data is compiled by the Government of Ontario and is submitted by each community. Here is a snapshot of what I found.
|Tax Base (assessed Value of All Properties)||$3,174,225,675||$3,355,610,152||$3,771,491,395||$9,343,074,411|
|Revenue from Property Taxes||$14,023,856||$14,484,659||$13,653,176||$10,584,769|
The first line in the above chart shows that the value of all of the properties that are taxed in each municipality ranges from a low $3 billion in Bracebridge to a high of $9.3 Billion in the TML. The second line tells us that the tax rate in the TML is much lower than any of our neighbours. When we multiply the tax base by the tax rate, we determine the total municipal revenue from property taxes as shown in the chart. Although we all pay additional property taxes to the District of Muskoka, we did not include an analysis of these taxes since the rates are almost the same across all municipalities in the District. However, we should always be aware that because of our larger tax base, the TML pays a larger part of District taxation than any of our neighbours.
The Other Revenue listed above shows what each jurisdiction takes in from other sources such as the Ontario Municipal Partnership Fund, Municipal Grants, User Fees, Licenses and Permits, Fines and Penalties, etc.
It may surprise some to see that even though the TML has the largest tax base, the revenue from property taxes is actually lower (about $3 million lower) than our neighbours. This is because we enjoy a much lower municipal tax rate. It is interesting to note what our TML property taxation would yield if we taxed ourselves at the same rate as our neighbours. The average tax rate of Bracebridge, Gravenhurst and Huntsville is 0.0041182. By multiplying that rate by our Tax Base, we can determine what taxation revenue could be if we were taxed at the average rate. The result is shown in the following chart.
|Present Tax Rate||Average Tax Rate|
|Tax Base (assessed value of all properties)||$9,343,074,411||$9,343,074,411|
|Present vs. Average Tax Rate||0.0011329||0.0041182|
|Resulting Revenue frm Property Taxes||$10,584,769||$38,474,929|
This means that if we taxed ourselves like our neighbours, we would have an additional $28 million dollars to spend on governmental services in our community!
What can we make of all of these numbers? First, all of us benefit from having an abundance of highly valued (mostly cottage) properties in the TML. This has allowed us to set our tax rates at levels that are much lower than our neighbours. For instance, someone living in the TML with a house assessed at $400,000 pays about $1,200 less in taxes than if they had a house of the same value which was taxed at the average tax rate of the other communities we studied.
Does the fact that our taxes are low relative to our neighbours reflect excellent Township management or does it show that the Township is not providing the types and levels of services that our neighbours enjoy? As a community we should decide together what services we want and can afford. Our local government is in place to listen to our concerns and to provide and manage these services using our hard-earned tax dollars.
One of the problems our businesses and governmental leaders have identified is a lack of labour to fill the jobs that are available but that go unfilled. A lack of employees is a factor in keeping our businesses and our community from prospering. Why is it that we can’t attract more young families to live in the TML? Is it because there is a lack of affordable housing? Is it because our neighbouring communities are more attractive places to live? Do our neighbours offer more community services that attract young families? If our local government provided enhanced services, would it attract families who would want to live, work, and raise their children here? These are the kinds of questions that any community needs to ask themselves when pondering if our taxation rates are set at the right level.
In the next edition of our Economic Snapshots we will do some spending comparisons with our neighbours. Now that we know how much money they raise in taxes, we are interested to compare how our local governments spend it.
Ratepayers - Board Meeting
Apr 27, 2019 9:00am to 1:00pm
TML - Committee of the Whole
May 16, 2019 9:00am to 12:00pm
TML - Council
May 17, 2019 9:00am to 12:00pm
Ratepayers - AGM 2019
Jul 20, 2019 10:00am to 12:00pm