Editorial: A sensible tax approach

Municipal budget season is upon us and so far South Dundas council is taking a responsible approach to the pending budget. They are expending a tremendous amount of time and effort on reviewing everything involved with municipality. Good.

This is not to say that past budgets were bad, per se. However, in recent years, the usual two per cent cop-out approach that many municipalities in Ontario take at budget time was taken in South Dundas. That is, they increased the taxes by two per cent, and then adjusted spending budgets to compensate. They taxed more, then spent more. Which is like putting the cart before the horse.

The flaw with the two per cent cop-out is that it does not take into account the increase in assessment value, or properties added to assessment such as new housing construction or industrial development.

The two per cent cop-out does not give an accurate picture of the financial health of a municipality.

It also does not give a proper picture of the real needs of a municipality. In many cases, the infrastructure needs of a municipality far outweigh the ability to raise taxes.

Taking a longer view of the municipality’s finances and forming a long term plan is the responsible approach.

So far, this council has looked at a four year plan for municipal buildings, has reviewed the last audit and administrative policies. Up next is economic development, public works, and emergency services. Then there are the planned three days set aside in February for the budget process itself. Almost eight days of review and planning in all.

Eight days of meetings, in addition to regular meetings, sounds like a lot over a two month period. But, if the end result is a tax change that accurately reflects the needs of the municipality, it’s worth it.

Not only is it good budgeting practice to review all the numbers and have a long term plan, it helps South Dundas to keep any potential tax increase below the Consumer Price Index.

Tax increases below the CPI mean that even citizens who live on fixed incomes will have more money left in their pockets after paying the tax bill to spend elsewhere.

More money in people’s pockets means more opportunity to have a positive economic impact on the community at large.

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