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Taxation and the middle class
#46
@KevinL

Folks with common interests and common grounds (living in WR) Are having an intelligent conversation that has ebbed and flowed naturally. I think some wiggle room should be granted for the thread.

That being said There is a taxation type thread correct? So in theory many of the posts could be moved there once the issue comes to its conclusion...
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#47
(12-01-2020, 02:23 PM)taylortbb Wrote:
(12-01-2020, 12:23 PM)Momo26 Wrote: Are we really sugar coating a tax hike on behalf if the City?

Anything less than inflation is effectively a tax cut. 1.1% is less than recent inflation, though 2020 may be lower inflation than average. Either way, it's not really a tax hike, it's pretty much a status quo maintenance of current service and taxation levels.

You can see tax increased or decreased if you look at the mill rate (which is the true tax rate). Hard as it may seem to believe, Kitchener has had a negative tax rate increase for at least 10 years or so. Our mill rate hasn't change much, but the value of homes aren't accurate. As almost every home is undervalued, you're paying less tax than expected. It's like having a job that pays $150,000/year, but the government will only accept that you made $100,000.

Toronto has one of the lowest tax rates in the country, yet their taxes are actually higher than most places. Property taxes are a much more confusing beast.

Either way, Kitchener keeping the tax increase at or below inflation is good news. Though in the future, it'll be higher than inflation. Road work still needs to be done.
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#48
In times other than these pandemic times, I'm not so sure that keeping property taxes down, and especially trying to lower them, is a good thing.

For example, look at Kitchener's infrastructure situation. Like many places we have a lot of stuff that should have been replaced long ago, often decades ago, but has been kicked own the road again and again due to the desire to "keep taxes low". Then in the early 2000s Kitchener set up the Advanced Infrastructure Replacement Program and started it in 2003. It was a twenty year plan to do an extra small amount of work over what was normally done each year in order to catch up, but now, in 2020, we are not 17/20ths through the stuff that needed to be done, again because things were once again put off in order to not raise property taxes, the cost of water services, and so on.

We see this all over North America, and in extreme cases cities are doing things like stopping redoing roads, turning them back into gravel, or even going bankrupt becaus etheir tax rates are not high enough to pay for that basic minimum of things.

Property taxes and such need to be set sensibly in order to get things done like this in a timely fashion, but instead everybody focuses on keeping them down, which is not sensible.
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#49
(12-03-2020, 11:57 AM)Bytor Wrote: For example, look at Kitchener's infrastructure situation. Like many places we have a lot of stuff that should have been replaced long ago, often decades ago, but has been kicked own the road again and again due to the desire to "keep taxes low". Then in the early 2000s Kitchener set up the Advanced Infrastructure Replacement Program and started it in 2003. It was a twenty year plan to do an extra small amount of work over what was normally done each year in order to catch up, but now, in 2020, we are not 17/20ths through the stuff that needed to be done, again because things were once again put off in order to not raise property taxes, the cost of water services, and so on.

If they want to save money on road maintenance, they should do it at construction time: build it at 2 lanes instead of 4, or just don’t build it. Be honest about how much stuff costs. What if we had a policy that we don’t build any new roads or road widenings when there is more than a 5 year backlog on infrastructure renewal?

Edit: I just realized what this would turn into: road widenings would be essential, but no bicycle infrastructure construction would happen while we were backlogged, which would be all of the time.
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#50
(12-03-2020, 11:57 AM)Bytor Wrote: In times other than these pandemic times, I'm not so sure that keeping property taxes down, and especially trying to lower them, is a good thing.

For example, look at Kitchener's infrastructure situation. Like many places we have a lot of stuff that should have been replaced long ago, often decades ago, but has been kicked own the road again and again due to the desire to "keep taxes low". Then in the early 2000s Kitchener set up the Advanced Infrastructure Replacement Program and started it in 2003. It was a twenty year plan to do an extra small amount of work over what was normally done each year in order to catch up, but now, in 2020, we are not 17/20ths through the stuff that needed to be done, again because things were once again put off in order to not raise property taxes, the cost of water services, and so on.

We see this all over North America, and in extreme cases cities are doing things like stopping redoing roads, turning them back into gravel, or even going bankrupt becaus etheir tax rates are not high enough to pay for that basic minimum of things.

Property taxes and such need to be set sensibly in order to get things done like this in a timely fashion, but instead everybody focuses on keeping them down, which is not sensible.

I agree. There is a distinction that should be made here though. The city does not set monetary policy, and cannot run a deficit. During a recession, the federal government (which does set monetary policy) should run a deficity by keeping taxes low and spending high in order to accelerate the economy. We do a decent job of this despite the doomsaying of various self claimed fiscal conservative governments. Of course, on the flip side that should reverse during times of economic growth, but we seem to have substantially more difficulty with that one (no matter which government is in power).

Cities on the other hand have no such goals or flexibility, ultimately they have little discretionary spending like police, most of their spending is on infrastructure, which should be replaced on a set schedule. Their tax rate should be set based on the replacement schedule of this infra, and should not be adjusted for macroeconomic trends. The upper level governments should both provide the social safety net that is necessary to ensure people are not put out of their homes, as well as the stimulus funding that will help strengthen the economy.

---In theory at least.

I do agree cities are far far too willing to hide their debt in infrastructure, and it makes sense, there is no accounting for that. Honestly, if you want to fix this, independent engineering auditors should be required to evaluate all the city's infrastructure, and develop a 50 year (or 100 year) plan of capital replacement and fund that plan. A municipality which is falling behind on their plan would be considered in debt, the same way they would be if there was a bank loan, and they could be required to fund the plan properly.

This is almost exactly the model condo building follow. We are required to have an engineering study of our building done, the engineers evaluate the costs to maintain the building, and develop a plan, and we are required to fund that plan. If we are behind on our plan, we would need to create a special levy to fund it. We are indendently audited every year to make sure things are being done properly and we are strongly incentivised to keep things on track, because our property values depend on not only how the building looks today, but the health of the fund that will maintain the building.

Of course, there is still nothing to do stop a board which outright refuses to maintain the building, and simply stops spending money and lets the building rot...this certainly happens to cities, but I suspect it is far more obvious when there is a regular report and evaluation of the property than whent he pipes are buried in the ground and nobody sees them.
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#51
(12-03-2020, 12:56 PM)ijmorlan Wrote:
(12-03-2020, 11:57 AM)Bytor Wrote: For example, look at Kitchener's infrastructure situation. Like many places we have a lot of stuff that should have been replaced long ago, often decades ago, but has been kicked own the road again and again due to the desire to "keep taxes low". Then in the early 2000s Kitchener set up the Advanced Infrastructure Replacement Program and started it in 2003. It was a twenty year plan to do an extra small amount of work over what was normally done each year in order to catch up, but now, in 2020, we are not 17/20ths through the stuff that needed to be done, again because things were once again put off in order to not raise property taxes, the cost of water services, and so on.

If they want to save money on road maintenance, they should do it at construction time: build it at 2 lanes instead of 4, or just don’t build it. Be honest about how much stuff costs. What if we had a policy that we don’t build any new roads or road widenings when there is more than a 5 year backlog on infrastructure renewal?

Edit: I just realized what this would turn into: road widenings would be essential, but no bicycle infrastructure construction would happen while we were backlogged, which would be all of the time.

This is another thing that is never considered for any project. Once a road is 4 lanes, it takes half a century to reconsider it being 4 lanes, that's half a century of maintenance on a road that was wastefully wide. I've said it before, if real fiscal conservatives existed, they'd have a meltdown about it...well...like I do.  But you're right, these costs should be considered as part of the original project, and the necessary tax increases built in, rather than an after the fact breakdown.
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#52
(12-03-2020, 01:09 PM)danbrotherston Wrote: I agree. There is a distinction that should be made here though. The city does not set monetary policy, and cannot run a deficit. During a recession, the federal government (which does set monetary policy) should run a deficity by keeping taxes low and spending high in order to accelerate the economy. We do a decent job of this despite the doomsaying of various self claimed fiscal conservative governments. Of course, on the flip side that should reverse during times of economic growth, but we seem to have substantially more difficulty with that one (no matter which government is in power).

Can finance capital expenditures through bonds but I suspect that one can't finance routine maintenance through bonds.
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#53
(12-03-2020, 01:09 PM)danbrotherston Wrote: Cities on the other hand have no such goals or flexibility, ultimately they have little discretionary spending like police, most of their spending is on infrastructure, which should be replaced on a set schedule.

Kitchener operating budget for this year was $427M; the capital budget was $118M ($38M of that goes toward addressing the current "infrastructure deficit"). 32% of the operating budget is for community services and 27% is for infrastructure services.

NB The region carries both operating expenses (transit, police etc) and capital expenditures (regional roads etc).
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#54
Playing Devils advocate, do you think there are any other services that could find some operations savings by being uploaded to the region or have we already reached that point?
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#55
(12-03-2020, 12:56 PM)ijmorlan Wrote: If they want to save money on road maintenance, they should do it at construction time: build it at 2 lanes instead of 4, or just don’t build it. Be honest about how much stuff costs. What if we had a policy that we don’t build any new roads or road widenings when there is more than a 5 year backlog on infrastructure renewal?

Edit: I just realized what this would turn into: road widenings would be essential, but no bicycle infrastructure construction would happen while we were backlogged, which would be all of the time.

It needs to be smart. IRA Needles Blvd is a good example. It was built as two lanes, then shortly after that, rebuilt as 4 lanes. It would have been cheaper to do 4 lanes in the first place.

Stirling, form Mill to Charles, was 4 lanes, and it should have been 2. Then we spend money reducing it to 2.

Other things, there needs to be better communication between departments. How many times have we seen a road dug up to replace something (none emergency) only to see the road ripped up again as it was part of a program. Could the none emergency work not have been put on hold for 2 months? Same when they rebuild a road, only to rip it up to replace something that was due for replacement.

Literally millions being tossed away by mismanagement. While they have gotten better over the past few years, it still happens.
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#56
(01-09-2021, 11:33 PM)jeffster Wrote:
(12-03-2020, 12:56 PM)ijmorlan Wrote: If they want to save money on road maintenance, they should do it at construction time: build it at 2 lanes instead of 4, or just don’t build it. Be honest about how much stuff costs. What if we had a policy that we don’t build any new roads or road widenings when there is more than a 5 year backlog on infrastructure renewal?

Edit: I just realized what this would turn into: road widenings would be essential, but no bicycle infrastructure construction would happen while we were backlogged, which would be all of the time.

It needs to be smart. IRA Needles Blvd is a good example. It was built as two lanes, then shortly after that, rebuilt as 4 lanes. It would have been cheaper to do 4 lanes in the first place.

Stirling, form Mill to Charles, was 4 lanes, and it should have been 2. Then we spend money reducing it to 2.

Other things, there needs to be better communication between departments. How many times have we seen a road dug up to replace something (none emergency) only to see the road ripped up again as it was part of a program. Could the none emergency work not have been put on hold for 2 months? Same when they rebuild a road, only to rip it up to replace something that was due for replacement.

Literally millions being tossed away by mismanagement. While they have gotten better over the past few years, it still happens.

"It needs to be smart"...Ira Needles was "smart" in that it was designed to be widened (the widening work was cheap and easy, just a little earlier than expected). The problem with Ira Needles is they approved the boardwalk which induced vast sums of traffic, and that was not in the traffic models. But even if the road would not have been widened, it would still have been wasteful, because it was already essentially built as a 4 lane road.

But fundamentally there was zero evaluation of the actual cost of leaving it as a two lane road vs. widening it. Yes, there were some traffic delays for like 10 minutes a day...but it's likely the long term cost of maintaining a 4 lane road forever significantly outweigh the minor short term congestion in all economic measures. But no such evaluation is ever done.

Of course, the real solution would be to not force tens of thousands of people to drive by creating a landscape that is utterly oppressive to anyone not in a car.

We haven't "reduced" Stirling, we've repurposed the space for better uses, but that involves painting lines, it costs essentially nothing. It makes better use of the money we're spending, but it does not change the fact that paving a 4 lane wide road was and is wasteful.

As for duplicated effort, the city generally does make an effort to do this. Their timelines are quite long and are able to align things together like this, you rarely see cities duplicating non-emergency effort in a short timeframe. Of course, sometimes the region does some work and the city does some work, that's harder to organize, but still possible.

Of course, probably 9 times out of 10 what you are discussing is a private developer doing work, and not only is it silly to think a private developer will align their timelines to a city governent, it doesn't cost us anything--in theory at least--not only is a developer paying for the work, they are also paying for permits to cover the cost of shutting down the road, whether they cover all the costs or not...I mean...they're not...just like nobody covers all the cost of using roads.
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#57
Stumbled upon this thread I started years back and recalled reading this the other day.

https://www.therecord.com/news/waterloo-...-cent.html


Cost of stuff, inflation, something something
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#58
I know that there are brighter minds that can (or maybe have) figured this out, but is there a certain "Goldilocks density" and an associated property tax level that could keep Regional and City services functioning and infrastructure in good repair?  For instance, larger cities such as Toronto struggle with a lower than average tax rate that has meant decades of deferred maintenance.  Toronto also offers the option for residents to defer the taxes they owe until the property sells as a way to allow those in neighbourhoods where property values have spiked to remain in their homes without being forced out due to high property taxes.

On a related note, here is a 2014 article on Goldilocks density:


Quote:Economists such as Ed Glaeser would flatten neighbourhoods like Greenwich Village and fill them with 40-storey towers, claiming that increased supply will lower the cost of housing. Economist (and Economist correspondent) Ryan Avent says much the same thing, noting that nimbys use zoning rules, historical designations and public pressure "to preserve neighbourhoods, views, and buildings they love from changes they fear". They would let Adam Smith and the law of supply and demand decide how our cities are built.

The key to building a healthy and green city isn't putting wind turbines on the roof of a glass tower; the way to solving our housing crises isn't handing the keys to the planning office to a bunch of living and dead economists. It is to build walkable and cyclable communities at the Goldilocks density: not too high, not too low, but just right.

Maybe Waterloo Region can avoid becoming a forest of 40+ story towers, but work towards densities that allow the tax revenue to support the cities and Region?
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#59
(01-09-2020, 10:12 AM)Momo26 Wrote: Here's another novel idea, not adding and increasing taxes on society.

Best I can do is another 23 percent increase over 3 years my guy: https://www.therecord.com/news/waterloo-...dcf56.html

(Didn't know where to post this since there isn't a general tax thread)
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#60
Quote:New spending would go toward hiring more firefighters, improving sidewalk snow clearing, responding to climate change, promoting affordable housing and tackling a growing backlog of repairs to buildings, pipes and roads, among other projects. The budget proposal would add 62 full-time jobs over three years, a staffing increase of eight per cent.

I'd rather improve the taxes now than watch the maintenance backlog grow even more while hoping that the Province will someday kick in more money to support the Cities.  It's only been 30 years since Mike Harris downloaded a whole bunch of fiscal responsibilities on the Cities for all the things that we are paying for now (eg social housing and social services).
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