Saint John's Tax Myth

Posted on March 8, 2010 by

Shawn Peterson started this discussion with a re-print of a Telegraph Journal article by Stephen Chase. The article was fuelled by what Mr Chase refers to as “pre-Easter” presents in the form of the latest tax assessment notices.

As I noted in a comment on Shawn’s blog, I agree with Stephen Chase on this issue, Saint John tax rates are too high compared to other areas of the province.

Saint John is eating itself from the inside out. I know many people who left (and are currently in the process of leaving) the city. I have considered moving out of the city to join the migrating herds in the KV, Grand Bay, or elsewhere to stop paying crazy tax bills, particularly when the assessments keep going up by ridiculous amounts. As for the tax rates, I (of course!) have some thoughts…

First, the concept of varying tax rates by municipality is in itself a problem. NB is not a large enough province to have such a needlessly complicated system, therefore, in my opinion, a province-wide tax rate is in order. Yes, it would upset those who live in the local service districts and some of the smaller communities because their taxes would likely rise, but most of them use the roads in the various municipalities, they use the hospitals, they work in the municipalities, etc., so their argument can be countered quite handily. The mixed pot of money from the blended tax rates would then be proportioned to the municipalities appropriately. The taxes in the areas like KV would likely remain constant, while the tax rates in the municipalities would likely drop, making them more attractive places to live.

Second, paying taxes based on assessed value is another issue that pushes people out of the city and into lesser-taxed areas. A homeowner with a 2500 square foot home valued at $150,000 uses roughly the same amount of services as a homeowner with a 2500 square foot home valued at $300,000, yet the homeowner in the lesser-valued house pays 1/2 price for those services.

Imagine someone who makes $60,000/year going to McDonalds and being forced to pay $6 for a Big Mac while someone else who makes $30,000/year only pays $3. It would never be accepted, so why should we accept it with our taxes? A better system might be to assess taxes based on square footage rather than assessed value.

Finally, there should be a percentage cap in place for those who retain their primary residence. For example, a little old lady who has lived in the South End for 30 years in the same home is forced to come up with more and more tax money each year, likely while facing a fixed income problem, for no new services (some would argue she receives less services each year…). And as long as she lives in that home, she sees no real benefit for the increased “assessed value” of her home. Therefore, a plan similar to the “Save Our Homes” amendment capping (and allowing portability) to tax rate increases at 3% for existing homeowners (and a 10% cap on all previously uncapped properties) in the state of Florida would be in order .

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