Friday, January 28, 2011

O'Brien questions two-tax system - Well, septic Councillor says it may be time to make people pay same rate
(excerpts from an article published in the Daily Gleaner, January 27/11)

Fredericton's finance committee chairman Coun. Mike O'Brien says it's time to consider ditching the city's two-tiered tax system. If the city abandoned its rate discount program for some 400 homeowners, it could take in another $670,000 in tax revenue annually, he said.

The capital city has maintained a tax rate of $1.4211 per $100 of assessment for residents who get full access to city services. But when amalgamation occurred in 1973, some parts of the newly incorporated City of Fredericton were still on septic tanks and domestic wells. Residents in unserviced areas of the city pay the outside rate, which is $1.0658 per $100 of assessed property value.

"The issue I wish to have discussed is simply the principle of the two rates. If you live in the city, you get all services, except possibly water and sewer hookups," O'Brien said.

A homeowner whose house is assessed at $190,000 would pay $2,025 per year with the outside rate. The same taxpayer with full services would pay $2,700 per year plus annual water and sewer costs of about $550 annually. That means those residents pay $675 per year in taxes plus the water and sewer costs.

"One could say that those on water and sewer are somewhat subsidizing those who are not as they receive all the other city services at lesser overall household cost," O'Brien said. "Council simply has to get all the information from staff and have the philosophical discussion on the history of, the basis for, and the need to continue, the two different rates."

To read the entire article, click on the following link:

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