February 22, 2017 – Today’s meeting was remarkably short. We resumed our debate of the ever popular $42 Stormwater Right of Way (ROW) tax.
The stormwater ROW tax originated from a 2013 URB decision that requires HRM to pay Halifax Water $3.9 million a year to cover the cost of providing stormwater infrastructure for streets and sidewalks. This is different than the “flow-based” charge that Halifax Water recovers from its customers. The ROW cost was paid for through the general tax rate the first year, was moved to Halifax Water bills for the following two years and, last year, was made an HRM flat tax of $42. There were some unintended consequences of going the flat tax route. Since some condos have separately deeded parking spaces and storage lockers, the $42 tax “stacked,” and some residents paid it two or three times. Hardly fair.
With the problems of using a flat fee on assessments now apparent, Council opted this year to change the way the $3.9 million is collected again. Today, we considered collecting the tax as an area rate on every property in the Halifax Water Service Boundary (stormwater in rural areas is handled by the Province). The motion was lost 6-10. I was one of the six who voted in favour of using an area rate.
For me, there is an important distinction between the stormwater flow charge that is part of your Halifax Water bill and the ROW tax. The first is a clear service to property, while the second is a service to the community for streets and sidewalks throughout HRM. The ROW tax isn’t just for the road or sidewalk in front of your property. It’s a tax to pay for the collective good. It’s my feeling that taxes that go to provide for services that benefit the community as a whole should be covered collectively through taxes.
Property taxes aren’t perfect, but they have at least some connection to individual wealth, meaning that they’re the most socially equitable option HRM has to distribute costs. Those with higher value properties pay more than those with lower value properties. The proposed stormwater ROW rate was 0.0125 per every $100 of assessment so a $200,000 bungalow in North Dartmouth would have paid $25 while a $1,000,000 property on the Arm would have paid $125.
Not enough of my colleagues agreed with my view though and the motion to assign the cost to an area rate was defeated. Council instead directed staff to prepare a bylaw to recoup this cost on Halifax Water bills. Putting the $3.9 million back on the water bills as a flat fee will benefit condo owners who will pay just once for their entire building and folks who own valuable properties. The people who will pay more are homeowners whose property is worth less than about $350,000.
It will be interesting to see where this goes when it comes back to Council. It is possible that putting this on the Halifax Water bill will also be defeated. If that happens, the cost will be recouped through the general rate by default. The saga continues.