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Hamilton sees low assessment growth

 By Kevin Werner, News Staff

Hamilton may have had a record year when it comes to building permits in 2012.

But it hasn’t translated into more assessment growth, with the city seeing only a 0.8 per cent increase last year.

Mike Zegarac, acting general manager of corporate services, says Hamilton lost about $3.1 million in potential property taxes when property owners won large tax appeals. He said successful tax appeals from industrial, and commercial businesses means residential taxpayers will have to pay more in property taxes.

“There are significant pressures from industrial appeals,” he said

Owners of golf courses, McMaster Innovation Park, and development lands in Flamborough have managed to cut some of their bills in half, said Ward 5 councillor Chad Collins.

“I’m concerned it’s a growing trend, not just here, but across the province,” said Collins. “The cranes we see in the downtown really don’t mean much if there is a backdoor.”

Zegarac said the city should expect further appeals by industries and commercial property owners in 2012 and 2013.

Larry Friday, director of taxation agreed. For instance, Municipal Property Assessment Corporation (MPAC) changed how it calculated multi-residential property owners this year. When MPAC re-calculated how golf courses were taxed, they appealed across the province and won sharp reductions, while denying municipalities valuable revenue.

“I anticipate a province-wide appeal in 2013,” said Friday, referring to multi-residential property owners. “That’s what the golf courses did.”

The city’s assessment growth in 2011 was 1.1 per cent, 2010 it was 1.3 per cent, the same in 2009. The 0.8 per cent assessment growth this year represents an additional $5.2 million in revenue for the city.

Zegarac said the discrepancy between record building permits and assessment growth involves a number of factors. He said there is a two-year time lag between a permit issued and construction starting; differences in property valuations; and government and institution properties are not taxable, so they are not included in assessment growth.

Ward 11 led the city with an assessment growth of 0.4 per cent, followed by ward 12 with a 0.2 per cent assessment growth.  Both areas are seeing a residential building boom. The ward 11 assessment did take into consideration theRed Hill Industrial Park, and the development of Canada Bread. Ward 3, for instance, had an assessment drop of 0.1 per cent.

Ward 15 councillor Judi Partridge said the city shouldn’t get too excited when it sees a $1.5 billion building permits record, since it will take at least two years before shovels go into the ground.

“When I drive through ward 15, I see huge growth going on,” she said. “I’m surprised those numbers are as low as they are.”

Ward 15 saw a zero per cent growth in 2012.

Mountain councillor Terry Whitehead said his ward 8 area has witnessed the ongoing expansion project at Mohawk College, and a new hospital being built, yet the assessment for his ward in 2012 was 0.1 per cent increase.

“This doesn’t give a sense of the other revenue generators,” he said. “This is just one piece of the puzzle.”

Ward 4 councillor Sam Merulla took issue with the analysis, arguing more suburban growth means higher service costs the municipality has to provide, such as for police, fire, and other infrastructures.

“All assessments are not created equal,” he said. “We have to provide recreation, parks, police and fire. We don’t have to for the industrial (properties) in the urban areas.”

 

 

 

 

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