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Aug. 4, 2020 | Tuesday
Editorials and Opinions
Letter: NOTL tax rate is low but comparing it to other municipalities is meaningless
File photo.

Dear editor:

The headline on the continuation of your main story in the Dec. 19 edition of The Lake Report said “Niagara-on-the-Lake still has one of lowest tax rates in region.”

While that is factually correct at the municipal level, it is meaningless, and arguably misleading.

The residential tax rate is a simple mathematical calculation i.e. total revenue needs of the municipality divided by the total assessed value of residential properties in the municipality.

Therefore, if Town A and Town B had the same revenue needs and the assessment value of Town A was twice the assessment value of Town B, the tax rate in Town A would be half the tax rate in Town B.

This would largely explain the difference in tax rates between NOTL (0.23 per cent) and Niagara Falls (0.56 per cent).

However, it’s more complex than that. Other factors include the makeup of the tax base (residential versus industrial /commercial and agricultural – all of which have different tax rates), what other revenue sources the municipality has, what services the town provides its residents and the size of the town.

A larger town has lower revenue needs per property owner for each individual service.

Complexity is further illustrated and confused by looking at the regional tax rate. In 2019, NOTL residents were charged 0.73 per cent whereas Niagara Falls residents were charged 0.57 per cent. Go figure!

Or NOTL residents paid 0.005 per cent (not a typo!) in education levies whereas Niagara Falls residents paid 0.16 per cent!

This is probably due to the relative number of students in each municipality.

Clearly, a meaningful comparison of tax rates between municipalities requires a much fuller explanation than what was supplied in your article.


Bob Wheatley