Comment 108573

By kevlahan (registered) | Posted January 30, 2015 at 10:09:58

Thanks for this analysis.

Of course, any talk of "subsidy" must include cost and not just revenue!

Subsidy means that wards with higher revenue than costs are subsidizing wards with higher costs than revenues.

And it seems clear that tax per capita and, even better, tax per square km are pretty good proxies for costs. Per square km is better than tax per capita because many per capita costs (water, sewer) are paid at least partly through user charges. Other services (especially roads and fixed infrastructure) scale like area.

But it is should be absolutely obvious that when talking about "subsidies" ignoring costs and comparing revenues from wards of vastly different populations, sizes and densities is nonsense.

A good example is the new Stanton development at the site of the James St Baptist Church, which is expected to generate $750K in (the equivalent of 215 houses) annual tax on an area smaller than a suburban lot, and at no extra infrastructure cost! And, as Ryan points out, there is huge potential for tax revenue on all the surface parking lots downtown. Anything the city could do to encourage their development would lead to enormous payoffs ... like LRT or better transit for example!

Just to be clear, I assume the property tax revenue includes all commercial taxes as well (where is the $20M Stelco pays, for example?).

Comment edited by kevlahan on 2015-01-30 10:24:13

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