Comment 28523

By A Smith (anonymous) | Posted February 08, 2009 at 01:40:38

Arienc, >> Certainly the cost of things like road maintenance, sewage treatment, trash collection, connections to services all link more closely to square footage than to market value

If that is the case, then why can Oakville ( and Burlington have tax rates much lower than Hamilton? Both of those communities are much less dense (population wise) than Hamilton, as are Ancaster, Dundas and Stoney Creek.

>> However you neglect to understand that those tax dollars are used to maintain certain essential services

Take a look at the 2007 budget and you see that total public works in Hamilton only made up 22.7% of overall expenditures. Social services was the biggest number at 23.8%. Furthermore, just because you need to bring in a certain amount of money to pay for city services, does not mean you need to raise tax rates. If a city right next door (Burlington) can run a more sprawling community than Hamilton, using lower tax rates, so can we.

The thing you fail to appreciate, is how consumer demand for properties would go up in Hamilton, if tax rates fell. In turn, greater demand would push assessments up, thus allowing the city to collect more revenue at a lower tax rate.

Furthermore, by capping the tax rate at no more than 1% of property values, it would force legislators to discipline themselves in their spending proposals. Given the history of elected officials in Hamilton, this would probably be a great idea.

Grassroots, >> A Smith: Sometimes you confuse me, in your last post you seem to be advocating for the outsiders to be buying homes. Lowering taxes and so on, that makes it more affordable for outsiders to be here and take the spaces but what about the Hamiltonians?

Lowering the tax rate on property increases the demand for property and therefore pushes up the value of land. However, this does not necessarily mean that the cost per square foot of a housing unit must go up. If the city reduced restrictions on building heights, this would allow developers to build as high as they wanted and would reduce the land cost associated with new developments. Therefore, you could have increasing land values and lower or stable prices for housing units. The result would be a faster growing city with many more job opportunities.

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