Is rural HRM being taxed fairly?

Yes, no, maybe so, a deep dive into confusing tax policy.

One of the items on the council’s agenda this past Tuesday was a report about a few sidewalks in rural HRM. The report itself is pretty routine: A few communities in rural HRM want better active transit, and the city proposed sidewalks for a few of these communities.

Two of these projects, in Lucasville and Musquodoboit Harbour, are relatively popular because, in the Harbour’s case, the proposed sidewalk is in a place that already is a pedestrianized community space. However, the city is proposing paying for it with an area rate, a special tax for this sidewalk, and that is unpopular. But for these two communities the sidewalks are popular enough the city will move ahead with determining the rate. The area rate thing is unpopular for all five proposed sidewalks, and in Hubbards, they’re going back to the drawing board about who should pay the area rate. The idea was so unpopular in Porter’s Lake and Upper Tantallon that these projects were postponed for five years. That’s the way forward approved by council on Tuesday.

However, a larger debate is swirling under these five sidewalks related to tax equity in the HRM. Council got close to having a bit of this debate in public when councillor Laura White asked city staff how they came up with the area rate number, because it covered such a very small portion of the cost, which didn’t seem sustainable. So she wanted to know how the city was equitably funding services. City staff explained that there is no way to pay for the capital costs of rural infrastructure at the rural rate, even if the city increases rural taxes to the urban tax rate. So even though the city was charging residents and area rate to bring them up to parity with the urban tax rate, it was not to cover the cost of building the infrastructure. With the sidewalk, those five rural communities would have the same services as urban people, so they have to pay the same rate.

In the report and throughout the debate, it was made pretty clear that the point of this area rate is not to pay for the infrastructure—that would require much higher rates in all the low-density parts of the city—but to make rural tax payers pay the urban tax rate now that they will have access to a sidewalk. And the reason the city wants to do that is because, according to the HRM’s tax policy, the difference between the rural $0.628 and urban $0.661 per $100 of assessed value property tax rate is sidewalks, and everything else—policing, solid waste, recreation programs, planning, libraries, sports fields, playgrounds, administration, fire suppression, street lighting, recreational and community facilities (municipality’s share of capital and operating costs)—is the same.

This raises many interesting questions with many nuanced and grey areas about tax equity, what access to a sidewalk means, and who, if anyone, is benefiting or being short-changed from the HRM’s current tax policies.

And just to be clear, this is a think piece. Not in the sense that I’ve thought a lot about something and now have an opinion. But rather, this seems like it’s a really big issue, and I’m thinking a lot about it. I have calls and emails out for interviews with people who know more about these things, and I’m reading a lot of PDFs. Or in other words, I am in the process of doing journalism, aka homework: the job. In the futur,e this type of thing will be completely behind the paywall, but this time, in an effort to get you to subscribe, I’m tempting you with the offer of seeing how the sausage of journalism gets made. If you just like eating the sausage, the end result of this research will be in an issue of Grand Parade, probably in about one to four months' time.