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Lehman clarifies stand on HST share

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In Barrie
Aug 18th, 2017
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Mayor Jeff Lehman

Letter to the Barrie Examiner from Mayor Jeff Lehman August 18 2017

Re: ‘Lehman throws support behind HST increase’

I wanted to clarify my position on the need for more municipal revenue.

I’m sending this letter because I was not specific enough with my comments to the Examiner as reported Aug. 16 – that’s entirely my fault and not the Examiner’s.

To be clear: I support municipalities receiving 1% of the existing 13% HST – I don’t support an increase to 14%.

I have supported this position as far back as 2008, when my predecessor as chair of Ontario’s Big City Mayors, Hazel McCallion, called for a 1% share of the HST to go to Ontario’s municipalities.

I supported her then, and I support that idea today – but I don’t support a higher HST.

The reality is that Barrie residents – like residents of most of Ontario’s municipalities – have faced property tax increases above the inflation rate due to the lack of funding for infrastructure.

Municipalities have three choices: raise taxes, go into debt, or don’t do the needed roadwork and other proper maintenance. And we all know Barrie’s roads and other infrastructure need more work.

In the past four years, Barrie council has held the city’s year-over-year cost increases to 2% or less every year, and in doing so, delivered the lowest annual cost increases since the 1990s.

However, we have had to ask our residents for a 1% infrastructure levy on top of this cost increase for infrastructure. I don’t think this is fair, but it was the most responsible solution given the other choices facing us: more debt, or further erosion of our roads, bridges, buildings, and parks.

A share — not an increase! — of the HST would eliminate this pressure on property taxes.

While it looks like this won’t be happening, I believe Ontario’s party leaders need to tell the public what they will do to stop the unfair pressure on your property taxes.

Adding 1% to HST is AMO’s goal

By Bob Bruton, Barrie Examiner August 15 2017

The one-percent solution to Ontario municipalities’ infrastructure deficit makes dollars and sense to Barrie Mayor Jeff Lehman.

He supports a 1% increase in sales tax to help local governments maintain their vital roads, pipes and other hardware.

“Municipalities simply don’t have enough revenue to do the work needed to keep infrastructure in good repair,” Lehman said.

Increasing the Harmonized Sales Tax (HST) by 1% has been a hot topic at this week’s Association of Municipalities of Ontario’s (AMO) annual conference, at Ottawa’s Shaw Centre.

“AMO has forecast that unless there are other revenues made available to municipalities, we are forced to either go into debt, raise taxes well above the inflation rate, or let our roads and buildings crumble,” Lehman said. “None of those are acceptable to either municipalities or our residents.”

Like most Ontario mayors, Lehman knows about infrastructure deficits and attempts to shrink them.

“In Barrie this has led to the 1% infrastructure levy, which was the least worst solution available,” he said. “Just to give you a sense of the math, the infrastructure levy provides about $2.5 million more a year in Barrie, most of which is spent on roads. After several years, we have started to reduce the infrastructure deficit and get more work done.

“However, our staff estimate our infrastructure deficit to be in the order of $40 million to $50 million per year.”

When city council approved its 2017 operating/capital budget in mid-February, it included a blended (municipal/education) 3.09% property tax increase. This hiked taxes to $3,966 for the average city home assessed at $302,000. Last year property taxes on that home were $3,847.

That tax increase includes a 1% infrastructure levy to replace and rehabilitate Barrie’s roads, bridges, buildings, vehicles, machinery, equipment, parks, technology and other infrastructure, part of the capital budget.

Which is why adding another 1% to the HST could be so important.

“Property tax increases hit lower income homeowners and renters the hardest as it’s a regressive tax,” he said. “If other revenue sources were made available then municipalities would not be forced to raise property taxes by these levels.”

But while Lehman supports adding 1% to the HST for infrastructure, he’s not optimistic.

“I believe two of three leaders have already ruled out an HST increase, which is not surprising to me going into an election,” he said, referring to next June’s Ontario vote.

“However, our question to all three provincial party leaders is: do you agree that property tax increases above inflation are acceptable? If not – what is your plan to fix that?”

Premier Kathleen Wynne, PC Leader Patrick Brown and NDP Leader Andrea Horwath are scheduled to speak at the conference.

Wynne told the Canadian Press Tuesday her Liberal government will not consider the 1% sales tax increase.

“We’re right now trying to help people get ahead … People are having a hard time making ends meet, so this is not something that we would consider,” she told CP.

Wynne noted her government’s previously announced plan to spend $190 billion on infrastructure during the next 13 years; the federal government has also promised billions of dollars to address the province’s ageing systems.

AMO president Lynn Dollin, who’s also Innisfil’s deputy mayor, said Monday that her group sees no other option other than adding 1% to the HST to secure funding outside of municipal property taxes.

Raising the HST by 1%, and transferring the new revenue to municipalities, is the best way to plug an annual $4.9-billion hole in infrastructure needs, she said.

AMO has said raising the provincial sales tax by 1% would generate an additional $2.5 billion in revenue, money that should be specifically earmarked for infrastructure projects and distributed among Ontario municipalities.

The 13% HST rate in Ontario consists of a 5% federal portion and 8% provincial portion.

 

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