Michael Lewis flipped through the file, shuffling through old property tax notices.
A second-term councillor in the district of West Vancouver, Mr. Lewis had recently led the debate at city hall on holding next year’s spending – and the municipal share of property taxes – to a zero increase. The councillors whittled down the budget by separating, as Mr. Lewis said it, the must-haves from the nice-to-haves.
Mr. Lewis was looking through his file at home to find out how much he had paid through property taxes in 2000 to TransLink, the regional agency in Greater Vancouver responsible for transit and roads.
He was aware that the agency had been spending hundreds of millions of dollars in recent years on ambitious expansion plans. He had not paid much attention to the impact on his property taxes. He thought the cost likely amounted to no more than an insignificant surcharge on the bill.
But when he found the 2000 property tax notice for his home, Mr. Lewis was aghast. The 2011 TransLink levy on his property had increased to $420 from $90.61 in 2000 – more than fourfold. Over the same period, his bill for city hall services rose at a much slower pace, to $2,494 from $1,587.
“It does not seem reasonable,” he said, comparing TransLink’s percentage increase to the hike in municipal budgets.
Mr. Lewis is not alone, and West Vancouver is not unusual. A Globe and Mail investigation of property tax rates across Greater Vancouver found that TransLink has increased the amount of property tax it charges at a significantly faster pace than municipalities across the region.
TransLink collected $90-million from property taxes in 2000. By 2011, its revenue from this source had more than tripled, to $298-million. By comparison, revenue that Vancouver and West Vancouver, for instance, were taking from property taxes increased by around 60 per cent over the period.
The provincial government created TransLink in 1999 to be responsible for transit and major roads in Greater Vancouver. It was given authority to raise funds through a variety of tax measures, but the province had to give its approval before the taxes were imposed. It is run by a government-appointed board. Mayors from the region’s 21 municipalities and the Tsawwassen First Nation sit on a council that decides how the agency’s programs are financed. However, the politicians have minimal say over what projects are undertaken or how the agency operates.
TransLink is about to boost property taxes once again to pay for rapid bus projects south of the Fraser River. The agency wanted to raise the funds from a vehicle levy or regional gas tax. But Premier Christy Clark earlier this month shot down their proposals, requiring TransLink to turn to property taxes.
In an interview this week, Vancouver Councillor Raymond Louie, chair of the city’s finance committee, echoed the sentiments of several municipal politicians who are concerned about TransLink’s hikes in property taxes and the undemocratic process of taxation without accountability to taxpayers.
“[The city of Vancouver]works very hard to keep our finances under control,” Mr. Louie said. “We have found many efficiencies and adjustments of services in order to keep our taxes as low as possible.” But then, he added, the city sees what TransLink does.
The entire structure of the agency should be rebuilt, he said. “It is essentially taxation without representation, because the elected [people]have no power to influence how the money is spent,” Mr. Louie said.
Former Vancouver councillor George Puil was TransLink’s first chairman, serving from 1999 to 2001. Shortly after it launched, TransLink sought provincial approval for a vehicle levy to pay for transit and roads. Property tax should not be used to fund transportation, Mr. Puil said. “I always felt it should be user pay, and property tax is not a user-pay tax,” he said.
But the provincial government refused, offering instead a hike in gas taxes if TransLink matched the new revenue with an increase in fares and property taxes.
Many of TransLink’s financial problems would have disappeared if the province had approved the vehicle levy in 2001, Mr. Puil said. “At the time, if we had done a $75-per-vehicle levy, it would have brought in $160-million a year, which would have solved the problem.”
Gordon Price, program director of the city program at Simon Fraser University, said TransLink has repeatedly been pushed into property tax hikes after the province shot down proposals to raise money from other sources. “This has been the pattern,” he said. “The province says yes, you can have the ability to propose a funding mechanism. Then every time they go to the province to get authorization, almost within hours, the province says no.”
To make matters worse, TransLink does not have the option of cancelling projects if its plans for funding are turned down. The larger projects, such as an extension of SkyTrain, come with federal and provincial commitments to share costs.
“Senior governments come back to the table with hundreds of millions of dollars and you really cannot say no,” he said. So TransLink falls back on property taxes to raise the revenue, and has to bear the anger of property owners.
“TransLink is the perfect whipping boy,” Mr. Price added. “They never defend themselves. They are beholden to the province.”
Although TransLink’s portion of the tax rate is the same across the region, West Vancouver, with many of the highest property assessments in the region, feels the pinch more than others when TransLink increases property taxes. Many residents are seniors who have lived in their homes for years and are property rich but cash poor.
West Vancouver Mayor Michael Smith said the municipality pays a disproportionate share of the tax increases. Also, TransLink is taking away tax revenue that is one of the few sources for funding police, fire and other municipal services.
“We oppose TransLink having access to our property tax base,” Mr. Smith said. “TransLink should stay out of property taxes.”