Feature Article July31, 2003
LAND O' LAKES NewsWeb HomeWho's to Blame for High Property Tax Increase?A lot of property owners, mainly but not exclusively those who own waterfront properties, received a nasty surprise with their tax bills this year. Taxes were up - way up; in some cases there were increases of as much as 50%. When they called their township office to complain, they were told it was all due to Municipal Property Assessment increases that had come through last fall.
Anyone who contacted the assessment people, the helpful folks at MPAC (the Municipal Property Assessment Corporation) were told that, while MPAC does the assessment, the townships actually set the rates. MPAC is only a neutral provider of information, they dont actually collect taxes.
When the local townships brought in their budgets this year, they were aware of the increased tax assessments in their jurisdictions. They knew they had more assessment to work with, and that this increase had come about through assessment increases and not new construction. In North Frontenac, for example, the total assessment increase was about $40 million more than the dollar value of construction within the township last year.
When councillors put together township budgets this year, the increased assessment enabled them to cover the needs of the townships. The effects of downloading and inflation in the past few years have been such that the townships did not bring in large decreases to their tax rates to make tax assessment value neutral. They needed the extra money, and they took it.
Because the increased revenue has come about through assessment increases and not rate increases, it was not spread out over the property owners evenly. Some saw little change; some, decreases; and some saw large increases.
It is this huge discrepancy that has people up in arms. Some properties have seen increased assessments that dont relate to the actual value of their properties. MPACs assessments are based on computer-generated data, and they are reluctant to admit how inexact the science of assessing property values is.
The actual criteria MPAC uses is not available to individuals, and that is perhaps because the PR representatives that MPAC hires to deal with complaints are not data collection experts themselves. They dont have a full grasp of what procedures MPAC uses to assess 47 million properties, using billions of disparate pieces of data. In fact, no one seems to really know how property values are actually determined by MPAC.
Property value-based taxation does not relate to income. It is not connected to the property owners ability to pay. For that reason, some procedures should be in place to make sure these surprise increases arent put into effect immediately. At the very least there should be a 10% per cent limit on any year-by-year tax increase due to property assessment. And there should be an effective appeal process. It might help if MPAC admitted they make mistakes. They make them often, and those mistakes cost people dearly.
