Can you compare taxes between Frontenac municipalities? Maybe.

Written by  Wednesday, 17 January 2018 11:13
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I have often wondered why the tax rates in the Frontenac townships vary so much, and why it is that residents living in my own township, Central Frontenac, pay a much higher tax rate than anyone else.

It should be easy to compare tax rates in neighbouring townships in the same county, because they all have the same mix of responsibilities. Frontenac County has no roads department, the local townships pay for all road maintenance costs (except for Hwy 7) themselves. In Lanark and Lennox and Addington Counties for example, there have county roads, making county taxes higher and municipal taxes lower than in Frontenac.

But when we look at the tax rates in Frontenac, it is rather alarming, certainly for a resident of Central Frontenac. The rates are not similar at all. The rate in South Frontenac (using 2017 figures) is $597 per $100,000 in property assessment, in North Frontenac it is $675, and in Central Frontenac it is $841.

What that means, in the most extreme cases, is much higher tax for less service in Central Frontenac as opposed to South Frontenac.

Identical houses located on either side of Boundary Road (where the Frontenac Arena is located), which divides South and Central Frontenac would pay radically different amounts of tax, and the lower taxed house on the south side of the road would have curbside garbage pickup while the higher taxed house in Central Frontenac would not. If the houses were both assessed at $200,000, the difference in taxes would be $488 per year. A pretty raw deal for the poor sod who lives on the north side of the road.

But it it not reasonable to condemn Central Frontenac Council or laud South Frontenac Council based on this one case. There are other factors involved.

The assessed value of a house and property are based on the size and features of a house, and also its location. If you took a house on from Mountain Grove and plopped it down on an identical lot on Rutlege Road it would gain value because of its location within a short drive from Kingston. And of course waterfront, anywhere in Frontenac, is assessed at a much higher value.

This raises a fundamental issue when looking at municipal finances. The number of households in a township is the major factor in determining the cost of services. It is literally the case when it comes to OPP costs, which are charged to the townships on the basis of the number of households, and it is also the case for road, fire, waste disposal and virtually all municipal costs. But numbers of households is not the basis for taxation, property assessment is. Houses are taxed based on their resale value, not on the cost to provide services to the people living in them.

 

There are over 10,000 homes in South Frontenac, about 4,000 in Central and about 3,500 in North Frontenac.

When you look at the total amount of taxes collected in the three townships as a factor of the number of households, they are pretty comparable. The “amount to be raised by taxation” for 2017 in South Frontenac was $18.5 million, in Central Frontenac it was $7.3 million and in North Frontenac it was $5.6 million.

In percentage terms, Central Frontenac has about 39% of the population that South Frontenac has and collects about 39% of the number of tax dollars as well. North Frontenac, with 35% of the population of South Frontenac, but collects only about 30% of the amount of tax dollars.

The reason it costs more per $100,000 in assessment for ratepayers in Central and North Frontenac, is entirely due to lower average property values.

Again, looking at Frontenac County, in 2017 the average home in South Frontenac was assessed at $307,000, the average home in North Frontenac was assessed at $250,000 and the average assessment in Central Frontenac was $217,500.

In fact, when put through a simple formula based on relative property values, the $814 that Central Frontenac ratepayers pay per $100,000 in assessment, equates to $588 in South Frontenac, $9 less than what South Frontenac ratepayers pay. The $675 per $100,000 that North Frontenac ratepayers pay equates to about $550, $47 less than South Frontenac.

Does this mean the smaller townships are actually more efficient than the larger one?

Not necessarily, as there are many other factors at play. For example, North Frontenac has more seasonal residents than the other townships, who only need service 6 or 3 months out of the year. As well, the amount of paved and/or unpaved roads in each township are a function of geography and not the number of households.

North and Central Frontenac both maintain multiple community halls, and most halls in South Frontenac are owned and maintained by community groups, but South Frontenac has a museum, and garbage pickup.

An analysis of the number of households, taxes collected, and average tax assessment, based only on rudimentary mathematics, leads me to conclude that the three townships are pretty similar in the way they finance their operations.

If there are significant differences, they relate to levels of service, not the amount of taxes collected.

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