Tag Archives: #Douhford

Mr. Ford: It’s time to rewrite the University property tax deal

By Gerry Barker

November 1, 2018

Exclusive – Opinion

Before I am accused of insufferable whining, here are some examples of jug-headed decisions made by the current council in the past four years.

My favourite is about the tax on cats. Council taxes dogs, chicken coops, property,  waste removal, water, storm water, developers, businesses and cats.

If it moves, tax it

Council does not tax nuisances such as the growing urban flock of Canada Geese, Bicycle riders and their gear. Throw in the user fees that in 2017 the city received $105,872,000 in user fees alone. That was an increase of $9,744 million over 2016.

The biggest under taxed institution in the city is the University of Guelph. The city’s largest landowner and concentrated education complex is complete with buildings to house first year and graduate students, ultra new classroom facilities, football stadium and hockey arena.

It has a student population of 22,000 from September to April.

Now here’s the sweetheart property deal enjoyed by the University.

City residents and taxpayers subsidize the University population through paying for emergency services –police, fire and EMS as requested by University officials. No charge.

Citizens also subsidize Guelph Transit, spending $65,259 million that includes supplying extra services to accommodate students during the roughly eight months stay in Guelph. Citizens have subsidized an estimated $15 million annually to support Guelph Transit.

What happened to equal partnership?

More recently was the University’s Homecoming weekend that city taxpayers paid to control the excessive drinking, abuse of property and treatment at medical clinics. The Guelph Police Services had to pay for extra officers to keep the peace and the cost to city taxpayers’’ was a reported $63,000.

Remember, your taxes are paying for police and other public services for homecoming and St.Patrick’s Day celebrations by thousands of students, alumni and non-students looking for a party.

It is obvious that the University Police cannot control what is happening in their precinct and requested assistance from Guelph Police Services. Why not? Doesn’t cost the University anything and it takes their cops off the hook.

Now you might say this is a penny-ante complaint but when coupled with St. Patrick’s Day revelry, Guelph police are again beefed up to maintain order. It seems a high price to pay by Guelph citizens who are not involved.

Here’s some background

Celebrating the annual homecoming weekend is a string of five universities ranging from Hamilton to London, all celebrating on different weekends. The top brass at each institution agreed to hold their homecoming on different weekends starting usually at McMaster in Hamilton, Guelph, Laurier in Kitchener, University of Waterloo and University of Western Ontario in London.

The result is a moving weekend party as students bounce from one homecoming to the next. An example was this year when Guelph had its homecoming party and football game, two weeks later Western held its homecoming and the police could barely handle the celebrants in which the affair degenerated in a near riot. There is ample evidence that same drinking and flouting the law occurred at each institution.

It would appear that students and non-students move each weekend to another University homecoming. Why is this occurring? It’s because it means money to the Institutions.

Organized alumni tours encourage donation to the University’s endowment fund or they finance support of new building or courses.

. Since 1987, the $75 payment, in lieu of property taxes, has not changed or indexed to the Cost of Living Index (CPI).

How about your property taxes?

Are you paying property taxes during that time that never increased annually? Of course not. In our case; the annual increase for 15 years has averaged 3.18 per cent. Two things affect your property taxes, inflation and compounding. All I can say is that our property taxes have more than doubled in 15 years. That’s compounding for you.

Property taxes contribute, on average, 80 per cent of city revenues. The rest comes from grants, the gas tax rebate, investment interest and user fees including development charges and impost fees.

It’s easy to see that the University is paying an estimated $1.8 million annually in lieu of property taxes and the city taxpayers must cover 80 per cent of the annual city budget. The total revenue from property taxes for 2017 (the latest financial report) was $233,024 million. That figure includes the $1.8 million received from the University of Guelph’s holdings.

The UofG property tax bill represents 0.00772 per cent of the total paid by citizens. The largest landowner and major post secondary organization’s property tax bill is just not paying its fair share operating in Guelph. Not only that, each year the University’s tax portion of Guelph’s cost of operating actually shrinks.

Translation: They are paying proportionately less than all the city property owners conytribute 3.18 per cent annual increase in property taxes.

A law that’s unfair and stupid

The 2017 operational taxed increase of $8,936 million over 2016. That increase did not include any contribution from the University. So each year the City of Guelph property taxes increase, on average 3.18 per cent, but the University has not increased its property tax payment for 41 years.

That’s thanks to a dated and stupid provincial law that never considered the effect of inflation, passed by the provincial Liberal government in 1987. The deal chiefly protected the province’s growing post secondary schools from paying appropriate property taxes.

By sheer accident, the University of Guelph, over the years, became a huge beneficiary because it owns thousands of acres inherited from the former Agriculture College, before it was granted University status.

Over the years as the city grew, certain parts of those lands, particularly along Stone Road, became cash cows as the University property was leased back to commercial retailers and housing developers. At the same time, the city had to install infrastructure including roads, water and sewer lines plus a fire station. Oh! I forgot the $2 million spent on bike lanes.

This land lease income became a great opportunity to expand the University with new buildings, facilities courses and faculties. However, it brought unintended costs to the city to service the needs of the expanding university. The property tax deal denied the city’s right to collect higher property taxes. Because there was no assessment established of the University properties by the Municipal Property Assessment Corporation. There was no need the city was prevented due to the fixed rate payment in lieu of property taxes established by the provincial government.

The effect of this property tax loophole was that municipalities were forced to increase its costs to improve infrastructure, emergency services, transit, plus many other services over the years as the city and student population grew.

The University or Conestoga Community College cannot be blamed for this situation. The blame falls directly on successive provincial governments that ignored the consequences for more than 41 years, of this off-loading of the costs that many growing cities are facing in relation to blooming post secondary institutions.

The exponential financial property tax load has fallen on taxpayers and citizens.

Well, the UofG recently released a report showing the economic benefits the institution brings to Guelph and Wellington County. Most of that benefit is focused on businesses through increased sales and services but does not trickle down to the taxpayer who is paying most of the bills. It’s another version of trickle down economics that doesn’t work.

It has been suggested that any increase in the so-called student “bed tax” will only be passed through to the students and families.

Here’s the Bottom Line:

The estimate value of the Univisity of Guelph today, in terms of assessment including buildings and land, internal infrastructure, residential structures, laboratories, sports facilities and a number of other important assets of the corporate complex are estimated to be more that $5 billion.

The University’sconomic statement said itemploys 12,000, not all located in Guelph. This, it claimed, is major contributor to job creation. Again they don’t all live in the city.

The City of Guelph with a population of 131,000, in the 2017 consolidated financial statement shows the city having total assets of $1,186,081,000.

This is a challenge that needs the municipalities affected by this unfair arrangement to call on the government to change it.

 

 

2 Comments

Filed under Between the Lines