Most city taxpayers don’t realize they are paying $2.1 million in what amounts to hidden taxes on their utility bills.
The City of Moose Jaw budget for this year estimates that amount will be collected from the water utility, solid waste utility and the new waste water utility.
The waste water tax will rake in $516,000.
These near-secret taxes come from franchise fees charged to taxpayer bills four times a year.
The first two per cent franchise fee in the 1990s on the water utility was expected to collect about $150,000
The city has collected millions over the years.
In private industry, franchise fees are common, charged by companies as royalties to a franchise owner for the right to use the business unit, name and process.
Moose Jaw owns the water utility, so why charge a franchise fee to the taxpayers? Tax grab is why.
This is one way of hiding the amount of cash sucked out of taxpayers’ thin wallets.
Not only do these franchise fees hide the actual tax bill, according to the principle of public finances, placing a tax on a tax is no-no. It just doesn’t make sense.
If the franchise fee revenues became property taxes instead of being squirrelled away, property taxes would be 5.4 per cent higher.
Utility bills would fall by two per cent.
The arguments can and should be made to have this amount on the property tax bill so taxpayers have a better idea of how much money the city is taking from them.
For various reasons from inflation to past councils’ lack of reserves creation, the city needs the funds it collects.
This year’s tax increases include 3.66 per cent on property, 2.46 per cent on waste water utility, 1.51 per cent for policing, four per cent on water and keeping a $100 infrastructure levy
That amount adds $167 a year for the average household plus the levy, which was to end.
The average household is finding the city tax/utility fee burden amounts to a second mortgage payment for many owners struggling with inflated costs and fixed incomes.
The municipal organizations representing us seem to have given up on the idea of lobbying senior governments for more funding.
An alternate solution to the over-taxing could be the establishment of a municipal lottery to raise funds.
In the 1960s a lottery proposal by then Mayor Scoop Lewry was shot down by the courts as the Criminal Code listed lotteries as illegal. Times, the law and public attitudes have changed.
Ron Walter can be reached at [email protected]
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
