Langford makes a corrective leap with its 15.6% tax hike

On Mar. 4, Langford City Council unanimously approved a 15.6% increase in property taxes for 2024. Signs were coming for the change after Coun. Keith Yacucha and others raised serious concerns recently, about the ways the council had become overly dependent on its amenities fund to offset its reluctance to raise property taxes.

Mayor Scott Goodmanson told The Westshore, “Those who don't like big tax hikes, recognize that we're trying to wean ourselves off of what is most likely an unsustainable, continued use of the amenities fund. Simply because of the new housing regulations coming up, we are being limited in what we can charge for amenity funds and how they can be used with pre-zoning being expected, we lose a lot of that leverage.”

Yacucha agreed with the imminent loss of that resource. “It is not sustainable to continue this practice,” he said. “Making this a long-running practice brings in financial risks.” 

In a letter to council, Langford resident Penny Henzig agreed. “It does not make sense to delay this any longer. It will be great to see the General Amenity Reserve Fund being used for its intended purpose… general amenities.”

“Honestly, it's [offsetting taxes] is not a very common use of amenities funds. It's not standard by any means,” said Goodmanson.

“Property tax is essentially a wealth tax,” said Yacucha. “A 1% reduction in a wealth tax results in a higher subsidy to those with more wealth than those with less. The example I use is that a 1% reduction in tax on $1 million is $10,000 while a 1% tax on $500,000 is $5,000—similarly those with higher property values benefit the most from the use of amenity fees to subsidize taxes, an inequitable approach to taxation,” he said.

Others have argued that the tax hike will mostly hurt residents who are struggling to make ends meet and who will find the increase a real shock to household cash flow. Resident Debora Morwald writes, “The cost of the majority of products has doubled. Taking unnecessary funds from residents at this time is not in Langford’s best interests, as it will have a negative effect on the local economy.”

The argument she is making is that people barely able to pay bills won’t spend their money in town, but many people in BC aren’t even paying their bills.

In fact, evidence that people are struggling financially can be found in Equifax Canada’s latest Market Pulse Consumer Credit Trends and Insights report. According to its consumer round up, people in Ontario and British Columbia—the two most expensive housing jurisdictions in the country—increasingly missed payments on mortgages and credit cards in the fourth quarter of 2023. In an interview with the Canadian Press, Equifax vice-president of advanced analytics Rebecca Oakes said, "We're seeing that strain start to increase, and really starting to see missed payments coming out more and more on the credit side for individuals."  

In 2023, the payment delinquency rate rose by 62.2% in BC where the average debt for Q4 was $21,796. And while it is true that higher interest rates and inflation continue to weigh on consumers, municipalities are also feeling the pinch. Yacucha’s criticism is that the pinch is real but has to be alleviated in a realistic way.

In its draft financial plan, Sidney city council states “Local governments are under increasing pressure to respond to service needs in areas that have not traditionally been local responsibilities. Factors such as affordable housing, homelessness, climate change, increasing accessibility, and medical first response have added to already demanding pressures to address the more traditional municipal needs, like infrastructure replacement and the expansion of recreational opportunities.”

In the township of Sidney, its final financial plan was introduced to the public on Feb. 5. An earlier draft financial plan proposed a general tax increase of 8.42% but “after responding to pressure” council landed on 6.04% in its final version.

While there is acknowledgment of these same municipal pressures by Langford residents, the course correction feels too fast to some. In his own letter to council, resident Scott Costello addressed the quick turn-around. “I suggest to you that Langford put the increases over multiple years and STOP development till the infrastructure is caught up,” he said.

With the drastic rate increase, property tax revenues in Langford will leap from $45M in 2023 to $52M in 2024 and reach $77M by 2028 with a proposed tax rate that drops to 4.89% that year. Its neighbour Colwood’s tax rate will remain at a far lower rate of 4.9% for 2024. 

“Council took a big step forward,” said Goodmanson. “Other mayors have said, good job.”

Langford council will consider first, second, and third readings of the Financial Plan Bylaw and 2024 Tax Rates Bylaw at the April 16, 2024, regular council meeting.