August 21st, 2019

Compounding taxes

By Letter to the Editor on January 17, 2019.

As the old saying goes, “A good accountant can take one set of numbers and give you three different answers.” Fast forward to the city’s latest budget plan which calls for a four-year budget cycle. I personally don’t think any government can accurately predict four years in advance. Period. So why change to a four-year budget cycle?

It appears to be a bit of a shell game. Taxpayers are told taxes will increase each of the following four years by four per cent. Let’s do the numbers. Multiply your last years tax dollar amount by .04. Then multiply the increased amount by .04. Do the same for the next two years. The increase is compounding. Wow! That amounts to more than a 20-per-cent increase in taxes over four years. Now divide the over 20-per-cent increase by four. That is an average increase of more than five per cent annually. That will be a tough-t-bear increase for many homeowners. Rent increases will follow on rental properties.

You have to give city staff and council credit trying to do their best in a difficult time of decreased revenue from energy sources. Having said that, it’s an easy way out to raise taxes. God only knows what the next four-year budget cycle will bring. Cuts to service, staff cuts, and wage freezes may be under the microscope. Taxpayers can only handle so much of the load.

John MacLaren

Medicine Hat

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