LRT Tax Hikes Could Be Trimmed With New Development Charge Cash

  • 08/24/16

New development charge rules could cut down on the taxpayers’ share of $161 million worth of regional transit spending planned in the next 10 years.

And that could help shave a proposed tax hike for light rail.

“It’s a significant tool and shouldn’t be underestimated, and it’s a positive step to help pay for rapid transit plans,” finance chair Sean Strickland said.

The Region of Waterloo plans tax increases in the cities for rapid transit that will see tax increases equivalent to about 12.9 per cent between 2011 and 2019 for bus expansion and light rail. Officials say other savings offset the cost.

It’s uncertain exactly what the tax impact of the new development charge rules could be. That won’t be known until officials get into the 2017 budget process.

“The DC bylaw, if it goes through as it’s currently crafted, has the potential to reduce the amount of money that we’re collecting by a significant amount,” Coun. Tom Galloway said.

The region is reviewing its development charge bylaw after changes to provincial rules were made at the end of 2015. Under the new rules, the region can now calculate the charges for future transit and use development charges for waste management — excluding landfills and incineration.

The charges are fees developers pay to help cover the costs of growth such as roads and sewers.

This region could be one of the first to make use of the new rules.

In a report earlier this month, regional staff estimated of $1.3 billion in costs for Grand River Transit, light rail and the King and Victoria transit hub, $161 million could come from development charges under the new rules.

Because the region is completing a background study to incorporate these changes into its development charge bylaw, the region is also taking a look at having townships share transit costs.

The two possibilities staff are floating would either see the same development charge rate for construction in townships and cities applied or, divvy it up in some way between the townships and the cities.

Township politicians have said in past they worry if they are brought in on the development charges piece it won’t be long before they have to help on the property tax side.

Also up for debate is whether to continue with downtown development charge exemptions. Currently, the region is backing city programs to exempt fees in core areas in Cambridge and Kitchener. Those programs expire in 2019.

It has been regional practice to only set up exemptions in city cores if the lower-tier municipality does so as well.

Politicians will discuss whether to continue that program, end it in 2019 for good or end it sooner.

A public meeting on the potential changes to the development charge bylaw is scheduled for Sept. 13 at 4 p.m. in council chambers at 150 Frederick St. in Kitchener.

Approval of the bylaw is expected in October.

Let’s just keep raising development charges so the cost of new housing continues to soar, thus inflating the entire real estate market and pricing people out of the market. As house prices go up, taxes still go up because you pay a percentage of your home’s value. Raising development charges is the equivalent of implementing a stealth tax. They can go around saying they aren’t raising taxes, yet everyone’s tax bill increases.

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