13 Dec, 2016

IMFG Author Richard White quoted at CURLD

Dr. Frank Clayton at the Centre for Urban Research and Land Development at Ryerson University recently quoted historian Richard White’s IMFG paper Financing the Golden Age: Municipal Finance in Toronto, 1950 to 1975 in an article called Time for Toronto councillors to stop being skittish about raising property taxes.

According to Dr. Clayton:

This lack of willingness to increase property taxes to finance pressing operating and capital servicing needs is in direct contrast with council actions 40-60 years ago. Between 1955 and 1975 Toronto’s property tax collections in inflation-adjusted (real) dollars climbed by slightly under 5% per year, according to historian Richard White in a new study. He observed “. . . there is [was] no sign of significant public resistance to rising property tax” during this time.

Why were Toronto councillors accepting of sharp rises in property tax rates historically but not now? Richard White mentions four possible factors: property taxes were well thought out and equitably applied, real incomes were rising, the benefits from the higher taxes were hard to miss – plenty of new infrastructure, and regional equity. The primary difference I see between then and now is that real incomes are not growing much now. Having said this, the effective residential property tax rate (taxes as a percent of market value) is lower now than then.