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TAX NEWS - June 2010

Ontario Tax: Greater Sudbury City explains taxes

To help Greater Sudbury residents understand their taxes, the city has sent out a flyer to homeowners explaining taxation rates and how the money is used
Repairs to city roads, police services, public transit and fire services are but four of the many services paid for by the city residents through the annual payment of city taxes.

The city has recently sent out a pamphlet to city homes, providing a break down of city taxes as well as how different parts of the city are taxed.

"All properties are subject to a general tax rate for most services, and then area-specific tax rates are applied for fire services and for transportation services," Ed Stankiewicz, Manager of Financial Planning and Policy for the city of Greater Sudbury, said.

When the city and outlying municipalities amalgamated in 2001, the city of Greater Sudbury became responsible for taxing outlying areas like Walden, Rayside Balfour, the Valley, as well as several unorganized townships like Wanup.

The city core, the former city of Sudbury, receives the most coverage and pays the most taxes. The average home owner pays about $2,695 a year, or about $225 a month.

Valley East is taxed under a "composite commuter" tax rate, which means the Valley has full-time and volunteer fire fighters, but has reduced transit options compared to the city core itself. The average homeowner pays about $2,545 a year, or about $212 a month in taxes.

The former municipalities of Nickel Centre, Walden, Rayside Balfour, Onaping Falls and Capreol are taxed the volunteer commuter rate, which factors in the decreased bus service as well as reliance on volunteer fire services. For residents in these former municipalities, taxes will come in at about $2,462 a year, or $205 a month.

Finally, the unorganized townships, which extend from the old city's east border and cover nine former townships, have no public transit and volunteer fire services only. Because of this decreased services, they pay the least taxes, for a total of about $2,386, or just under $200 a month.

These numbers were provided by Tony Derro, manager of taxation for the city. He said the averages were calculated based on the average value of a home in Greater Sudbury, which is $153,000. Homes with higher value would have higher taxes than the examples above, and homes with lower value would have lower taxes.

For every $1,000 collected in taxes by the city, the city spends:

- $234 on road maintenance and construction
- $178 on police services
- $138 on health and social services
- $124 on recreation services, libraries, and museums
- $92 in fire services
- $64 in administrative services and building maintenance
- $48 in garbage, recycling, and landfill
- $42 in public transit
- $41 in economic development and planning
- $39 in emergency medical services

Derro said the numbers aren't the actual amount of money spent on the service. Some of the above services may receive funding from the province or generate revenue through the collection of user fees.

For example, city taxes cover about half of the cost of city transit, while the other half is made through fares. But services like road repair and maintenance has a higher cost as it doesn't generate revenue.

The city's annual budget is broken into two types, operating and capital budgets.

The operating budget covers ongoing costs, such as payroll, general maintenance, and asphalt patching. The city's operating budget comes in as about $518 million.

The capital budget is reserved for one-time projects, or long-term investments. Many of the projects covered by the capital budget are done with help from the province. The construction on Lasalle Boulevard, Paris Street and Notre Dame Avenue, and Falconbridge Highway are examples of capital budget spending.

All residents in the city pay taxes, even if they do not do so directly. People who rent apartments or houses in the city may not pay rent themselves, but the property owner pays taxes to the city. Those taxes are collected by the property owner from rent payments.

There are many ways to pay taxes to the city, from walking in to Tom Davies Square or a citizen service centre, arranging to pay taxes through a mortgage broker, post-dated cheques, e-banking, at banks, or a pre-authorized payment plan.

Those who do not pay their taxes have four years under the municipal act before the city will take action. During these four years, the city will try to communicate with the property owner to make arrangements to collect the past taxes.

But once the four years have passed, the city has the option of registering a lien against the property, which means it cannot be refinanced or sold until the past taxes are paid. Once a lien is on the property, the city will also stop accepting partial payments.

After a year, the city has the option of selling the property to recover the back taxes.
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