Revenue Services

The Cariboo Regional District provides its services using three main sources of revenue: taxation based on property assessment, user fees, and provincial grants.

Facts about Funding

The Cariboo Regional District has always balanced its budget. Under the Local Government Act, the regional district is not permitted to have an annual deficit.

The administration of the Regional District does not operate like the Federal or Provincial Governments, where there is a general revenue to redistribute to others. The annual budgets for each service and function have firewalls between them. By legislation, no money may be transferred from one function budget to another.

Assessment

The BC Assessment Authority is mandated to oversee all property assessment in the province. The Cariboo Regional District determines a budget required to operate each service. Based on the assessment information, the regional district establishes an annual tax requisition to collect required taxation. For a collection fee of 5.25%, the Province collects the property taxes and remits a portion to the CRD.

Assessment vs. Parcel Tax

How do local governments determine each person's share of the tax burden? This question is loaded with emotion because all tax systems are designed to make the tax system fair to all, but they usually fail in this endeavour. Two important fairness issues are inherent in making this decision:

  1. Should we have the end-user of a public service pay for the service? The argument against all services being user-pay occurs where a good is too difficult to quantify or where it benefits everyone (e.g. a lighthouse or the national military). Examples of items where the end-user pays are user fees, charges for goods, license fees, etc.;
  2. OR
  3. Should we use the tax system to redistribute money from the more wealthy to those who are not as wealthy by taxing some people more for services? An example of this concept is a progressive income tax scheme where the more income you earn, the more tax you pay.

In the local government context, we must work within senior governments' restrictions and legislation. It is important to note that the Cariboo Regional District's taxation is based on collecting tax dollars for a specific purpose with no general revenue fund to redistribute wealth. We are authorized to use the following four taxation regimes:

  1. User fees for goods or services.
  2. Parcel taxes.
  3. Taxes based on the assessed value of land and improvements.
  4. A combination of item 1 and 2, or all of the above.

So to determine which method of taxation the CRD should use, the Board needs to take into consideration whether the political body wants to use direct methods, wealth redistribution methods, or a combination of these tax methods.

A fire protection service can be used as an example. Should we use a parcel tax, assessment tax or a user fee per fire? We must also look at the amount of assessment in each category (residential, industrial, utilities, etc.) to see if a parcel tax would excessively benefit one group of taxpayers (e.g. industrial) over another.

In the final analysis, some regional district's taxpayers have said, "move the tax system towards the user-pay method" where applicable. In the case of fire service, a user fee per fire is not applicable, but a blend of parcel tax and assessment-based charges may be. The CRD is investigating the consequences of rearranging our existing tax methods with some services.


Page last modified: October 29, 2014 13:52:39 PDT