The Kent Federation of Agriculture (KFA) is taking issue with a possible tax hike for farmers after a Chatham-Kent Councillor's proposal to review the current farm tax ratio.
Councillor Lauren Anderson made a successful motion at the last Chatham-Kent council meeting to have administration consult with stakeholders about increasing the local farm tax ratio from the current 22 per cent (of the municipality's residential property tax rate) to 23 per cent. The potential tax swing would mean slightly lower taxes for residential, commercial, and industrial properties and marginally higher taxes for farmers.
However, the KFA wants Council to wait for updated farm assessments from the Municipal Property Assessment Corporation (MPAC) in order to ensure farmers only pay their fair share of taxes.
"Council has made the decision in the past to defer this until MPAC has brought new data forward. It is the Kent Federations opinion that council needs to make this decision again. To make a decision on changing the farm tax ratio without using current MPAC data would mean that council intends to make decisions with a blind fold on. This decision should be made when all current information can be analyzed and ensure that all rate payers are sharing the burden equally. By raising the ratio without MPAC’s report, council could put undue burden on the agricultural community." said KFA President Brad Snobelen.
The KFA noted farmland taxes have more than doubled since 2012 because MPAC assessments for farmland values have risen at a much higher rate than residential, commercial or industrial properties in Chatham-Kent and as a result, farmers have gone from paying 5.7 per cent of the property tax levy in 2012 to 11.6 per cent of the levy in 2021.
"In 2012, council made the decision to lower the farm tax ratio in response to surging MPAC valuations. Despite lowering the farm tax ratio from 0.25 to 0.22 in 2012, the tax burden on farmers has risen every single year -- that is how significant these MPAC assessments have been," Snobelen said. "Staff has assumed in the past that residential values will outpace farmland values in the next reassessment as a justification for increasing farm tax ratios. However, there is no MPAC reassessment data to support this. Without updated assessment values from MPAC it is simply not possible for council to make an informed decision about tax ratio policies."
Councillor Anderson told Council at its meeting on April 3, 2023 that farmers have had it good over the past few years, while commercial and industrial have struggled and said it's time to increase the farm tax ratio to offset the commercial and industrial tax burden.
A report from administration is set to return to Council for further discussion on Monday after consultation with affected stakeholders.
Director of Financial Services Matt Torrance said most neighbouring municipalities (80%) have a 25 per cent farm tax ratio, adding MPAC won't have current assessment data until January 2024 at the earliest and local tax bills must go out in June.
Torrance said the municipality is working with 2016 MPAC data because the pandemic has delayed it.
