Imagine for a moment, the provincial government announces it is going to change the way it levies income taxes. Instead of setting marginal tax rates, the government will wait until the end of the year--after corporate and personal income has been declared-- and then arbitrarily set tax rates based upon what it needs to pay for its budget wish list. Would taxpayers stand for this Not likely. But this is exactly what happens at the municipal level for property owners every year.

Municipal governments get assessments of all the property in their area and then decide what the tax rates will be so they can pay for their budget wish lists. Fair No. And certainly unpredictable for property taxpayers. But even more egregious is that property values or 'assessments' are completely removed from a property owners ability to pay or their consumption of services.

Between 2001 and 2004 municipal revenues in British Columbia have increased 44 per cent! The largest drivers of the increase: property taxation revenues, transfers from other levels of government and the latest squeeze, developer contributions (monies collected from commercial and residential property developers).

Total inflation and population growth over the past five years has been low at 8 per cent and average weekly earnings have inched up just over 7 per cent in the same time period. Municipal coffers are ballooning, while at the same time property owners-- not realizing any net gains in income--are being hit with higher and higher property tax bills.

Consider this: have you ever heard anyone hoping their investments stop increasing in value How many times have homeowners crossed their fingers hoping the value of their house--their asset and investment--"hold" steady This is precisely the consequence of a property tax system that leaves complete and absolute control over tax rates to local council on an annual basis.

After conducting an exhaustive review of average residential property assessments and tax rates for 60 of the 154 municipalities in British Columbia, the Canadian Taxpayers Federation (CTF) has found that total property tax bills are dramatically increasing in every region of the province in the range of 7 to 67 per cent in the last five years alone. The solution: the CTF proposes a cap on property tax bills, limiting annual increases to the rate of the consumer price index.

A property tax cap would provide homeowners the much needed certainty and predictability of annual tax bills. Furthermore, it would also provide municipalities with a stable revenue stream.

As other levels of government have improved financial reporting, transparency and accountability, municipalities have escaped the grasp of reform. It's time for local governments to improve their budgeting and tighten their fiscal belts.

The CTF is also proposing services often paid out of general revenues, such as garbage collection, be billed on a user pay basis. Municipalities should proactively seek out cost saving measures like privatization, public private partnerships and alternative service delivery for capital projects and services.

The Community Charter should be amended to require municipalities to conduct meaningful consultation with the public before adopting their annual financial plan. All too often, the current process has operated as a rubber stamp, not allowing the public time to consider proposed budgets. Ratepayers must also be assured that they are getting value for their tax dollars, by extending the purview of the Auditor General to municipal services.

The CTF has launched a petition for a property tax cap, available on our website at www.taxpayer.com. Also, property owners are urged to take a copy of the CTF report, "The Property Tax Bite," on our website, to their local council meeting when the upcoming budget is debated.

It's time to end the uncertainty and reign in the discretion of local governments and adopt a cap on property tax bills.