City has it wrong on Lansdowne tax revenues says expert
One of Canada's leading experts on municipal taxation says there is no valid basis for the City of Ottawa's claims that the Lansdowne Partnership Plan will be revenue-neutral due to new tax revenues.
In an affidavit submitted for the Lansdowne Legal Challenge, Professor Harry Kitchen writes: “the City's proposal on incremental taxation, surplus revenue and dedicated tax revenue is not supported by any principle of sound municipal finance.”
The City has maintained that taxpayers are not funding the $162.6 million debenture for Lansdowne because new property and commercial tax revenues--so-called incremental taxes--will cover the city's debt.
However, according to Professor Kitchen, this is not true. First of all, the City does not plan to really divert Lansdowne taxes to a special debt repayment fund. Secondly, these taxes are not incremental--they are needed to fund municipal services. Kitchen writes: “It is very clear that taxes from the Lansdowne Partnership Plan will not be surplus to Ottawa's needs.”
Michael Tiger, a member of Friends of Lansdowne says “The City has a lot of nerve raising my taxes year after year and then suggesting that new taxes from a shopping complex at Lansdowne could be treated differently from everyone else's. Mayor O'Brien's tax scheme is smoke and mirrors”.
The affidavit and a backgrounder are posted as press releases in the media section of www.letsgetitright.ca.
Backgrounder: Harry Kitchen Affidavit: Friends of Lansdowne, Ward and Sealey v. The City of Ottawa