Where is the fairness and equity in capping taxes?

Residential property owners have recently received their 2008 Notice of Assessments. The notice spells out the market value of the property as of Jan. 1, 2006, and, if eligible, the capped market value.
Across the province, residential market values increased by 11.2 per cent. This reflects the relative healthy state of the housing market in most communities.
2008 is the first year where capping increases have been limited to the Consumer Price Index (this year, 2.3 per cent). The change from the previous capping at 10 per cent has brought 278,000 properties under the program from the previous 37,000.
This might sound like a good news story, but I beg to differ. CPI has no bearing on municipal budgets and costs. Our community needs for increased policing, road work, sidewalks, recreation and solid waste management are not related to the CPI measurement. We may need more than CPI budget increases to meet the demands for services.
Why should the province interfere with the property tax, the one major revenue stream of municipalities? Just imagine the howling if the federal government limited provincial income tax to a CPI increase.
The Union of Nova Scotia Municipalities (UNSM) opposes the cap of assessments at CPI. If the province is attempting to help property owners who are challenged to pay their property taxes, there should be an income test with the capping. Otherwise, the most valued and rapidly increasing properties are capped and properties which did not increase by CPI will pay more as a result of an increased tax rate. The municipal budget must be raised. Capping merely shifts the tax burden from some property owners to others.
This concept of shifting the tax burden was confirmed in a study on capping undertaken by the accounting firm, Deloitte, in March 2007, and concluded by an internal study from Service Nova Scotia and Municipal Relations in late winter of last year.
We also oppose capping because it will create a variance in tax bills. A new home buyer will pay tax at the market value while neighbours will be eligible for capping. Five years from now, when someone buys a property in a "hot" market which has been capped, their tax bill will be calculated on the market value. How does this result in fairness and equity?
Deputy Mayor Robert A. Wrye
Town of Wolfville
President
The Union of Nova Scotia Municipalities